Regis Q3 Earnings Call Highlights
Regis (NASDAQ:RGS) reported higher profitability and positive cash flow in its fiscal third quarter of 2026, even as total revenue declined, as the salon franchisor pointed to cost controls, company-owned salon improvements and a sharper focus on its largest brands under new Chief Executive Officer Susan Lintonsmith.
Lintonsmith, who recently became CEO after serving on the company’s board since January 2025 and most recently as board chair, used her first earnings call in the role to outline a strategy aimed at moving Regis “from stability to growth.” She said the company’s priorities include accelerating growth at Supercuts, improving company-owned salons and addressing underperformance at SmartStyle.
“Our third quarter results reflect another quarter of strong execution, demonstrated by same-store sales growth, increasing profitability, and solid cash flow generation,” Lintonsmith said.
Same-store sales rise, led by Supercuts and company salons
Regis said consolidated same-store sales increased 2.6% in the third quarter. Supercuts same-store sales rose 5%, while company-owned salons posted a 9.6% increase. Lintonsmith said pricing actions, particularly in company-owned salons, supported the sales gains, though she emphasized that the company is focused on driving traffic over time.
Supercuts remains Regis’ flagship brand, representing nearly 50% of salons and more than 60% of royalties, according to Lintonsmith. Year to date, Supercuts same-store sales are up 3.2%. She cautioned that results may fluctuate during the brand’s transformation and said sustained improvement will depend on durable traffic gains.
Regis is advancing a Supercuts “North Star” transformation plan built around three pillars: evolving the brand strategy, modernizing the digital experience and improving operational excellence. Lintonsmith said the brand positioning work has been completed, including a new tagline, “Confidence Without Compromise.”
Profitability improves despite lower revenue
Chief Financial Officer Kersten Zupfer said total third-quarter revenue was $52.4 million, down 8.1%, or $4.6 million, from the prior-year period. She said the decline was primarily due to lower non-cash franchise fee recognition.
Despite the revenue decline, Regis reported GAAP operating income of $5.7 million, up from $5 million a year earlier. income from continuing operations rose to $735,000 from $250,000 in the prior-year quarter. Zupfer said the improvements were primarily driven by lower general and administrative expenses and increased company-owned salon contribution, partially offset by lower contribution from higher-margin royalty revenue.
Consolidated adjusted EBITDA was $7.7 million, up 8.5% from $7.1 million in the year-ago quarter. Year-to-date adjusted EBITDA was $23.6 million, up $1.7 million from the prior year. Adjusted G expense declined to $9.5 million from $10.2 million a year earlier.
Franchise segment adjusted EBITDA was $6.2 million, down slightly from $6.3 million in the prior-year quarter, due to lower royalties and non-cash franchise fees, partially offset by lower G costs. Franchise EBITDA as a percentage of franchise revenue improved to 18.7% from 16.5%.
Company-owned salon adjusted EBITDA improved by $600,000 year over year to $1.4 million, which the company attributed primarily to pricing and portfolio optimization initiatives.
Cash flow remains positive for sixth consecutive quarter
Regis generated $8.9 million in cash from operations for the first nine months of fiscal 2026, compared with $7 million in the prior-year period. Of that amount, $5.3 million was generated in the third quarter. Zupfer said it marked the company’s sixth consecutive quarter of positive cash from operations.
Zupfer distinguished between unrestricted operating cash and restricted advertising fund cash. For the first nine months of fiscal 2026, Regis generated $9.3 million in unrestricted cash from core operations, while using $400,000 in restricted advertising fund cash. She said the company continues to expect a meaningful increase in unrestricted cash generated from core operations for the full fiscal year compared with fiscal 2025.
The company also said it has deliberately accumulated a surplus in its advertising fund since fiscal 2025 by moderating spending while it focused on business transformation. Zupfer said new marketing creative is expected to be ready in the first quarter of fiscal 2027, when Regis plans to deploy accumulated advertising fund dollars to increase marketing efforts.
Salon closures moderate as company focuses on quality of system
Regis said franchise closures have moderated in fiscal 2026. During the first nine months of the fiscal year, the franchise location count declined by 150 locations, net of openings, or about 50 locations per quarter. Zupfer said the company expects the fourth-quarter net decline to be generally consistent with that recent pace.
That would represent an improvement from net franchise location declines of 414 in fiscal 2024 and 430 in fiscal 2025. Zupfer said many prior closures involved underperforming locations at the end of their lease life. As of March 31, 2026, the franchise location count was down 279 salons from a year earlier.
The closed locations had average unit volumes of approximately $130,000, about $350,000 below the average unit volume of stores in the company’s highest-performing quartile, Zupfer said.
CEO outlines growth priorities and refinancing focus
Lintonsmith said company-owned salons will serve as a “test and learn” platform for operating practices, loyalty tools and technology that could later be scaled across the system. Regis acquired roughly 300 salons from a large franchisee in December 2024, with the portfolio split roughly among Supercuts, Cost Cutters and Holiday Hair. She said company-owned salon sales growth in the quarter was primarily driven by pricing actions and execution, but traffic remains negative.
SmartStyle, Regis’ second-largest brand by royalty stream, remains a key turnaround focus. Lintonsmith said the brand has underperformed relative to the broader portfolio, and the company is working with franchisees on initiatives to improve traffic, guest retention and salon-level economics in its retail environment.
Regis is also evaluating technology upgrades, including enhancements to its point-of-sale ecosystem, web and mobile platforms, loyalty structure and AI-enabled tools for scheduling, salon-hour optimization and performance dashboards. Lintonsmith said AI initiatives will be piloted first in company-owned salons before any broader rollout.
On the balance sheet, Zupfer said Regis had $31.9 million of available liquidity as of March 31, 2026, including revolving credit capacity and $22.9 million in unrestricted cash and cash equivalents. Outstanding debt was $127.1 million, excluding deferred financing costs, the value of warrants and accrued paid-in-kind interest.
Management said reducing debt and improving financial flexibility remain priorities. Lintonsmith said the company is evaluating refinancing opportunities as it approaches the two-year anniversary of its credit agreement in late June, when it has the ability to refinance. During the question-and-answer session, Zupfer said the refinancing process is ongoing and that the company will provide updates when it has information to share.
About Regis (NASDAQ:RGS)
Regis (NASDAQ: RGS) is a company that owns, operates and franchises a portfolio of hair salon and beauty service brands. Its business centers on providing haircutting, styling, coloring and other salon services through both company-owned and franchised locations. The company's brand portfolio includes well-known names in the haircut and salon market that serve a range of customer segments from value-focused walk-in haircuts to full-service salon experiences.
Regis generates revenue through salon operations, franchise fees and the sale of professional hair-care products and retail items.
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