Regis announces share sale and big drop in Q4 results

By Simon Pitman

- Last updated on GMT

Related tags Salon hair care Stock Uk

The world’s leading salon hair care provider has announced a major public share offering on the same day that it announces disappointing Q4 sales.

The company said that during the period revenue from salons and hair restoration centers fell by 2.5 percent to $624.7m, compared to $640.5m in the corresponding period last year.

The figure meant that same store sales for the period fell by 4.0 percent, whereas fiscal 2009 same store sales fell by a total of 3.1 percent, reflecting stronger economic conditions at the start of the year.

Combined international and domestic sales for the full year fell by 2.1 percent, from $2.48bn to $2.43bn, a figure that largely reflected a disappointing performance from the company’s international sales, namely in the UK.

International sales a weak point

As a result of this, international same store sales fell by 6.6 percent in 2009 fiscal year, although they only represent around 10 percent of the total sales.

The company says that now it aims to close around 80 unprofitable salons in the UK, expecting to incur expenses of around $3.5m in the process.

When it announced its third quarter results the company had said that to tackle the falling profits it would review all of its company-owned locations worldwide with a view to pinpointing specific areas where cost savings can be made.

Share flotation to pay off debts

Reflecting the difficult times the company is currently going through and the strain the company’s poor performance is having on its debt load, it unveiled a big share flotation initiative.

The plans will see the company issue up to 13.2 million shares and up to $143.75m in convertible senior notes in an effort to pay $267m in outstanding debts.

Investors reacted negatively to the sale of the shares and the company’s financial results, with share price falling a dramatic 21 per cent at the close of trading on the New York Stock Exchange yesterday.

The company’s performance comes after years of top-end growth, when it rode a wave of high spending on salon hair care driven by robust economic growth.

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