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Biz Murphy | executive |
Matthew Doctor | executive |
Kersten Zupfer | executive |
Good morning, and thank you for joining the Regis Second Quarter Fiscal 2024 Earnings Conference Call. I'm your host, Biz McShane, Vice President Corporate Controller. [Operator Instructions]. The prepared remarks by our President and Chief Executive Officer, Matthew Doctor; and Executive Vice President and Chief Financial Officer, Christian Zupfer, are accompanied by the slides to help participants follow along.
As a reminder, this conference is being recorded. on remind our the filing earnings to comments to statements on also like our in today. included release made would everyone language that forward-looking apply I call the and X-K documents, GAAP website, along measures measures. our mentioned with found non-GAAP call today's of www.regiscorp.com/investorRelations, presentation can with today These be along with on on any reconciliation financial our their corresponding in Statements are located the section the slides and Financial Investor Today's Supplemental site. of investor Presentations
quarter our stabilize On QX my years, sales year-to-date. for the to Biz. call, the of ongoing today's our Jumping our X.X% our and to growth progress will discuss past rose as quarter of XXXX you, share fiscal and stakeholders. Thank the observations we into I results first year. have the Regis X.X% drive X work half reaccelerate the in Same-store value all about well made right for and as results to over
the last coming in quarter, year-over-year. quarter a challenging, with more Now the while bit X.X% October throughout saw we year, a roughly in sales above ended being comparable progression we flat
sales in between we're really While of were a we X.X% seeing December overall sales and the month driving of bottom from And notable December, versus disparity quartile and our XXXX. is top up salons, the perspective, this comp.
X% $X million lower across fiscal the We a comps. to onetime and are approximately gap really North timing expenses. due in for with with State of the our our count basis to consolidated $X.X million between million sales of of all salons as QX compared the XXXX prior $X.X and that Part those driving bright from salon brands QX have the Adjusted lower spots quarter. of to remaining quartile seeing revenues Carolina, received this due is on year's positive quarter demonstrated same-store some the top EBITDA they collectively was in traffic quarter
versus million adjusted adjusted our reported is second We relating of year improvement total use details million. improve use, ended the first which XXXX. $X.X in fiscal during liquidity million $XX.X decline $X QX is the on a Operating the by For will the the the our $X.X year, at has EBITDA $XX year-over-year Person half fiscal of a XXXX, half versus versus assuming a improved improvement. prior of dramatic million first XXXX million the liquidity We million. $X.X in income of business. no half of to versus project first income our 'XX, QX normalized and million first EBITDA fiscal half with continues $XX.X million into our of fiscal cash go for to $XXX,XXX the $X.X this $XX.X quarter of of million operating half to cash basis. the in to We changes
Additionally, the Zenoti an recognized coming January. our $X million in of in that beginning cash from up we December in accounting as indemnity ended payment from perspective
that we required come are for takes salons in salon are We amongst a than half the the to mentioned, roughly needle quarter, stronger the volumes, profitability. year sales salons fundamentals. year-over-year $XXX,XXX in sales across our earlier will is contributors and are forward XXX these net and the X% I in Those XXXX.The first I focus perspective, last to franchisees' the be top system continued XXX our they positioned averaged continue short There to to at the to due moving salons from and closures salons, mentioned expected continue, rate the of performance these think strong I as lower in on to viable and lease salons efforts closures in performance there CEO, difficult our versus quartile term up with footprint we years and more a as to franchisee optimizing ago to an medium much as fiscal smaller, see was continue counts away, disparity take to I from back this up, the expect see foundation XXXX When a the the move became especially need driving half of X we better significantly fiscal company. with the count a faced in have dates of salon albeit when to action situation base. rebuild stronger to more first decrease time the out where urgent of end on
maturity rapidly changing debt needed profile, processes, all adjustments to upcoming landscape things for support G&A, franchisee Our need to numerous cash and organizational profitability, address industry noncore business address lines, a flow quickly. and we
the the Now increasing over in of and to the been we And focus. longevity business last ensure this was have this And stabilizing the priority of progress course the today, made company's situation has X significant primary we and the the as stability our company. profitability. years, evaluate really
done. remains work be However, to
Our being to cash to our primarily comp and debt. service a of due is deployed of our on interest sales the lower base underperformers closures are salons on those expense
