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, 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, 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 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].

Core Insights - Buying a franchise offers access to a well-known brand and support from the franchisor, which can lead to customer influx and operational efficiencies [1][2] - Franchise ownership involves ongoing fees and costs, which can limit financial control compared to non-franchised businesses [3][6] Franchise Performance - Regis, the owner of Supercuts, has closed at least 100 locations annually since 2020, with 443 closures reported in 2025 alone [4][8] - The number of closed Supercuts salons increased significantly from 102 in 2020 to 273 in 2021, with 156 closures in 2022 and 196 in 2023 [7] Structural Changes - As of September 30, 2023, the total number of franchised Supercuts salons decreased to 2,060 from 2,264, indicating a net loss of locations [7] - Regis is undergoing a structural shift towards an asset-light franchising model, consolidating and slimming down its brands [7] Customer Retention Strategies - Despite closures, Regis launched a loyalty program in 2024 across 1,900 salons, aiming to stabilize and retain its customer base [8]