On Mar 13, 2014, Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Regis Corp. witnessed sharp downward estimate revisions after
reporting disappointing fiscal second-quarter 2014 results.
Shares of this hairstyling and hair-care salons operator and
franchisor have been on a downtrend since the beginning of
January and given its expected negative earnings growth rates in
the upcoming quarters, it has more downside left.
On Jan 27, Regis reported fiscal second-quarter adjusted loss of
4 cents per share which compared unfavorably with the Zacks
Consensus Estimate of earnings of a penny. It was the company's
fifth earnings miss in the last six quarters.
Earnings were affected by lower-than-expected revenues which
declined 7.5% year over year and also missed the Zacks Consensus
Estimate by 2.5%. Additionally, 6.2% drop in consolidated comps
was also a headwind for the company. Further, rising cost of
service as a percent of service revenues (up 160 bps), due to
negative service comps and higher healthcare costs added to the
Not surprisingly, analysts continued to revise their earnings
estimates significantly lower for Regis. Therefore, the Zacks
Consensus Estimate for fiscal 2014 was revised to a loss of a
penny per share from earnings of 16 cents per share over the last
60 days. For 2015, the Zacks Consensus Estimate nosedived 34.2%
over the same time frame.
Other Stocks That Warrant a Look
A better-ranked stock in the same industry is
Barnes & Noble, Inc.
), sporting a Zacks Rank #1 (Strong Buy). In the broader
retail-wholesale sector, stocks performing well currently and
worth considering are
The Wendy's Co.
). Both the stocks have the same Zacks Rank as Barnes &
BARNES & NOBLE (BKS): Free Stock Analysis
REGIS CORP/MN (RGS): Free Stock Analysis
WENDYS CO/THE (WEN): Free Stock Analysis
ZALE CORP NEW (ZLC): Free Stock Analysis
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