Core Insights - The primary challenge for Regis remains traffic, which is impacting top-line performance despite pricing actions supporting same-store sales [1][6] - The company aims to deliver sustainable traffic improvements through tighter organizational alignment and increased focus on execution [1][3] Financial Performance - Adjusted EBITDA for the quarter was $8 million, an increase of $900,000 year over year, with year-to-date adjusted EBITDA at $16 million, up $1.2 million from the previous year [2] - Total revenue for the second quarter reached $57.1 million, a 22.3% increase from the prior year, largely due to the acquisition of approximately 300 salons from Align [7][13] - Operating income increased to $6.2 million, up from $5.5 million a year ago, attributed to higher contributions from company-owned salons and reduced general and administrative costs [16] Traffic and Sales - Consolidated same-store sales declined by 0.10%, while Supercuts experienced a growth of approximately 2% and company-owned salons rose by 4.3% [6][8] - The franchise base has seen a net decline of 374 locations since December 31, 2024, with management expecting similar closure rates in the second half of fiscal 2026 [5][14] Strategic Initiatives - The company is focusing on modernizing and transforming its brands, particularly Supercuts, with improvements in loyalty participation and digital engagement [9][10] - A new stylist pay plan was introduced to support a productivity-driven model, with early signs indicating better alignment with margin expectations [11][19] Cash and Liquidity - Regis reported $27.4 million in available liquidity, including $18.4 million in unrestricted cash, and has $126 million in outstanding debt [5][20] - The company generated $1.5 million of unrestricted cash from operations in the second quarter, with a year-to-date total of $3.9 million, showing significant improvement from the prior year [18] Future Outlook - Management is exploring refinancing options as the two-year anniversary of the current agreement approaches in June 2026, with initial conversations with potential partners already underway [21] - The board is evaluating options for the next CEO, with the interim CEO continuing to lead the organization in collaboration with the board [23]

Financial Data and Key Metrics Changes - For Q2 fiscal 2026, total revenue was $57.1 million, a 22.3% increase or $10.4 million compared to the prior year, primarily driven by increased revenue from company-owned salons due to the Align acquisition [11] - Adjusted EBITDA for Q2 was $8 million, an increase of $900,000 year-over-year, reflecting improved G&A discipline and contributions from the company-owned salon portfolio [2][14] - Consolidated same-store sales for the quarter declined modestly by 0.10%, while Supercuts delivered same-store sales growth of 2% year to date [2][3] Business Line Data and Key Metrics Changes - The company-owned salon segment reported sales growth of 4.3% for Q2, benefiting from the acquisition of Align salons [4] - Adjusted EBITDA for the franchise segment was $6.2 million, a decrease of $173,000 compared to the prior year, primarily due to lower royalties and non-cash fees [15] - Adjusted EBITDA for the company-owned salon segment improved by $1.1 million year-over-year to $1.8 million for the quarter [15] Market Data and Key Metrics Changes - The company experienced a net decrease of 374 franchise locations compared to the previous year, with closures primarily involving underperforming stores [11] - The gap in sales between the lowest-performing stores and the highest performers was approximately $350,000, indicating potential for profitability enhancement [12] Company Strategy and Development Direction - The company is focused on building a more durable and disciplined organization, emphasizing cash generation, financial performance, and long-term value creation [2] - Key priorities include reducing friction, increasing franchisee adoption and compliance, and demonstrating measurable improvements through targeted pilots [4] - The company is leveraging technology, including AI, to enhance operational efficiency and improve customer engagement [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic as a significant challenge impacting top-line performance, with a focus on sustainable traffic improvements as a central objective [3] - The company is encouraged by progress in profitability, cash generation, and organizational focus, which supports confidence in future growth [8] - Management remains committed to disciplined cost management and operational improvements to enhance cash generation and financial flexibility [17] Other Important Information - The company generated $1.5 million of unrestricted cash from operations in Q2 