Earnings call transcript: Regis Corporation Q4 2025 Sees Stock Surge on Robust Revenue Growth

Regis Corporation reported a strong performance in its fourth quarter of 2025, with total revenue climbing by 22.3% year-over-year to $60.4 million. The company’s stock saw a significant uptick, rising 13.07% in premarket trading to $25, driven by positive investor sentiment around its strategic initiatives and financial results. According to InvestingPro analysis, the company is currently trading below its Fair Value, with a "GOOD" overall financial health score. The company’s full-year revenue reached $210 million, marking a 3.5% increase from the previous year.

Key Takeaways

• Regis Corporation’s Q4 revenue increased by 22.3% year-over-year.
• The stock surged 13.07% in premarket trading, reflecting strong market confidence.
• The company launched a new Supercuts loyalty program, now accounting for 36% of transactions.
• Regis acquired 300 salons from its largest franchisee, signaling expansion.
• The company closed 448 underperforming franchise locations to streamline operations.

Company Performance

Regis Corporation demonstrated robust growth in the fourth quarter, significantly boosting its revenue by 22.3% compared to the same period last year. This performance underscores the company’s successful strategic initiatives, including a focus on digital transformation and operational efficiency. The acquisition of 300 salons and the closure of underperforming locations reflect a targeted approach to expansion and cost management.

Financial Highlights

• Revenue: $60.4 million, up 22.3% year-over-year
• Full-year revenue: $210 million, up 3.5% year-over-year
• Operating income for fiscal 2025: $19.9 million
• Adjusted EBITDA: $31.6 million, up 14.9% year-over-year
• Cash from operations: $13.7 million, an increase of $15.8 million from the previous year

Market Reaction

Regis Corporation’s stock experienced a notable rise of 13.07% in premarket trading, reaching $25. This increase reflects investor optimism about the company’s growth prospects, driven by its strategic initiatives and strong financial performance. With a beta of 1.69, the stock has shown higher volatility than the market, and InvestingPro data shows a strong 11.11% return over the past year. The stock’s movement is significant, considering its 52-week range of $15 to $29.28, indicating a positive market sentiment.

Outlook & Guidance

Looking ahead, Regis Corporation anticipates a meaningful increase in unrestricted cash generation and plans to invest in business growth and debt management. The company is set to launch a new salon prototype in early 2026, which is expected to further enhance its market position. While the future guidance for FY2026 projects an EPS of $17.84 and revenue of $484.58 million, InvestingPro analysts maintain a "Strong Buy" consensus recommendation, despite expectations of near-term profitability challenges.

Executive Commentary

Interim CEO Jim Lane expressed optimism about the company’s future, stating, "We are excited about the future and we look forward to sharing more updates with you in the months ahead." CFO Kirsten Zupfer highlighted the company’s profitability and operational strength, saying, "We expect this improvement will be driven by continued operational strength, a full year of Align results, and the absence of nonrecurring expenses."

Risks and Challenges

• Economic uncertainty could impact consumer spending in the salon industry.
• The integration of newly acquired salons may present operational challenges.
• Digital transformation initiatives require significant investment and execution risk.
• Market competition remains intense, particularly in the value-focused segment.
• Supply chain disruptions could affect product availability and pricing.

Q&A

During the earnings call, analysts inquired about the partnership with Forum3 and its role in the company’s digital transformation. Discussion also centered around financing options for the new salon prototype and the performance of the Align acquisition. Additionally, questions were raised about the company’s debt refinancing strategy, highlighting investor interest in the company’s financial health and future plans.

Full transcript - Regis Corp (RGS) Q4 2025:

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Good morning, and thank you for joining the Regis fourth quarter two thousand twenty five earnings conference call. I am your host, Kirsten Zupfer, executive vice president and chief financial officer. I am joined today by our Interim Chief Executive Officer, Jim Lane, and our Chairman of the Board, Mike Merriman. All participants are in a listen only mode, and this conference is being recorded. I would like to remind everyone that the language on forward looking statements included in our earnings release and eight ks filing also applies to our comments made on the call today.

