Regis ups profits following price increases

By Simon Pitman

- Last updated on GMT

Related tags Economics

Salon hair care specialist Regis says it managed to increase market expectations for its fourth quarter results on the back of increased service prices and same store sales.

The company said that sales revenues grew by 5 percent internationally to $709.0m, despite the impact of the deconsolidation of its European salon beauty schools, which impacted the result by more than $30m.

The company, which operates the Vidal Sassoon and Supercuts salon chains, said that if it had not been for the impact of this, the sales would have grown by more than 10 percent.

Net income falls

Net income fell slightly, from $27.9m in the corresponding quarter last year, to $23.1m, a result that still managed to beat financial market expectations.

When polled, market analysts had on average expected sales of $708.7m, according to Reuters Estimates.

The company said it was encouraged by the results, given the current economic conditions and the fact that it has been going through a period of upheaval and significant restructuring.

As part of this restructuring, the company also underlined that it planned to close down a further 160 underperforming salons, an announcement it first made in July.

Retail business continues to grow

“Our retail business remains a challenge and will continue to have issues for a year or two,”​ said Paul Finkelstein, Regis CEO.

Finkelstein chose to underline the performance of the company's same-store service sales, stressing that these were a barometer to the health of the business, while pointing out that in the third and fourth quarter sales were the strongest in eight years.

Given these results Finkelstein described himself as being more ‘bullish’ over the company’s outlook than he had been in the past four years.

However, further to this, Finkelstein did also add that his optimism was somewhat ‘moderated by the current state of the economy which is adversely impacting consumer related business.

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