and $3.9 million year to date, reflecting improved cash management [3] - As of December 31, 2025, the company had $27.4 million of available liquidity and $18.4 million in unrestricted cash [18] Q&A Session Summary Question: What initiatives are in place to improve performance at Align stores? - Management highlighted three components: refinement of the pay plan, pricing adjustments, and labor optimization using AI to better align staffing with sales patterns [24][25][26] Question: Can you confirm the reduction in store closures compared to last fiscal year? - Management confirmed that closures are expected to be about 50% lower than the previous fiscal year, indicating improved performance [28][29] Question: What feedback is being received from potential replacement lenders regarding refinancing? - Management stated that initial conversations are ongoing, but specific rates or terms cannot be disclosed at this time [32] Question: What initiatives are being implemented to drive foot traffic? - Management discussed the importance of loyalty programs, customer acquisition strategies, and data analysis to improve customer retention and engagement [33][34] Question: Are there plans to add Cost Cutters locations, and why is loyalty adoption lagging in SmartStyle and Cost Cutters? - Management indicated that while there is no major push to add Cost Cutters locations, some are being converted from defunct businesses. Loyalty adoption is lagging due to a later start in implementation, but growth is being observed [35][36][37]

Financial Data and Key Metrics Changes - For Q2 Fiscal 2026, total revenue was $57.1 million, an increase of 22.3% or $10.4 million compared to the prior year, primarily driven by increased revenue from company-owned salons due to the Align acquisition [11] - Adjusted EBITDA for Q2 was $8 million, an increase of $900,000 year-over-year, reflecting improved G&A discipline and contributions from the company-owned salon portfolio [2][14] - GAAP operating income increased by 13% to $6.2 million compared to $5.5 million in the year-ago quarter, driven by contributions from company-owned salons and cost management [10][13] Business Line Data and Key Metrics Changes - Supercuts delivered same-store sales growth of 2% year-to-date, while consolidated same-store sales increased by 0.4% [3][4] - The company-owned salon segment reported adjusted EBITDA of $1.8 million for the quarter, an improvement of $1.1 million year-over-year, primarily due to the increase in the number of company-owned salons [15] - SmartStyle continues to face performance challenges, but the company is focused on stabilization and improvement [6] Market Data and Key Metrics Changes - The company experienced a net decrease of 374 franchise locations compared to the previous year, with closures primarily involving underperforming stores [11] - The gap between the lowest-performing stores and top performers was approximately $350,000, indicating potential for profitability enhancement [12] Company Strategy and Development Direction - The company is focused on building a more durable and disciplined Regis, emphasizing cash generation, financial performance, and long-term value creation [2] - Key priorities include reducing friction, increasing franchisee adoption and compliance, and demonstrating measurable improvements through targeted pilots [4][8] - The company is leveraging technology, including AI, to improve operational efficiency and enhance customer experience [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic as a significant challenge impacting top-line performance, with a focus on sustainable traffic improvements as a central objective [3][8] - The company is encouraged by progress in profitability, cash generation, and organizational focus, which supports confidence in future growth [8][21] Other Important Information - The company generated $3.9 million in cash from operations year-to-date, an improvement of $3.1 million compared to the prior year [16] - As of December 31, 2025, the company had $27.4 million in available liquidity and $18.4 million in unrestricted cash [18] Q&A Session Summary Question: What initiatives are in place to improve performance at Align stores? - Management highlighted three components: refinement of the pay plan, pricing adjustments, and labor optimization using AI to better align staffing with sales patterns [24][25][26] Question: Can you confirm the reduction in store closures compared to last fiscal year? - Management confirmed that closures are expected to be about 50% lower than the previous fiscal year [28][29] Question: What feedback is being received from potential replacement lenders regarding refinancing? - Management stated that initial conversations are ongoing, but specific rates cannot be disclosed at this time [32] Question: What initiatives are being implemented to address foot traffic goals? - Management emphasized the importance of loyalty programs, customer acquisition strategies, and data analysis to drive traffic and retention [33][34] Question: Are there plans to add Cost Cutters locations, and why is loyalty adoption lagging in SmartStyle and Cost Cutters? - Management indicated that while there is no major push to add Cost Cutters locations, some are being converted from defunct businesses. Loyalty adoption is lagging due to a later start in implementation [35][36][37]

