Regis sales continue to be hit by economic downturn

By Simon Pitman

- Last updated on GMT

Related tags North america

Professional hair care provider Regis says it continues to be hard hit by the economic downtown as revenues for its fourth quarter fall by 5.6 percent.

Announcing its prelimary results, the company said that sales for the three months ending June 30 had fallen from $625m to $590m, a figure that underlined the continued trend for US consumers to shy away from hair salon visits.

"The beauty salon segment of retailing is still experiencing the lengthening of time between customer visits, and, as a result, fourth quarter same-store sales came in below our plan,"​ commented Paul Finkelstein, chairman and CEO.

Product sales in North America rise

However, whereas revenues for salon services slipped in North America during the comparable period, puchases of professional hair care products actually increased marginally, up from $97.16m to $97.99m.

"Our average ticket continues to increase and there is no empirical evidence of the customer trading down in service or product sales,"​ Finkelstein said.

The results showed that same-store revenues, a figure that underlines the comparable sales with stores that were open in the corresponding period in 2009, were down by 2.7 percent.

Beauty salon category still weak

The company claimed that the fourth quarter results were distorted by the fact that last year it completed the sale of Trade Secret retail product division to Premier Salons Beauty.

As part of the deal, Regis agreed to provide transititional business support to Premier Salons, which resulted in fourth quarter 2009 North American product revenues including sales to Premier at the company's cost.

Same stores sales down 3.1 percent for full fiscal year

Factoring the distortion of this transaction into the results, Regis claimed that fourth quarter 2010 sales revenues fell by an estimated 2.5 percent.

For the full fiscal year, the company's total consolidated same-store sales were down 3.1 percent, from $2.12bn, to $2.06bn

The company says that full fourth quarter 2010 earnings will be made available on August 26.

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