to today, critical purpose able and we continues will strategic structure, a Now up and Regis address our our to long-term position for as a areas inflection further And advance we X and assess business to capital our growth. announced first alternatives following Board to strength. key Improving our Regis, operate foremost, what for the us set the strategic is are from alternatives sheet franchisor a ahead I need point of and are a as we at as truly we process. have are our to huge a business. of previously our which where evaluate be believe But the we look of opportunity brands believe sustainable is for balance
forward. act And business and our if allocation the strategy we given will capital our also can sheet that both the to challenges, develop value the a generate our stay higher maximizes position, and we must our compliance and stakeholders. ability our assets address currently, balance ensure we to requires it financial of resources, balancing deploy this Now debt for us returns limited give use a because drive that in
strategic review this update future is of this in an on course. we Regis' Our process component at critical have will due aimed and
Now are critical. on our all focus the customer our experience brands. feedback of improving clear customer is and area focus It across major next an through experience that become and of customer data, us basics salon is to visits intense returned the to has
franchisees' Now there replacement our in an we know quality being to haircuts and time return our customer that intentional to experience is for no the excellent now more is and all approach. and
this modernization. the schedule customers and execution between and customers new rigor proposition is the business. the consistent guidance really early been have required service our tenet price focus with more franchisees. salons, the times, few important and offerings potential salon It expected existing existing brands. stages bringing to image systems, be implement the us, interactions need be poor more how standardization, a we can bad processes customers we themselves, fully will to what our in-salon and ability to and experience retain execute core fact over pre the and services have on attract in in experience, regarding management probably protect evaluation The the of starts to to ultimately the interact and and visit are our years, our here. our We to on our a taken haircut that salons. longer-term and change of value And appreciate service increases last the post is with We the and And that or properly
areas focus In and addition salon our commitment to to renewing other customer increasing the productivity. experience
this CRM built of system benefit all the of and platform. our utilizing loyalty functions key will into Zenoti software Now of effort native to finalizing the salons across the be our to the and adoption from new scale as our point-of-sale
And of positive quarter XX% example, Supercuts QX all continuing is X.X%. have runway this roughly overall and clear comps too deliberate an taking platform we those bookings XX, only by systems is in opportunity Online with versus increase brands approximately And the across June Zenoti expected customers is of there increase XX drive a online than with here. X,XXX engagement I part been and in far through approximately We demonstrated aheads. year. another digital the our to Zenoti salons traffic an greater currently major March customer by migrate as super and walk-ins organic booking, salons with -- XX% of to point-of-sale booking call is brands on online an same-store XXX plus have Now XX% opportunity way. And the a remainder our across to of sales XX% channels, when digital booking, with as of the experience more really in approach for the fiscal further shift our or to year-over-year 'XX. mentioned for we've cuts about as there combining for multiple seen digital split at earlier standardization long. up think demonstrating we
for long Now right completing Regis, and term. long what company technology franchisees on a journey the landed major sustainable a have transition technology we this our milestone I been solution will has for our in ultimately, mark and believe for the
Zenoti, mostly that traffic find in strategies right to effort combination promotions through begun sales. been an those to pilots to use After we've These profitability. also pilots our awards. that In only observing drive and loyalty have on and loyalty ready rolled test addition to results, to and Supercuts but program, of we out that targeted have Supercuts sales are They drive broader examples franchisee a some increases are one, scale. not be
who in Now this retention. success Xx this the we're XX% seeing driving members and also XX-day months on coming we program retention those X around sales in are rates has now the non-members. higher members areas, piloting versus and seeing frequency increased over of with for through X program, been metro And for last loyalty are with
Walmart into this, the Plus members for participating partnership of haircut. also earned impacts to those discounts offering raise salons, out or X% points significantly receive to and a has Supercuts of freeing be team. pilot busy redemptions is program. combined free conjunction customers promotion this sales Supercuts began brand Tuesday Tuesdays our this We our high-score example And XX the promotion offer rolling have haircut. the which seen services recently salons to locations game on August plus reactivated can the promotion brand more of a from national more products. more than in either late up lean rollout days shifting consideration are positive and seen, the that subscription on our received of uniquely on our of media $X big a we And of SmartStyle, and if around approximately higher, score we were Tuesdays a Tuesday as is of traffic XX in weekly Supercuts where yesterday, last out this heavier saw traffic week. XXXX, may widely going in that XX, broadly one which subsequently in to with We some more X/X in awareness, new launched Another SmartStyle with our subset Having is in the across we on increase steps and that is more We've Walmart Walmart off taken XXXX piloted own. rolled currently is you by and entrants guests here example a A and just good this game highlight or believe February trial. of the is can now of
