Slump in sales takes Regis into the red

The company’s turnover for the quarter fell from $491.7m in the same period last year, to $466.5m, a result that was put down to the effects of a weakened economy on consumer spending patterns.

Likewise the company was also hit by a write-down of $27.8m during the quarter for its 30 percent ownership in Provaillance, the largest hair salon franchiser in Europe, a cost that was attributable to the big impact the European economy has had on the salon hair category.

Lower sales push the result into the red​

The impact of the sales and the added cost of the write-down meant that net profits fell from a positive figure of $23.0m in the same period last year, to register a loss of $4.5m for the current quarter.

“As a result of the difficult economy, we continue to see a frugal customer whose visitation patterns have lengthened. Accordingly this was the first time in the company’s 67-year history that we ended the year with negative same-store sales,”​ said Paul Finkelstein, company CEO.

For the full year 2009 the company recorded a turnover of $1.83bn, compared to $1.86bn in 2008, a fall of 1.6 percent. Net income for the year came in at a loss of $124.4m, compared to a profit of $85.2m in 2008.

Debt reduction is working​

However, despite the losses, the company underlined that it has been working towards reducing its debts, a focus that has allowed it to shave $172.5m off the total debt load in the past nine months to reduce the total figure to $643m.

The company re-affirmed its 2010 outlook, estimating same store sales to be in the range of negative 3.0 percent to positive 1.0 percent – an estimate that underlines the problem caused by a lack of visibility.

However, the company did also state that it envisaged its performance would gradually improve throughout fiscal 2010, with a slow first quarter likely to give way to positive sales growth by the end of the year.