Financial Data and Key Metrics Changes - For Q2 Fiscal 2026, the company reported total revenue of $57.1 million, a 22.3% increase or $10.4 million compared to the prior year, primarily driven by increased revenue from company-owned salons due to the Alline acquisition [11] - Adjusted EBITDA for the quarter was $8 million, an increase of $900,000 year-over-year, with year-to-date adjusted EBITDA of $16 million, up $1.2 million compared to the prior year [2][10] - GAAP operating income increased by 13% to $6.2 million, up from $5.5 million in the year-ago quarter, driven by contributions from company-owned salons and disciplined cost management [10][13] Business Line Data and Key Metrics Changes - Supercuts achieved same-store sales growth of 2% year-to-date, while consolidated same-store sales increased by 0.4% [3][4] - The company-owned salon segment reported sales growth of 4.3% for Q2, benefiting from the Alline acquisition [4] - Franchise segment adjusted EBITDA was $6.2 million, a decrease of $173,000 compared to the prior year, primarily due to lower royalties and non-cash fees [16] Market Data and Key Metrics Changes - The company experienced a net decrease of 374 franchise locations compared to the previous year, with closures primarily involving underperforming stores [11][12] - The gap in sales between underperforming stores and top-performing units was approximately $350,000, indicating potential for profitability enhancement [12] Company Strategy and Development Direction - The company is focused on building a more durable and disciplined organization, emphasizing cash generation and financial performance [2] - Key priorities include reducing friction, increasing franchisee adoption, and demonstrating measurable improvements through targeted pilots [4][8] - The company is leveraging technology, including AI, to enhance operational efficiency and improve customer engagement [6][7] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic as a significant challenge impacting top-line performance, with a focus on sustainable traffic improvements as a central objective [3][8] - The company is encouraged by progress in profitability and cash generation, which supports confidence in future growth [8][22] - Management is actively exploring refinancing options for existing debt, with a focus on reducing debt service as a top priority [22] Other Important Information - The company generated $1.5 million of unrestricted cash from operations in Q2 and $3.9 million year-to-date, reflecting improved cash management [3][17] - As of December 31, 2025, the company had $27.4 million in available liquidity, including $18.4 million in unrestricted cash [19] Q&A Session Summary Question: What initiatives are in place to improve performance at Alline stores? - Management highlighted three components: refinement of the pay plan, pricing adjustments, and labor optimization using AI to better align staffing with sales patterns [25][26][28] Question: Can you confirm the reduction in store closures compared to last fiscal year? - Management confirmed that closures are expected to be about 50% lower than the previous fiscal year, with approximately 100 closures anticipated [29][30][32] Question: What insights are being gained regarding foot traffic goals? - Management discussed the importance of loyalty programs and customer acquisition strategies, emphasizing the need for effective execution in driving traffic [36][37] Question: Are there plans to add Cost Cutters locations? - Management indicated that while there isn't a broad effort to add locations, some conversions are occurring where franchisees are repurposing old businesses [39] Question: Why is loyalty adoption lagging in SmartStyle and Cost Cutters? - Management noted that loyalty programs were implemented later in these brands but are seeing growth similar to initial adoption rates at Supercuts [40] Question: What is the status of the CEO search? - Management confirmed that the Board is actively evaluating options for the next CEO while the current interim CEO continues to lead the organization [41]

