Regis Reports $24.4M Operating Income Amid Franchise Revenue Decline
Regis Corporation (NASDAQ:RGS) reported fiscal year 2026 revenue of $224.5 million, up from $210.1 million in the prior year, with operating income rising to $24.4 million compared to $19.9 million. The growth was driven by an increase in company-owned salon revenue rather than franchise performance. Franchise revenue fell 12.1% to $146.2 million due to declines in royalties and fees, while the number of franchise salons dropped by 199 units. Company-owned revenue increased significantly to $78.3 million from acquisitions like Alline Salon Group, helping offset franchise weakness for the year. Company-owned same-store sales rose 4%, reversing a prior decline, and Adjusted EBITDA improved to $7.6 million with an enhanced margin of 9.7%. However, challenges remain as company-owned salons represent only 7.1% of total locations but contribute nearly 35% of revenue. Franchise performance continued to deteriorate beyond rental income declines; royalty and fee revenues also dropped significantly. Management is evaluating refinancing options due to high interest expenses nearing operating income levels, which could impact future equity valuations.
Tickers: $RGS
Topics: company-owned_growth franchise_performance operating_income