Regis hit by charges for beauty school merger
back of significant charges relating to the merger of its beauty
school division, announced last week.
The company said that charges relating to the merger were $19.6m, pushing net income for the third quarter down from $18.6m in the corresponding quarter last year, to $5.3m.
However, the underlying trend looked healthier for the company, with quarterly revenue increasing 8 per cent to $655m, a figure that was first announced earlier this week.
"We are encouraged by the continued signs of recovery in our service business and are entirely focused on service, product and overhead initiatives that will enable us to achieve our long-term earnings growth objectives," said Paul Finkelstein, chairman and chief executive officer of Regis Corporation.
He added his belief that the company had found the right partner in appointing Empire Education Group to manage its beauty school business, which was also likely to contribute positively to the company's future performance and eventually cover the charge for the transaction.
The company, which owns the Vidal Sassoon, Supercuts and Jean Louis David hair care and beauty chains, said that the number of its location worldwide increased by 60 units to reach 11,773 during the quarter.
It also said that it constructed 123 units and franchisees built 53 salons as well acquiring 45 locations and relocating 124 corporate and franchise salons during the quarter.
The company added that for the fiscal 2007 its outlook remained the same, based on the performance in its third quarter, with consolidated revenue for the fourth quarter, ending June 30, set to grow 4 - 6 per cent, in the range of $663m to $675m.
On the back of the performance in 2007, the company believes that consolidated revenue for the financial year 2008 is forecasted to grow to approximately $2.64 billion, an increase of one percent.