These documents can be found on our website, www.regiscorp.com/investorrelations, along with a reconciliation of any non GAAP financial measures mentioned on today’s call with their corresponding GAAP measures. With that, I will now turn the call over to Jim Lane.

Jim Lane, Interim Chief Executive Officer, Regis Corporation: Thank you, Kirsten, and good morning, everyone, and thank you for being with us for our fourth quarter and full year fiscal twenty twenty five earnings call. It’s a privilege to address you today as Interim Chief Executive Officer, a role I’ve had the opportunity to serve in since July 1. As some of you know, I’ve been with Regis since 2013, most recently serving as Executive Vice President of Brand Operations. Before this role, I spent nearly a decade as Chief Operating Officer for both our corporate and franchise salon systems, working closely with our corporate employees, franchisees and business partners to drive operational excellence and strengthen our iconic brands. Prior to joining Regis, I held senior leadership roles at Gap Inc, where I was responsible for a $2,500,000,000 business across seven fifty stores in The U.

S. And Canada, and earlier in my career at Dick’s Sporting Goods and Target. In my thirty years of experience, I’ve never been as energized and optimistic about an opportunity as I am about the role I was recently asked to take on. I have leaned into the opportunity to emphasize continuity and stability. Yet at the same time, the leadership team and myself are not standing still.

We have been advancing on a forward thinking transformational plan designed to drive deeper customer connections with all our brands and a more effective and modern approach to driving growth. These efforts are directed toward enriching our business model and elevating our new brands to turn the tide on declining traffic and pave the way for sustainable long term growth, enduring profitability, and a continued cash flow generation. As we undergo this transformation, I want to assure you that the priorities and initiatives that have been previously outlined are still firmly in place and supported by a collaborative effort across the leadership team, management, and the board of directors. Namely, we have two primary priorities that we are focused on: the holistic Supercuts brand transformation and optimizing and growing sales and profitability in our company owned salons. In addition to these priorities, we will increase our focus on the other brands within our portfolio.

Collectively, these brands represent a meaningful share of our business. The key learnings and new processes developed through our focus on Supercuts and our company owned salons are expected to carry over and create value across the rest of the portfolio, further fueling a flywheel like effect on our total business. When I assumed the role of interim CEO, I wanted to ensure that our organization understood these priorities and is committed to the transformational vision and strategy of Regis. I spent many of my first days in this new role connecting with employees, franchisees, and investors to help ensure a smooth transition and steady the organization. The senior leadership team convened for a week to reinforce unity across the organization and advance the process of finalizing our financial and operating plans for fiscal year twenty twenty six.

We were joined by our strategic partner, Forum three, led by Adam Brotman. Adam is one of the world’s leading customer loyalty and engagement experts with over twenty five years of experience leading major tech and consumer brands, including in his role as Starbucks inaugural chief digital officer and EVP of global retail operations. Forum three has been an invaluable partner since the start of this calendar year, and I am pleased they will continue as part of our team. Their deep expertise in digital and AI transformation and brand strategy is helping us accelerate key initiatives that are critical to modernizing our customer experience and unlocking new growth opportunities. While we expect our transformational journey will take time, we are making good progress and are encouraged by the early results.

Our business is consistently profitable. For fiscal year twenty twenty five, we delivered $19,900,000 in operating income and $31,600,000 in adjusted EBITDA, a year over year increase of 14.9%. For the fourth quarter, consolidated same store sales increased 1.3% year over year and at Supercuts, our largest brand, we experienced an increase of 2.9. Importantly, the 2025 marked our third consecutive quarter of positive cash from operations. While these results are solid, we are encouraged by the opportunities ahead to build on this momentum.

We are laying groundwork to change the trajectory of declining traffic, reinforce our core operations and equip both Regis and our franchisees to succeed in a fast changing industry. The professional hair salon industry remains a resilient and essential segment within the broader beauty and personal care market, driven by recurring consumer demand, evolving trends and increasing focus on self care and wellness, the industry continues to show steady growth, particularly in the value focused segment where we operate. Industry demand is supported by a mix of core services and add ons. And importantly, the industry operates on a high frequency repeat service model that lends itself well to brand loyalty and membership programs. Digital channels such as online booking create efficiency for the customer as well as the stylist.

