Regis Corp. (RGS) reported that its fourth quarter net loss widened to $73.6 million or $2.05 per share from $5.4 million or $0.14 per share in the fourth quarter of 2019. The latest-quarter results were significantly impacted by government-mandated temporary salon closures and include a non-cash long-lived asset impairment charge of $22.6 million primarily related to leases and $3.6 million of other discrete items.
Excluding items, adjusted net loss was $36.2 million or $1.01 per share compared to adjusted net income of $24.6 million or $0.62 per share for the same period last year. The year-over-year decrease was primarily driven by the government-mandated temporary salon closures caused by the COVID-19 pandemic. Analysts polled by Thomson Reuters expected the company to report a loss of $0.66 per share. Analysts’ estimates typically exclude special items.
Total revenues for the quarter were $60.1 million down $188.0 million or 75.8% from last year, driven primarily by the conversion of 1,448 company-owned salons to the Company’s asset-light franchise portfolio over the past 12 months and the government-mandated temporary salon closures due to COVID-19. The reductions were partially offset by the impact of the new leasing guidance. Analysts expected revenue of $51.15 million for the quarter.
At the end of fiscal year 2020, about 76% of the company salon portfolio has been franchised compared to 56% at the end of fiscal year 2019.
The company expects to complete its transition to a fully-franchised model no later than the end of fiscal year 2021.
The company anticipates that about 800 – 1,000 salons remaining company-owned salons will be transitioned to its franchise model and about 600 – 800 company-owned salons will be closed on or before their lease end date.
Source: Read Full Article