Regis Corporation Reports Q2 Fiscal 2025 Results with Revenue Decline and Increased Net Income

Regis Corporation reported its financial results for the second quarter of fiscal year 2025, revealing a total revenue of $46.7 million for the three months ended December 31, 2024, a decrease of 8.6% from $51.1 million in the same period last year. The decline was primarily attributed to a reduction in franchise salon counts and negative same-store sales. The company’s net income for the quarter was $7.6 million, compared to $1.0 million in the prior year, driven by increased income from discontinued operations related to the sale of its Opensalon® Pro software.

In terms of operational metrics, Regis reported a total of 4,248 salons as of December 31, 2024, which includes 3,925 franchised locations and 323 company-owned salons. The company experienced a net closure of 152 franchise salons during the six months ended December 31, 2024, alongside the acquisition of 314 salons from Alline Salon Group, which was finalized on December 19, 2024. This acquisition is expected to enhance Regis's operational capabilities and provide a platform for testing new brand initiatives.

The company’s operating expenses for the quarter were $41.2 million, down from $46.3 million a year earlier, reflecting a decrease in general and administrative expenses, despite incurring $1.2 million in acquisition-related costs. The general and administrative expenses for the six months ended December 31, 2024, increased by 11.9% to $25.2 million, largely due to severance costs and acquisition expenses. Additionally, interest expenses decreased to $4.8 million from $6.2 million, attributed to a reduction in outstanding debt.

Regis's balance sheet as of December 31, 2024, showed total assets of $530.1 million, slightly down from $530.5 million at the end of June 2024. The company’s cash and cash equivalents increased to $10.2 million, while total liabilities decreased to $463.4 million from $473.7 million. The acquisition of Alline contributed approximately $16.6 million in goodwill, reflecting the expected synergies from integrating the new salons into Regis's operations.

Looking ahead, Regis Corporation anticipates that the Alline acquisition will bolster its revenue from company-owned salons and improve overall operational efficiency. However, the company also faces challenges, including the need to adapt to changing consumer preferences and the competitive landscape in the beauty salon industry. The management remains focused on leveraging its expanded salon portfolio to drive future growth and enhance profitability.