We have seen strong business correlation in salons that have higher online booking percent. This bodes well given our omnichannel focus. Turning to an update on our first near term priority, the holistic transformation of our Supercuts brand. The roadmap for Supercuts encompasses three pillars. The first is to modernize and evolve the brand by strengthening its relevance with today’s consumers and better reflect the quality and value we deliver.

This refresh is a holistic update that spans the spectrum to create a more contemporary, consistent and engaging brand experience across every customer touch point. In support of this first pillar of refreshing the Supercuts brand, we recently completed a comprehensive brand research study that provides valuable insights into our customer and our brand. These findings are guiding decisions related to enhancing our brand and establishing meaningful differentiation within the market. The second pillar of our Supercuts transformation is our digital strategy and omnichannel engagement. In the fourth quarter, we advanced several key initiatives designed to strengthen customer connections and drive top line growth.

A highlight was the continued success of Supercuts loyalty program. Launched in the second quarter of this fiscal year, the program has already grown to represent 36% of transactions, an increase of 600 basis points since Q3. Supercuts Rewards not only fosters customer loyalty, but also delivers valuable personalization insights that enhance the effectiveness of current and future marketing efforts. The strong momentum we are seeing reinforces its potential to be a powerful driver of long term growth and customer retention with loyalty members proving to be our most frequent visitors and highest lifetime value customers. And our third pillar of focus for Supercuts, operational excellence, we successfully completed a second round of salon assessments, which were conducted by an objective third party.

These evaluations focus on salon level cleanliness, maintenance and other key operational areas like service menu adherence, marketing collateral execution and retail product inventory levels. The headline here is salons that consistently meet brand standards for cleanliness and operational excellence perform at a notably higher level on our primary salon KPIs, including sales and customer retention. Another work stream within this pillar is the development of our new salon concept. We are nearing the pilot launch of this initiative, which features a clean, modern aesthetic and is aimed at improving efficiency while elevating the experience for both customers and stylists. Turning to our second priority, optimizing and growing sales and profitability in our company owned salon portfolio.

In 2024, we completed the acquisition of more than 300 salons from our largest franchisee. Since January, these salons have been operating as company owned salons. As we’ve shared previously, this transaction delivers both meaningful financial benefits and important strategic advantages. Since taking ownership of these salons, we have focused on executing a comprehensive operation strategy. This includes a fully redesigned stylist pay model that is structured to improve productivity and reward performance.

In the near term, we will also launch several pilots tied to our omnichannel initiatives and the newly designed salon prototype. I want to emphasize the advantage our newly acquired company owned salons provide, both in accelerating innovation and in their potential to drive meaningful EBITDA. Just as importantly, they enhance our position as a franchisor by keeping us closely connected to day to day salon operations. Encouragingly, same store sales improved in Q4. While we still have work ahead, this is a multiyear strategy.

And our progress in the fourth quarter and the year reinforces our confidence in our strategy and our ability to execute. I want to thank our teams across North America for their hard work and dedication this past year. Their commitment to our customers, to one another, and to excellence execution has been instrumental in our progress. As we enter 2026, we do so as a focused and energized organization with a clear long term strategy and a commitment to delivering sustainable, profitable growth across our portfolio. Our top two near term priorities remain clear, advancing the holistic transformation of the Supercuts brand, while optimizing and growing sales and profitability in our company owned salon portfolio.

We are excited about the future and we look forward to sharing more updates with you in the months ahead. I will now turn the call over to Kirsten for a more detailed review of our fourth quarter financials. Kirsten?

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Thanks, Jim. Our fiscal twenty twenty five fourth quarter and full year results include the results of the approximately 300 salons that we acquired from Align in December 2024 during our 2025. As a reminder, our results for the quarter and the year reflect contributions from Align, but prior year results do not. As Jim discussed, our fourth quarter results reflect the progress we are making towards improving the financial profile of Regis and implementing initiatives to reignite growth. For the fur fourth quarter, we delivered a 58.7% increase in operating income, same store sales growth, and our third consecutive quarter of positive cash from operations.

