Q2 sales revenue falls by 4 percent for Regis

By Simon Pitman

- Last updated on GMT

Related tags Hair care Ceo paul finkelstein Revenue

Second quarter sales fell by 4 percent for hair care provider Regis, as the deconsolidation of its European franchise hit hard, further impacted by the economic climate.

Sales for the period fell from $682m in the corresponding quarter a year ago, to reach $655m for the current quarter.

The company said that the deconsolidation of its European franchise led to a $17m fall in revenues, while consolidated revenues for its operations decreased by a total of 1.6 percent.

Fewer salon trips means lower sales

As consumers appear to be making fewer trips to the hair salons, same store sales for the period fell by 5.4 percent, a figure that came in below the company’s original guidance of -1 per cent to +1 percent.

CEO Paul Finkelstein cited consumer cut backs as playing a major part in the disappointing results, underlining the fact that the consumer downturn had been even worse than initial expectations.

Although Finkelstein said he could not predict how long these conditions would last for the industry, he did state that the company is still expected to be operationally profitable in the second quarter and full financial year.

Quintessential replenishment business

“Our business is the quintessential replenishment business, and with nearly seventy percent of our business coming from services, we are well positioned for the long-term,”​ said Finkelstein.

On the other hand Regis, which is the largest player in the global hair care industry, derives over 30 percent of its sales from salon brand hair care products.

The company’s most dramatic losses came from its European operations, where it is particularly active in the UK market.

Outside the US, same store sales for the retail category fell by 7.6 percent, where as salon service sales fell by 12.3 percent – a performance underlining the fact that consumers are paying fewer visits for hair treatments and cuts.

The company says it will announce full second quarter earnings results on January 28.

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