), the largest hair salon chain in the world, will unveil its
fourth quarter and fiscal 2012 results on Thursday, August 23,
2012. The current Zacks Consensus Estimate for the fourth quarter
is 31 cents per share, representing an annualized negative growth
of 16.2%. The current Zacks Consensus Estimate for 2012 is $1.21,
which also reflects a year-over-year negative growth of 3.94%.The
Zacks Consensus Estimate for revenues in the fourth quarter and
fiscal 2012 remains at $577 million and $2,281 million,
Over the trailing four quarters, Regis earnings surprise was in the
range from negative 3.7% to positive 33.3%, with an average of
positive 19.0%. This implies that the company has beaten the Zacks
Consensus Estimate by the same magnitude over the last four
Preliminary Fourth Quarter Results
Based in Edina, Regis reported fourth quarter 2012 revenues of
$568.0 million, down 4.0% year over year and 1.0% sequentially, in
a pre-earnings announcement.
Same-store sales (comps) for the fourth quarter fell 3.0% year over
year. The rate of decline was steeper than the year-ago drop of
1.7% but lower than the previous quarter's decrease of 3.4%,
indicating a persistent deterioration in the company's same-store
Service same-store sales fell 3.7% versus a decline of 1.7% in the
Retail same-store sales fell 0.5% versus a decline of 1.1% in
the fourth quarter of 2011, implying that the company has
experienced slow but improving traffic. However, the consolidated
hair restoration business remained bright with same-store sales
growth of 4.4% in the quarter versus 1.3% in the prior-year
REGIS CORP/MN (RGS): Free Stock Analysis Report
ULTA SALON COSM (ULTA): Free Stock Analysis
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Geographically, North America performed better than the
international market. Domestic same-store sales fell 3.3% year over
year, while international same-store sales even more by 6.6%. The
international trend was assuring as it showed a huge improvement
over the last quarter's decline of 10.6%.
The company's higher-priced, mall-based Regis Salon division
provided weaker results as compared to value salon concepts, which
were relatively better positioned owing to the price sensitivity of
consumers in the backdrop of the economic uncertainty. The
turbulent economy has persisted consumers to cut down expenditure
on expensive and discretionary items.
The analysts covered by Zacks expect Regis to post earnings of 31
cents per share for the fourth quarter of fiscal 2012, lower than
the prior-year earnings of 37 cents. Currently, the Zacks Consensus
Estimate ranges between 35 cents and 29 cents a share.
Estimates Revisions Trend
Estimates have not budged in the last 30 days, implying that the
analysts do not expect any meaningful surprises for the time being.
The current Zacks Consensus Estimate is pegged at $1.24 for 2013
(reflecting a year-over-year growth of 2.98%).
Agreement of Estimate Revisions
In the last 30 and 7 days, one out of the seven analysts covering
the stock, revised the estimate downwards for the fourth quarter of
2012, while none of the analysts moved in the opposite direction.
For fiscal 2012 and 2013, there has been no movement in the
earnings estimates over the last 30 and 7 days, implying the
absence of any meaningful catalyst to drive the estimates up or
Magnitude of Estimate Revisions
Over the last 30 days, the earnings estimates of 31 cents, $1.21
and $1.24 for the fourth quarter, fiscal 2012 and fiscal 2013,
respectively, remained static. This implies that the analysts
expect the company to report in line.
However, over the past 60 days, the estimates for the fourth
quarter, fiscal 2012 and fiscal 2013 have dipped from 33 cents,
$1.22 and $1.25, respectively.
Maintain Neutral Rating
We have a Neutral recommendation on Regis as the company continues
to spend on a host of initiatives, such as installation of the POS
system, and CRM system, "Regis Reignited" initiative, remodeling of
stores and marketing expenses to reinvigorate the brand and drive
traffic. In addition, we remain positive about Regis' stake sale in
Provalliance and the offload of one of its subsidiaries, Hair Club.
Both the deals will help the company to shift from its no-core
assets and focus solely on enhancing the salon experience.
Moreover, the company has a proven track record of achieving growth
through acquisitions and unit growth. Furthermore, impressive
balance sheet and cash position along with the enhancement of
shareholders' value augur well for Regis.
However, continuous sluggish same-store sales due to decline in
traffic, stemming from rising unemployment and uncertain economic
conditions and lingering risk from fashion changes, make us
cautious on the stock.
One of Regis primary competitors,
Ulta Salon, Cosmetics & Fragrance Inc.
) is slated to release its second quarter 2012 results on September