We are encouraged by the progress we are making. Let’s start with a review of the results for the fourth quarter. Total fourth quarter revenue was $60,400,000, an increase of 22.3% or $11,000,000 compared to the prior year. This increase was primarily driven by increased revenue from company owned salons resulting from the acquisition of Align in December 2024, as well as an increase in same store sales of 1.3%. This increase was partially offset by lower royalties due to fewer franchise locations and non margin franchise rental income.

As of 06/30/2025, we had a net decrease of 744 franchise locations compared to 06/30/2024. Approximately 300 of these locations relate to the Align salons that converted from franchise to company owned. The 448 net closures during the year primarily involved underperforming stores, each with significantly lower trailing 12 sales volumes than our top performing locations. The performance gap between these closed stores and our highest performing units was approximately $350,000, underscoring the strong potential within our system and highlighting the opportunity we have to further enhance profitability margins and cash flow generation as we continue executing our transformation strategy. We continue to expect fiscal year two thousand twenty five to be the last year of closures in this order of magnitude.

In terms of profitability, we reported GAAP operating income of $7,300,000, an increase of 2,700,000 compared to 4,600,000.0 in the year ago quarter. This increase was primarily driven by operating income contribution from the Align salons, which was partially offset by lower royalties. Below the operating line, income from continuing operations was $118,400,000 compared to $91,300,000 a year in the year ago quarter. This year over year increase in income was due to improved operating income in the current period and to the release of a majority of our US income tax valuation allowance and a partial release of the Canadian income tax valuation allowance, both of which occurred in the 2025. These releases reflect improved financial performance and expectation of generating sufficient taxable income to utilize a significant portion of our deferred tax assets going forward.

It is also worth noting that income from continuing operations for the 2024 included a non cash gain on the extinguishment of long term debt of $94,600,000. As a reminder, in the 2024, we refinanced our credit facility, which reduced our debt by more than $80,000,000 and significantly strengthened our balance sheet. The gain in the 2024 was related to this refinancing. While there is considerable noise below the operating income line from non cash items, the real story is the substantial improvement in our operational performance. The increase in operating income reflects solid execution and ongoing momentum in our core business.

Turning to our adjusted results. As a reminder, in the 2025, we made a change to our methodology to exclude stock based compensation expense when presenting our adjusted results. All adjusted results in the current year and prior years have been adjusted to reflect this presentation. We believe our adjusted results are more representative view of the business. Reconciliations of our GAAP results to our adjusted non GAAP results can be found in our press release.

For the fourth quarter, our consolidated adjusted EBITDA was $9,700,000 an increase of 24.8% compared to $7,800,000 in the prior year quarter. The $1,900,000 improvement was primarily due to favorable Align salon EBITDA and lower general and administrative expenses, which were partially offset by lower franchise revenue. Our adjusted G and A was $10,400,000 in the 2025, down from $11,300,000 in the year ago quarter. Adjusted EBITDA for our franchise segment was $7,700,000 in the quarter, a $1,200,000 increase compared to $6,500,000 in the prior year quarter. This increase was primarily due to lower G and A expenses, which was partially offset by decreases in royalties as a result of a lower salon count.

Importantly, franchise adjusted EBITDA as a percentage of franchise revenue increased from 13.7% in the year ago quarter to 19.3% in the current period, a positive indication of the progress we are making in enhancing operational efficiency across our franchise network. Adjusted EBITDA for our company owned salon segment improved by $700,000 year over year to $2,000,000 for the quarter, primarily as a result of an increased number of company owned salons and closure of unprofitable salons. Additionally, company owned salon revenue for the prior year period included $1,300,000 of non cash revenue resulting from a change in estimate to gift card breakage. Turning to our results for the full year, total revenue for fiscal year twenty twenty five was 210,000,000, an increase of 3.5% or $7,200,000 compared to the prior year. This increase was primarily driven by increased revenue from company owned salons resulting from the acquisition of Align in December 2024.

