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Regis 3Q Profit Down On Consumer Spending Pullback

The Associated Press

MINNEAPOLIS (AP) — Hair salon operator Regis Corp. said Wednesday that its profit fell 53 percent in the fiscal third quarter on a consumer spending pullback and the deconsolidation of its European franchise salons.

But earnings from continuing operations exceeded analysts' expectations, which sent the company's stock up 49 cents, or 2.8 percent, to $17.98 in midday trading. The shares have traded in a range of $8.21 to $31.96 over the past year.

The owner of Supercuts, Sassoon and other hair salons posted net income of $8.9 million, or 21 cents per share, compared with $19 million, or 44 cents per share, in the prior year.

Income from continuing operations grew to $21 million, or 49 cents per share, from $19.1 million, or 44 cents per share.

Analysts expected profit of 40 per share, according to a Thomson Reuters survey. Analysts' estimates typically exclude one-time items.

For the period ended March 31, sales slipped 2 percent to $604.1 million from $618.9 million as both service and product revenue declined. That still beat Wall Street's estimate of $602.7 million.

Regis, like many hair and beauty operators, has been squeezed as customers scale back on their discretionary spending — which has led some to forgo certain treatments, purchase fewer products or go for hair cuts less frequently.

Revenue results were also weighed down by its European deconsolidation. Regis merged its European business with the Franck Provost Salon Group in January 2008.

The company declined to give fourth-quarter or full-year profit and revenue forecasts, citing the ongoing recession.

Regis owned, franchised, or held ownership interest in 12,854 locations as of March 31.