Regis still bleeding revenue, with 4% drop
- Article by: PATRICK KENNEDY
- Star Tribune
- August 23, 2012 - 9:54 PM
Revenue at hair care company Regis continues to fall.
For the fourth quarter ended June 30, the company reported revenue of $568.2 million, down 4 percent from the fourth quarter last year. Net loss for the quarter was $63.6 million, or $1.11 per share.
The fourth-quarter results included after-tax items of $89.2 million related to goodwill impairment charges in the company's salon division and the write-down of an equity investment. Excluding these charges, the company reported operating earnings of $25.6 million, or 40 cents per share, up from 37 cents per share in the fourth quarter last year. The operational earnings exceeded analysts' expectations for the quarter of 31 cents per share.
Annual revenue fell for the fifth straight year, ending at $2.274 billion, down 2.2 percent from $2.326 billion in fiscal 2011. Net loss for the year was $114.1 million, or $2 per share, compared to a loss of $8.9 million or 16 cents per share for fiscal 2011.
Operating earnings were a bright spot. For the year, operating profit rose to $80.5 million, or $1.30 per share, compared to $71.2 million or $1.16 per share in fiscal 2011.
Dan Hanrahan, Regis' new CEO, acknowledged there was a lot of work needed for the company to improve results, but found some positive news. "The gain in fourth-quarter operational earnings amidst a negative sales trend reflects Regis' ongoing commitment to controlling costs, managing our business more efficiently and a decrease in the effective income tax rate."
Hanrahan was named president and CEO of the Edina-based company on July 12 but started Aug. 6. Hanrahan is the former CEO and president of Celebrity Cruises, a division of Royal Caribbean Cruises, and replaced Paul Finkelstein, who stepped down in February after pressure from an activist hedge fund, and also replaced interim CEO Eric Bakken.
"Meaningful change is underway at Regis, and, as we look forward to fiscal 2013, we expect these changes will drive improvement in our same-store sales results," Bakken said in a July statement.
Regis has already undergone a whirlwind of changes, including the departure of Finkelstein. Bakken, the executive vice president and general counsel, was named interim CEO while the company searched for a permanent replacement. In April, Regis reported a $1.4 million loss for the third quarter, an improvement over the $57.4 million loss in the second quarter.
Patrick Kennedy 612-673-7926
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