We reported GAAP operating income of $19,900,000, a slight decrease from $20,900,000 in fiscal year twenty twenty four. As with the results for the fourth quarter, this decrease was primarily driven by lower royalties and fees, partially offset by operating income contribution from the Align salons. Income from continuing operations was $117,000,000 for fiscal year twenty twenty five compared to $89,100,000 in fiscal year twenty twenty four. Consistent with the fourth quarter comparison, the year over year increase was due in large part to the partial release of the company’s prior year income tax valuation allowance in the 2025. Income for the prior year period included a gain on extinguishment of long term debt of $94,600,000 Turning to our adjusted results for fiscal twenty twenty five, our consolidated adjusted EBITDA was $31,600,000 an increase of 14.9% compared to $27,500,000 in the prior year.

The $4,100,000 improvement was primarily due to higher net comp higher net company owned salon revenue as a result of the Align acquisition and lower g and a expenses, which were partially offset by lower franchise revenue. Our adjusted g and a was $40,200,000 in fiscal year twenty twenty five, which was in line with our expectations and down from $43,500,000 in the prior year. We remain committed to diligent management of our corporate G and A expenses and continue to expect our run rate for G and A to be in the range of $40,500,000 to $42,500,000 annually. Turning to cash flows. For the three months ended 06/30/2025, we generated $6,800,000 in cash from operations, which is an improvement of $1,700,000 compared to the 2024.

This brings our year to date total for cash from operations to $13,700,000, an improvement of $15,800,000 compared to fiscal year twenty twenty four. The increase in cash generation was driven by Align, operating profitability, and an accumulation of cash from our ad fund contributions. In evaluating our reported cash flows, we believe it is important to understand that cash flows are derived from two sources: unrestricted cash generated from operations, which is available for general corporate use, and restricted cash related to our ad fund, which is sourced from contributions made by our salons, both franchise and company owned. Ad fund cash is designated specifically for marketing purposes and not available for corporate use. In fiscal year twenty twenty five, our total reported cash from operations of $13,700,000 is comprised of $8,400,000 in cash generated for the ad funds, which is restricted, and $5,300,000 in cash generated from our core operations, which is unrestricted.

Notably, the 2 and a half million dollars of the restricted ad fund cash was generated in the fourth quarter. Included in the $5,300,000 of unrestricted cash from core operations, there were several nonrecurring items that were a drag on cash flow, namely severance related cash costs and onetime deal related expenses for the Align acquisition of $3,200,000 in aggregate. We do not expect these items to reoccur in fiscal year twenty twenty six. Importantly, the business continues to generate positive cash flows from operations, providing a strong foundation for growth and financial flexibility. As we look ahead to fiscal year twenty twenty six, our operating plan anticipates a meaningful increase in the generation of unrestricted cash from our core operations compared to fiscal year twenty twenty five.

We expect this improvement will be driven by continued operational strength, a full year of Align results, and the absence of nonrecurring expenses in fiscal year twenty twenty five that I just discussed. We also expect improvements in working capital usage to contribute to stronger generation of unrestricted cash from our core operations. Ad fund cash, which is, again, is designated specifically for marketing purposes and not available for corporate use, was building over fiscal year twenty twenty five as we slowed spending to focus on executing our business transformation strategy. Our marketing plans for for fiscal year twenty twenty six assume we will spend that ad fund cash that accumulated during 2025 as we implement initiatives aimed at returning growth. So while we expect unrestricted cash generated from operations to be higher in fiscal year twenty twenty six than it was in 2025, total reported cash from operations for fiscal year twenty twenty six may be lower when compared to the prior year due to our plans to strategically deploy cash accumulated in the ad fund.

As we consider the allocation of capital, our priorities include reinvesting in the business to drive growth, maintaining a disciplined approach to managing debt, and consideration of potential strategic transactions. In terms of liquidity, as of 06/30/2025, we had a $25,900,000 of available liquidity, including capacity under our revolving credit agreement and $17,000,000 in unrestricted cash and cash equivalents. As of the end of the fiscal year, we had a $125,300,000 in outstanding debt, excluding deferred financing costs and the value of warrants plus accrued paid in kind interest. As a reminder, in accordance with GAAP, our balance sheet includes approximately $216,600,000 of operating lease liabilities related to our franchisees’ salon leases. These leases have a weighted average remaining term of less than five years, and the obligations are serviced by our franchisees.

