Hair salon operator Regis posts profit for 3Q

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MINNEAPOLIS (AP) — Hair salon operator Regis Corp. reported a profit for its fiscal third quarter in contrast to a loss a year ago when it logged severance costs and other items.

The company, whose salons include Supercuts, MasterCuts and others, earned $2.4 million, or 4 cents per share, for the three months ended March 31. That compares with a loss of $1.4 million, or 2 cents per share, a year earlier.

The prior-year period included severance costs, a markdown of the value of the Provalliance investment it sold and other one-time charges.

Stripping out some tax credits, costs tied to the sale of the Hair Restoration Center and other items, earnings for the current quarter were 1 cent per share.

Analysts surveyed by FactSet expected earnings of 14 cents per share.

Regis said that the current quarter's earnings were reduced by about 12 cents per share because of two fewer sales days in the period; higher labor costs mostly related to stylists putting in more hours; increased retail products costs primarily related to clearance sales and reduced equity in earnings of Empire Education Group.

Revenue fell 6 percent to $504.9 million from $535.9 million as service revenue and product revenue declined. Wall Street predicted $518.5 million in revenue.

Revenue at stores open at least a year edged down 0.3 percent — but the company said it was an improvement from both the first and second quarters. This metric is a key indicator of a retailer's performance because it excludes results from stores recently opened or closed.

Regis owned, franchised or held ownership interests in approximately 10,000 worldwide locations as of March 31.

Its shares finished at $18.89 on Monday. They have traded in a 52-week range of $15.79 to $19.59.

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