Financial Data and Key Metrics Changes - For Q2 fiscal 2026, the company reported total revenue of $57.1 million, a 22.3% increase or $10.4 million compared to the prior year, primarily driven by increased revenue from company-owned salons due to the Alline acquisition [12] - Adjusted EBITDA for Q2 was $8 million, an increase of $900,000 year-over-year, reflecting improved G&A discipline and contributions from the company-owned salon portfolio [2][15] - GAAP operating income increased by 13% to $6.2 million compared to $5.5 million in the year-ago quarter, driven by contributions from company-owned salons and cost management [11][13] Business Line Data and Key Metrics Changes - Supercuts achieved same-store sales growth of 2% year-to-date, while consolidated same-store sales increased by 0.4% [3][4] - The company-owned salon segment reported a sales growth of 4.3% for Q2, benefiting from the Alline acquisition [4] - Franchise segment adjusted EBITDA was $6.2 million, a decrease of $173,000 compared to the prior year, primarily due to lower royalties and non-cash fees [16] Market Data and Key Metrics Changes - The company experienced a net decrease of 374 franchise locations compared to the previous year, with closures primarily involving underperforming stores [12][13] - The gap in sales between underperforming stores and top-performing units was approximately $350,000, indicating potential for profitability enhancement [13] Company Strategy and Development Direction - The company is focused on building a more durable and disciplined organization, emphasizing cash generation, financial performance, and long-term value creation [2] - Key strategic priorities include stabilizing traffic, increasing franchisee adoption and compliance, and enhancing customer digital interaction through technology [4][9] - The company is leveraging AI for labor optimization and improving operational efficiency across its brands [8][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic as a significant challenge impacting top-line performance, with a focus on sustainable improvements [3][9] - The company is encouraged by progress in profitability, cash generation, and organizational focus, which supports confidence in future growth [9][22] - Management is actively exploring refinancing options for existing debt as part of their financial strategy [21] Other Important Information - The company generated $1.5 million of unrestricted cash from operations in Q2, reflecting improved cash management [3] - As of December 31, 2025, the company had $27.4 million in available liquidity, including $18.4 million in unrestricted cash [19][20] Q&A Session Summary Question: What initiatives are in place to improve performance at Alline stores? - Management highlighted three components: refinement of the pay plan, pricing adjustments, and labor optimization using AI to better align staffing with sales patterns [24][25][26] Question: Can you confirm the reduction in store closures compared to last fiscal year? - Management confirmed that closures are expected to be about 50% lower than the previous fiscal year, indicating a positive trend [29][30][32] Question: What insights are being gained from potential replacement lenders regarding refinancing? - Management stated that initial conversations are ongoing, but specific rates or terms cannot be disclosed at this time [35] Question: What strategies are being implemented to drive foot traffic and customer retention? - Management emphasized the importance of loyalty programs, customer acquisition strategies, and data analysis to enhance customer retention and engagement [36][37] Question: Are there plans to add Cost Cutters locations? - Management indicated that while there isn't a broad effort to add locations, some conversions from existing businesses are occurring [39][40] Question: Why is loyalty adoption lagging in SmartStyle and Cost Cutters? - Management noted that loyalty programs were implemented later in these brands, but growth is being observed [41][42]

Financial Data and Key Metrics Changes - For Q2 fiscal 2026, total revenue was $57.1 million, an increase of 22.3% or $10.4 million compared to the prior year, primarily driven by increased revenue from company-owned salons due to the Align acquisition [12] - Adjusted EBITDA was $8 million, an increase of $900,000 year-over-year, with year-to-date Adjusted EBITDA of $16 million up $1.2 million versus the prior year [2][11] - GAAP operating income increased by 13% to $6.2 million compared to $5.5 million in the year-ago quarter, driven by contributions from company-owned salons and cost management [11][13] Business Line Data and Key Metrics Changes - Supercuts delivered same-store sales growth of 2% year-to-date, while consolidated same-store sales increased by 0.4% [3][4] - The company-owned salon segment reported sales growth