So long as the franchisees continue to meet their lease payments as they historically have, it is our view that these amounts should not be considered part of our debt position. We expect these liabilities will continue to decrease as the leases mature and as we continue to move away from franchise leases. In summary, our fourth quarter and our full year 2025 results reflect a profitable cash generating business with clear momentum and a meaningful opportunity ahead. This concludes our prepared remarks, and we will now take questions. Good morning.

Our first question is from Bill Charters from Sable Capital. Bill, please unmute your line.

Bill Chaters, Analyst, Sable Capital: K. Wait. Can you hear me?

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Yes. We can. Good morning.

Bill Chaters, Analyst, Sable Capital: Okay. Good. Yeah. Well yeah. Thanks.

And and great great quarter. That was that was great all around. I just had a few questions. I guess, can can you talk more about the form three initiatives in context of what they have done and what plans you have in the future to improve operating results? I mean, I know it’s been a lot of SEO, but I would I would love to get more context on on what is it like going forward.

Jim Lane, Interim Chief Executive Officer, Regis Corporation: Yeah. Bill, this is Jim. And and just thank you again for joining the call today. It’s good to have you. I’ll take that one.

You know, Forum three obviously has been, as I as as you heard in my remarks, and I think you know, pretty significant background in this arena that they’re focused on in terms of the transformation of of the Supercuts brand. You know, there’s there’s several things that they’ve been highly engaged with. One is the just the modernization and evolution of the brand. As as you heard in my remarks, we have just completed a comprehensive qualitative study on the Supercuts brand. We’ve learned a ton, and we’re actually just now kinda getting through all of those results.

And Forum three is helping us distill those findings, and and, obviously, to bring those things to life. In terms of who is who is shopping Supercuts, what generation, what are they looking for, this this is a particular area of of expertise, for Forum three and, certainly much more to come there. Omnichannel growth is is the other piece that I spoke to in the remarks. The whole loyalty rewards area, another area of, I would say, even more particular expertise for form three. They are we’re seeing good growth here for sure, as I noted, and and we’re continuing to focus on that.

And this is where Adam is particularly capable in helping us drive the continued growth there. And then the whole concept and notion of online booking, there is a strong correlation to business performance here. We see it very, very clearly. We want to ensure that customers can easily get into our salons for a service, whether it’s a quick haircut or a a more lengthy service for color, whatever it might be. And Adam and his team are doing some really, really good work to help us in that arena.

And then kind of to round it all out, the whole kind of notion of of operations excellence, you know, the strong correlation, as I said in my remarks, to salons who adhere to the brand standards. It’s interesting. You know, we share these results, obviously, with our franchisees, and and I think the even better news is that there’s a strong desire to make improvements when assessment results reflect the need for improvement. We’re really seeing our our franchisees grasp and embrace that, and we’re actually seeing improvements there. So that’s that’s a that’s a good guy for sure.

Sharing best practices from the company owned salons. You know, the the company owned salons are gonna be a a an area where we can, bring pilots to life and learn very, quickly. And then from that, we can share, best practices and and and, dare I say, gold standards of operating the business with the rest of our system. And then last but not least, you know, we’re continuing to work on the new salon prototype. That is coming along nicely right now.

And Adam and his team, again, here continue to lean in with their background and help us in those arenas. So just some some pretty pretty incredible things that I think they’re bringing to the table.

Bill Chaters, Analyst, Sable Capital: Mhmm. Absolutely. And and and regarding the the prototype, how would that be financed and and implemented? I mean, is that the cost of the franchisees? Does that ad fund marketing spend?

Do you take some of that to promote these new things? I I guess what I’m really trying to get at is is what cost is that to the corporation?

Jim Lane, Interim Chief Executive Officer, Regis Corporation: Yeah. It’s a good question. And and I’ll be honest, you know, we’re we’re looking at all appropriate paths to support all of those things. We haven’t landed on anything specific. That was work that we’re currently engaged with, and and I think it could be multiple areas and paths that we could take.

But for now, I can say that we’re reviewing it very closely to determine what is the best mix, if if you will, of an approach to take to bring those those salons to light. What I will say is that right out of the chute, we have numerous franchisees that are poised and ready to remodel salons, just holding, for the new prototype to come to light. And and that’s slated to, to to to happen in early twenty twenty six.

