Key Takeaways
- • Regis Corporation (NasdaqGM: RGS) reported first fiscal quarter 2027 revenue of $54.3 million, down $4.7 million from $59.0 million a year earlier, driven primarily by lower non-margin franchise rental income and company-owned salon revenue.
- • Net income fell to $0.5 million ($0.18 diluted EPS) from $1.4 million ($0.49), while adjusted diluted EPS was $0.48 versus $0.50; adjusted EBITDA declined to $7.7 million from $8.0 million.
- • Operating income of $5.3 million included a $2.5 million accrual tied to a Department of Justice inquiry into a PPP loan obtained by Alline before Regis acquired it in December 2024.
- • Company-owned same-store sales declined 1.1% and management flagged declining guest traffic in company-owned salons as requiring immediate attention, while Supercuts same-store sales rose 2.0%.
- • Regis ended the quarter with $20.8 million in cash and $121.1 million in outstanding borrowings, and decided not to refinance now, citing scheduled decline in the call premium on existing debt in mid-2027; it expects to return to debt markets in early calendar 2027.
Summary
Regis Corporation reported financial results for the first fiscal quarter ended September 30, 2026, with consolidated revenue of $54.3 million compared with $59.0 million in the prior-year quarter. According to the company, the $4.7 million decline was driven primarily by lower non-margin franchise rental income, as franchisees began signing their own leases and the number of franchise salons fell, along with lower company-owned salon revenue, which the company attributed largely to closures of underperforming salons. Franchise revenue was $35.4 million, down 8.5%, while royalties fell 2.9% to $13.6 million.
Profitability declined across the quarter. Operating income was $5.3 million versus $5.9 million, reflecting lower royalties and fees and a $2.5 million accrual related to a Department of Justice inquiry concerning a Paycheck Protection Program loan obtained by Alline that was forgiven before Regis acquired the company in December 2024. A $2.1 million gain on the derecognition of benefit obligations and corporate cost savings partially offset those pressures. Net income was $0.5 million, or $0.18 per diluted share, compared with $1.4 million, or $0.49, a year earlier; the prior-year period also included a $1.0 million gain tied to the Alline earnout liability adjustment. Adjusted net income was $1.4 million, flat year over year, and adjusted EBITDA was $7.7 million versus $8.0 million. Franchise adjusted EBITDA fell to $6.1 million, while company-owned salon adjusted EBITDA was flat at $1.6 million.
Same-store sales were 2.0% higher at Supercuts, down 1.1% at company-owned salons, and up 0.2% on a consolidated basis. Chief Executive Susan Lintonsmith said declining guest traffic in company-owned salons "requires immediate attention" and that the company is taking targeted actions to increase traffic across its brands. The company recorded its eighth consecutive quarter of positive operating cash flow, with $2.6 million in net cash from operations, an improvement of $0.3 million.
On the balance sheet, Regis ended the quarter with $20.8 million in cash, $121.1 million in outstanding borrowings (including a $108.2 million term loan, $12.5 million of paid-in-kind interest and a $0.4 million revolver draw), and total available liquidity of $30.4 million. During the quarter it repaid approximately $7.9 million of debt. CFO Kersten Zupfer said the company evaluated senior bank debt, private credit, preferred equity and whole business securitization, but concluded that refinancing now would not deliver sufficient value given the scheduled decline in the call premium on existing debt in mid-2027. Regis expects to return to the debt markets in early calendar 2027 and to continue reducing debt under its scheduled repayment obligations. The company will discuss results on a webcast on November 5, 2026.
Profitability declined across the quarter. Operating income was $5.3 million versus $5.9 million, reflecting lower royalties and fees and a $2.5 million accrual related to a Department of Justice inquiry concerning a Paycheck Protection Program loan obtained by Alline that was forgiven before Regis acquired the company in December 2024. A $2.1 million gain on the derecognition of benefit obligations and corporate cost savings partially offset those pressures. Net income was $0.5 million, or $0.18 per diluted share, compared with $1.4 million, or $0.49, a year earlier; the prior-year period also included a $1.0 million gain tied to the Alline earnout liability adjustment. Adjusted net income was $1.4 million, flat year over year, and adjusted EBITDA was $7.7 million versus $8.0 million. Franchise adjusted EBITDA fell to $6.1 million, while company-owned salon adjusted EBITDA was flat at $1.6 million.
Same-store sales were 2.0% higher at Supercuts, down 1.1% at company-owned salons, and up 0.2% on a consolidated basis. Chief Executive Susan Lintonsmith said declining guest traffic in company-owned salons "requires immediate attention" and that the company is taking targeted actions to increase traffic across its brands. The company recorded its eighth consecutive quarter of positive operating cash flow, with $2.6 million in net cash from operations, an improvement of $0.3 million.
On the balance sheet, Regis ended the quarter with $20.8 million in cash, $121.1 million in outstanding borrowings (including a $108.2 million term loan, $12.5 million of paid-in-kind interest and a $0.4 million revolver draw), and total available liquidity of $30.4 million. During the quarter it repaid approximately $7.9 million of debt. CFO Kersten Zupfer said the company evaluated senior bank debt, private credit, preferred equity and whole business securitization, but concluded that refinancing now would not deliver sufficient value given the scheduled decline in the call premium on existing debt in mid-2027. Regis expects to return to the debt markets in early calendar 2027 and to continue reducing debt under its scheduled repayment obligations. The company will discuss results on a webcast on November 5, 2026.
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