As Regis Corp. continues selling its company-owned hair salons, the overall business continues to be hampered by the coronavirus pandemic.
The St. Louis Park-based company on Monday reported results for its fiscal first quarter, ending Sept. 30, that missed analysts expectations on both the top and bottom line. And Regis shares tumbled in early trading on a day when broad-market indexes were sharply higher.
Revenue was $111.4 million, down 55% from $247 million a year ago, when it had 1,056 more company-owned salons adding to the top line. The firm has been converting to an asset-lite business model by selling company-owned locations to franchisees, and it sold 137 in the latest period.
But the company also estimated that $44 million of the revenue decline overall was from reduced traffic due to the pandemic, including mandated re-closing of salons in some places. Analysts expected revenue of $145 million.
The company continues to seek buyers for its remaining salons.
"Despite the uncertainty of current times, the opportunities for Regis today are very real," new chief executive Felipe Athayde said in a statement.
"We have seen consistent high interest in the remaining salons left in our corporate portfolio, from potential investors who see the current environment as a great opportunity to build a portfolio of hair salons to serve as a platform for future consolidation and aggressive new unit growth," he said.
The company lost $35.3 million in the quarter, or 98 cents a share, compared to a net loss of $13.8 million, or 38 cents a share a near ago.
Adjusted for restructuring and other one-time costs, Regis lost $27.9 million, or 78 cent loss a share. It had an adjusted profit of $13.9 million, or 37 cents per share, a year ago.
Analysts expected an adjusted EPS loss of 13 cents a share.
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