Bill Chaters, Analyst, Sable Capital: K. Okay. And then, you know, the Align results seemed great. Do you think there’s more upside to those? And and when do you think they would Align would reach its optimal potential?

Jim Lane, Interim Chief Executive Officer, Regis Corporation: Yeah. Good good question. You know, here here’s what I’ll say is we’re optimistic about the company, owned salon portfolio. You know, it’s also important to note that we’re in the very early stages of of of what I characterize as operational improvements. As I referenced in my remarks, the new stylist pay model, which is a really, really critical point, for for salons, that has all been launched.

And we’re also very near, launching several other pilots that are in support of the things I spoke to in your first question regarding forum three and the work we’re doing there, from an omnichannel standpoint. So I I I think that we’re it’s early. We’re optimistic. I like where we’re going. I like the leadership that we have in place there.

Very, very strong, tenured senior leader that’s driving that, that area. Myself having many years of running salons and the experience there, we’re staying very engaged with that, and and and I feel good about where we’re going.

Bill Chaters, Analyst, Sable Capital: Okay. And then, Kirsten did talk about, you know, uses of cash, and I just wanted to delve in that a little bit more. So I guess the first is to support the business because there are these new initiatives, and investing in the business has, you know, certain I return on investment. And then there’s other initiatives like paying down debt, or I think she alluded to maybe other acquisitions. And I just wanted to know a little more about those.

Would those be buying franchisees back from your current, you know, base, or would those be adjacent new concepts? I I just would like to understand the uses of cash the best you can, you know, elaborate on that.

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Yeah, Jim. I can I can jump in and take that? Yeah. I mean, we currently have $17,000,000 of cash on the balance sheet. You know, one of our priorities is continues to be a disciplined approach to managing our debt.

We do have scheduled debt payments and a cash flow sweep coming up, so so that will obviously be a portion of the use of that cash. But as I mentioned in my script, you know, we we do expect that we will generate cash in this year and really focused on reinvesting, you know, back into the business to drive growth and support all the initiatives that Jim spoke about. You know, I’ll say as it relates to potential strategic transactions, new concepts, acquisitions, You know, we we continue to keep that door open. We don’t have anything specific that we’re moving forward with at this time, but, you know, it’s something that we always have in the back of our heads as we look at the best allocation of our capital.

Bill Chaters, Analyst, Sable Capital: Okay. Great. And then I know you you have a a long runway on the present debt. I think it matures in 02/1929, June 2029, and the make whole ends in, I think, this a year from now, June ’26. Mhmm.

What what are your plans on on on refinancing that debt? Because I think right now it’s is it so for plus nine? And, I mean, with the improvement in cash flow, you’re looking, you know, closer to three times on a pro you know, on a on a perspective or or forward looking basis. What are your plans on on refinancing?

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Yeah. No. You you have all of that right. Our debt matures in June 2029. We have a make whole that that goes through 2026, and we’re paying sulfur plus 9% right now.

So, you know, we’re we’re having early discussions. TCW has been a great lender for us and a great business partner. You know, our goal would ultimately be to refinance this debt at some point and reduce our interest rate. This year, we’re gonna continue to focus on strengthening our financial position. So we’re, you know, we’re in a good spot to be able to have those conversations when the make whole runs out.

You know? So we’ll be focusing on everything that Jim talked about, driving comps, improving EBITDA, and, you know, building that case for better terms when we get to a point where we can refinance.

Bill Chaters, Analyst, Sable Capital: Okay. Well, I mean, looking at the company now a year after, you know, the the the the refinancing last year, I mean, you you guys have all done a great job. I mean, operationally, I think this has turned around a lot faster than than I thought it would. I mean, it’s great to be talking about what are you gonna use with the cash flow. Like, you actually have opportunities.

It’s just great. I don’t have any other questions. Thank you very much.

Kirsten Zupfer, Executive Vice President and Chief Financial Officer, Regis Corporation: Thanks, Phil. This concludes our fiscal year twenty twenty five earnings call. Thank you for your continued support and interest in Regis. We look forward to updating you on progress next quarter. Please feel free to reach out to investor relations at regis corp dot com to discuss any questions related to the business or quarterly results.

Have a nice day. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.