Regis Slips To Loss In Q4, Misses View

(RTTNews) - Regis Corp. (RGS), an operator of hair salons, on Tuesday reported a loss for the fourth quarter compared to a profit in the prior-year period.

The latest quarter's results reflect lower revenues and losses related to the Empire Education Group. Adjusted loss for the quarter missed analysts' expectations, while revenues beat their estimates.

The Minneapolis-based company's net loss for the fourth quarter was $17.02 million or $0.30 per share, compared to net income of $675 thousand or $0.01 per share in the same period last year.

The latest quarter's results included non-cash losses of $0.29 per share relating to Empire Education Group. In addition, the latest quarter's results include net discrete expense of $11.5 million, compared to net discrete after-tax expense of $2.8 million last year.

Adjusted loss per share for the quarter was $0.09, compared to adjusted earnings of $0.06 in the prior-year period. On average, 4 analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude one-time items.

The adjusted loss for the quarter reflects decrease in earnings from same-store sales declines, higher labor costs and non-cash equity in losses of Empire Education Group.

Revenues for the quarter declined 4 percent to $483.93 million from $502.25 million in the year-ago period. Analysts had a consensus revenue estimate of $477.50 million.

Service revenue for the quarter declined 3 percent to $380.2 million, while product revenues decreased 9 percent to $92.6 million.

Consolidated same-store sales for the quarter declined 1.8 percent, compared to a decrease of 3.1 percent in the prior-year period. The company estimates the shift of Easter from March 2013 to April 2014 positively impacted same-store sales for the latest quarter by about 70 basis points.

Operating expenses decreased 6 percent from the year-ago period to $481.46 million.

For fiscal 2014, Regis' net loss was $135.73 million or $2.40 per share, compared to net income of $29.19 million or $0.51 per share in the prior year. Adjusted loss per share for the year was $0.27, compared to adjusted earnings of $0.18 per share in the previous year.

Revenues for the year declined 6 percent to $1.89 billion from $2.02 billion last year.

Street expected the company to report loss of $0.11 per share for the year on revenues of $1.88 billion.

Looking ahead, Dan Hanrahan, President and CEO of Regis said, "Our focus will be on three areas to improve execution and performance in 2015. First, we will build our Asset Protection capabilities. Second, we will continue to train and develop field leadership talent and capabilities and leverage recruitment pipelines we are building. Third, we will invest in our stylists by strengthening our technical education programs."

RGS closed Monday's trading at $14.75, up $0.10 or 0.68 percent on a volume of 514,718 shares.