of 4.3% for Q2, benefiting from the acquisition of Align salons [4] - Adjusted EBITDA for the franchise segment was $6.2 million, a decrease of $173,000 compared to the prior year, primarily due to lower royalties and non-cash fees [15][16] Market Data and Key Metrics Changes - The company experienced a net decrease of 374 franchise locations compared to the previous year, with closures primarily involving underperforming stores [12] - The gap in sales between the lowest and highest performing stores was approximately $350,000, indicating potential for profitability enhancement [12] Company Strategy and Development Direction - The company is focused on building a more durable and disciplined organization, emphasizing cash generation and financial performance [2] - Key priorities include reducing friction, increasing franchisee adoption, and demonstrating measurable improvements through targeted pilots [4][9] - Technology and digital engagement are critical enablers of the strategy, with ongoing efforts to modernize customer interactions and enhance loyalty programs [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic as a significant challenge impacting top-line performance, with a focus on sustainable traffic improvements as a central objective [3][9] - The company is encouraged by progress in profitability and cash generation, with expectations for a meaningful increase in unrestricted cash from core operations in fiscal 2026 [18][21] - Management is actively exploring refinancing options for existing debt as they approach the two-year anniversary of their current agreement [21] Other Important Information - The company generated $1.5 million of unrestricted cash from operations in Q2 and $3.9 million year-to-date, reflecting improved cash management [3][17] - As of December 31, 2025, the company had $27.4 million of available liquidity and $18.4 million in unrestricted cash [19][20] Q&A Session Summary Question: What initiatives are in place to improve performance at Align stores? - Management highlighted three components: refinement of the pay plan, pricing adjustments, and labor optimization using AI to better align staffing with sales patterns [24][25][26] Question: Can you confirm the reduction in store closures compared to last fiscal year? - Management confirmed that closures are expected to be about 50% less than the previous fiscal year, indicating a positive trend [28][29] Question: What feedback is being received from potential lenders regarding refinancing? - Management stated that initial conversations are ongoing, but specific rates or terms cannot be disclosed at this time [32] Question: What measures are being taken to drive foot traffic? - Management discussed the importance of loyalty programs, customer acquisition strategies, and improving customer retention through various initiatives [33][34] Question: Are there plans to add Cost Cutters locations, and why is loyalty adoption lagging in SmartStyle and Cost Cutters? - Management indicated that while there is no major push to add Cost Cutters locations, some are being converted from defunct businesses. Loyalty adoption is lagging due to a later start in implementation, but growth is being observed [35][36]

Core Insights - Regis Corporation reported financial results for the second fiscal quarter ending December 31, 2025, highlighting improved execution and momentum in the haircare industry [1] Financial Performance - Same-store sales increased by 2.0% at Supercuts and 4.3% at company-owned salons, indicating positive growth in customer traffic and service demand [1] - Year-over-year improvements in operating performance were noted, reflecting the company's effective strategies and operational enhancements [1]

Company Operations - As of December 31, 2025, Regis Corporation operated 3,829 locations, including 3,551 franchised salons and 278 company-owned salons[109]. Financial Performance - System-wide revenue for the three months ended December 31, 2025, was $260.8 million, a decrease of 4.8% from $274.1 million in the same period of 2024[114]. - Total system-wide same-store sales decreased by 0.1% for the three months ended December 31, 2025, compared to a decrease of 1.6% in the same period of 2024[114]. - Company-owned salon revenue increased by $15.7 million, or 448.6%, from $3.5 million to $19.2 million for the three months ended December 31, 2025, due to the Alline acquisition[125]. - Franchise revenue decreased by $5.4 million and $11.8 million during the three and six months ended December 31, 2025, primarily due to a decrease in franchise salon count[141]. - Franchise adjusted EBITDA totaled $6.2 million and $12.6 million for the three and six months ended December 31, 2025, reflecting a decrease of $0.2 million and $1.8 