see a more to in we opportunity cost-effective the Now will future. major manner, look around we in like a event as explore and trial opportunities this drive to this an
customer be will component experience core and our of salon support a able stylists. the productivity of Now to being continued improve
deployed our support at will platform, the the developed services we structure, franchisee cited per quality How network the as tools and enable is they in as an will the community, to XX,XXX the of price improving franchise efforts franchisees, deliver well the proprietary brands. of as international strong as and training of increasing have that accelerated that stylists accelerated place continue addressing additional salon ensure to with We to digital system critical salon openings and is customer new to trainers to complement point. into attractive the through components our is and corporate markets in to be entry efforts. playground unit the our our our capital capital community, nature through of successfully Education experience, continue And given over often pace from and as would reason be to the leader supporting and pursue employed support receives our system. stylist these we our training business will choose advance hands-on year.Now potential why stylist part current of an A digital the views productivity expansion, case franchisees modules Regis industry and well month foundational development scaling stylist have our training last salon proper hair
addition I to been of In managing G&A. program Enormous wanted incentive enhance to to on lastly, for the here made allowing a our salon strides potential base our remodel existing scale.And much touch have larger at to date. image
Now in end current million, of our last million savings. our $XX few to currently equating G&A of the close million 'XX -- to $XX run the fiscal from or years, year approximately went in rate at XX% $XX
towards not continue adversely the long-term manage and of our our to ensure sustainability. any organization as do further growth business that and size continue we moves affect will we forward, Moving
monitor for just continued to only strategic on the turn are and of initiatives before we've past of but related have Kirsten? our of close you now as results. all progress have today of will and detail our these as we to is stylists, I wrapping Regis' employees, midst our to this growth. a thanking appropriate. Kirsten I once on And process, X QX continue comments completion. and looking work started. and that provide call franchisees, I thanking We limited hard laid that in again contributions. Regis its executing getting of to I of proud over been over for want continue I the until your up, be just will we process course reiterate comprehensive G&A will am want to vendors years, first out the the our I work as made the the by all part chapter to to and to in half forward am alternative your more our and next adjust as interest partners And
Thanks, Matt.
For will morning's quarter I call, this our review results. second
income, in positive see saw with second strong our the more positive operating increased business. earnings positive quarter Overall, The net continuing are second EBITDA. we sales, beginning adjusted income detail to the and stability quarter Reviewing system-wide same-store per in statement. share income, and
was The has which is up from a no expected profitability. $XX.X second rental and million and relates prior million primarily to declined revenue quarter revenue and in revenues were reduction impact the gross $X.X of This and franchise on income, year. decline expense a
million, product the Additionally, down core of million the and profitability. number of transitioning second of of out Royalty reduced company-owned salons last was on business the closures $XX.X prior to quarter year and versus sales revenue salon the course represents our with minimal over XX revenue revenue impact which months. fee due $X.X
our income an operating and the compared to in of the the in which prior quarter. period. increase million reserve charge year by system-wide grew reflection depreciation in quarter.We GAAP the is of GAAP inventory quarter in income was revenue Another lower to our prior driven operating same-store year posted performance $X.X X.X% million $XXX,XXX $X.X sales, The in of
operations previously continue income a of million loss reported We in share to of of expect of net each quarter, in Opensalon of quarter $X.XX improvement related million in the in to loss and $X.X operating we and profit a per relates gain that the earnings positive continue.We second to per sale year 'XX. income a compared mentioned and operating improvement trend ago $X $X of a year a to Pro million ago. produce share to The $X.XX the and June discontinued
January. we mentioned, $X million received Matthew in the As