million, respectively[142]. - Company-owned salon revenue increased by $15.7 million and $35.2 million during the three and six months ended December 31, 2025, primarily due to the Alline acquisition[145]. - Company-owned salon adjusted EBITDA improved by $1.1 million and $2.9 million for the three and six months ended December 31, 2025, respectively[146]. Expenses and Liabilities - Royalties decreased by $1.2 million, or 8.1%, during the three months ended December 31, 2025, primarily due to a decrease in franchise salon count[121]. - General and administrative expenses decreased by $0.9 million, or 8.0%, during the three months ended December 31, 2025, primarily due to lower broker fees and severance[126]. - Rent expense increased by $1.5 million, or 71.4%, during the three months ended December 31, 2025, due to expenses associated with salons from the Alline acquisition[127]. - Company-owned salon expenses increased by $11.8 million, or 621.1%, from $1.9 million to $13.7 million for the three months ended December 31, 2025, primarily due to the Alline acquisition[130]. - Depreciation and amortization increased by $0.3 million, or 60.0%, during the three months ended December 31, 2025, due to assets acquired in the Alline acquisition[131]. - Interest expense increased by $0.5 million and $0.8 million for the three and six months ended December 31, 2025, respectively, due to higher debt outstanding compared to the prior year[133]. - The company recognized a $1.0 million gain on earn-out liability related to the Alline acquisition during the six months ended December 31, 2025[134]. Cash Flow and Capitalization - As of December 31, 2025, cash and cash equivalents were $18.4 million, with $17.6 million in the United States and $0.8 million in Canada[151]. - Cash provided by operating activities was $3.9 million for the six months ended December 31, 2025, compared to $0.8 million in the prior year[155]. - The company's debt to capitalization ratio was 40.0% as of December 31, 2025, compared to 40.3% as of June 30, 2025[159]. - The company has $54.6 million remaining under the approved stock repurchase program as of December 31, 2025[160]. Market Risks and Strategic Considerations - The company is exposed to market risks from changes in interest rates and foreign currency exchange rates, with no material changes reported since the last annual report[164]. - Forward-looking statements reflect management's best judgment but are subject to numerous risks and uncertainties that could materially affect actual results[162]. - The company emphasizes the importance of maintaining satisfactory relationships with key partners, such as Walmart, to drive business success[162]. - There is a reliance on franchise royalties and the overall success of franchisees' salons, which are critical for revenue generation[162]. - The company faces challenges in attracting, training, and retaining talented stylists and salon leaders, impacting operational efficiency[162]. - Data security and privacy compliance are highlighted as significant concerns, particularly regarding the protection of sensitive information[162]. - The company is focused on implementing cost reduction initiatives to achieve expected cost savings and maintain competitiveness[162]. - The ability to generate sufficient cash flow to meet debt service obligations is a key financial consideration for the company[162]. - The company is currently undergoing a search for a new CEO, which is crucial for future leadership and strategic direction[162]. - Potential liabilities related to the employee retention credit received by Alline may pose financial risks[162].

Core Viewpoint - Regis Corporation, a leader in the haircare industry, will release its financial results for the second fiscal quarter on February 5, 2026, before market opening [1]. Group 1: Financial Results Announcement - The financial results will cover the period ended December 31, 2025 [1]. - A presentation via webcast for investors will follow the release, starting at 7:30 a.m. central time [1]. Group 2: Participation and Replay - Interested parties can register for the live webcast through the company's website [2]. - A replay of the presentation will be available later that day at the same website [2]. - Investors can submit questions in advance to be addressed during the earnings call [2]. Group 3: Company Overview - Regis Corporation operates 3,879 salon locations as of September 30, 2025, through franchising and corporate ownership [3]. - The company operates under various concepts, including Supercuts, SmartStyle, Cost Cutters, Roosters, and First Choice Haircutters [3]. - Additional information can be found in the Investor Relations section of the corporate website [3].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]