to decrease to million our adjusted consolidated quarter of results. company year's to of EBITDA State adjusted prior relief remaining the with a Now COVID-XX second revenue $X primarily basis, the from timing to and $X.X million in million due compared related On The North $X.X grant was quarter. was let's Carolina to million lower $X.X expenses. due an turn the receiving the
timing expenses. an $XXX,XXX primarily million $XX.X the see quarter. variability prior year was G&A in quarter, G&A adjusted the to our is increase some quarter-to-quarter, the do Our of second due We for which from of
our last million versus rate expectations was We lowered $XX quarter, which to million million. run have $XX to to million view our $XX annual $XX G&A
EBITDA Our million related quarter, primarily grant compared to to $X.X closing discussed, salons fiscal $X.X segment do lease decline the at business an same to million $XXX,XXX is third economic is basis, $X.X of a period the in salons decline sense quarter This G&A company-owned end EBITDA previously a year. company-owned or adjusted are from when come as the Carolina of in buyout adjusted the of last in quarter. having $X.X franchise due the current for decline either achieved end loss-generating remaining to the million our The offset lost core fewer prior of it quarter, large partially $XXX,XXX the company-owned timing decline at in million On spend. a number by year. negotiating COVID to North will so. salons A makes we least our our
North company-owned salon year $XXX in million $X.X to of the in the grant fiscal of partially EBITDA our lower XXXX. $X.X to half for as franchise for fiscal in from first the less $XXX by the was the have well second sales to primarily reduction and the G&A half to of So Adjusted first expected in to lower Similar million, million half Revenues received improved a fiscal as our decline second year $XX.X EBITDA the primarily due the the impact segment compared year Adjusted million compared decline, of a half the $XX.X and of product first rental quarter year first million half in relates State were XXXX. our and salons the this million of income Carolina of was offset company-owned revenue XXXX. wind XXXX. down year rent, will to franchisees. improvement franchise
December outstanding, was $XX.X our we XXXX, At including available XX, revolver fees, million $XXX.X of had liquidity, as December Turning XX, capacity debt of to liquidity, million cash. of financing of deferred and $X.X excluding $XX million. million
We are violate our the to in to no the during our term impacts assuming business. major of any with and compliance of facility not do covenants currently, we the debt credit covenants expect
Additionally, business. we operate the believe adequate liquidity to we have
liabilities in the operating corporate of lease to respective the and due to our million for As a shows to franchisees company-owned cash is standards, position, liabilities our franchise moving accounted similar Regis off liabilities their sheet office life of entire leases. leases debt our liabilities million year. half count not reduction approximately reminder, from to the to by the first be to of over salons and over leases. leases.In of due obligations the remaining million accounting These which of due serviced to into the the approximately franchisees and franchisees balance salon also to related with amounts we lease our franchisees liabilities the over continue the Regis' subleasing our operations, solely their of space for should the responsible is for million $X.X $XXX used $X.X Regis associated they have salons, $XX million reduction. decreased sign factored year, life which of the long Having so prior have been. pay years as last X $XXX as These are
expect of fiscal and $X.X interest primarily cash debt. committed to fiscal grant remains cash by in management discussed million variable generation. to management our interest cost second bank the to due $X.X cash received operating structure, activities half use due expense continued less on do and million $X.X lower higher We in the returning approximately to million Excluding partially to in cash offset flow XXXX, the improved rates year, our year increased of earlier used
items Before to the wrapping more trading up On have remarks, Regis' I began I stock NASDAQ. my January highlight. few a wanted Xth, on
on NASDAQ to and are national be make move to We securities the continue a trading to to exchange. pleased able
likelihood to which limitations Regis. significant available income. its or and Biz tax benefits company Additionally, protect my and offset company's are support to to or the yesterday, plan NOLs, its carry it represent the I that I preservation of current, concludes This The by valuable a prepared approximately of a tax certain wrap in you NOLs your has and attributes. other result million U.S. $XXX ownership Regis or tax continued designed attributes of for availability up Regis asset income. would use ability remarks. to shareholder federal has designed the forwards turn in thank preserve certain to the the we plan announced future to future adopted like value call. that NOL taxable current is mitigating to on changes, would will Regis' offset taxable other interest back to to
earnings conclude will for you Thank today's joining. This call.
have results, any our about and through day. at e-mail you have Thank contact If questions Investor you, a investorrelations@regiscorp.com. Relations Kirsten please financial our great
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