Regis Earnings Preview

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Investors braced for a bumpy ride ahead of Regis' (NYS: RGS) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday, Jan. 30. Regis is engaged primarily in owning, operating and franchising hair and retail product salons.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Regis with six of 10 analysts rating it hold. Analysts don't like Regis as much as competitor Core-Mark Holding Company overall. Three out of three analysts rate Core-Mark Holding Company a buy compared to three of 10 for Regis. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $563.1 million in revenue this quarter. That would represent a decline of 2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.20 to $0.28.

What our community says:
CAPS All-Stars are in strong support of the stock, with 100% assigning it an "outperform" rating. The greater community agrees with the All-Stars, as 83.3% give it a rating of "outperform." Fools are bullish on Regis, though the message boards have been quiet lately with only 37 posts in the past 30 days. Despite the majority sentiment in favor of Regis, the stock has a middling CAPS rating of three out of five stars.

Management:
Now, a look at how efficient management has been at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The company's net margins have been decreasing year-over-year for the last four quarters. Net margins reflect what percentage of revenue becomes profit. See how Regis has been doing for the last four quarters: 

QuarterQ1Q4Q3Q2
Gross Margin46.2%45.9%45.2%45.4%
Operating Margin2.3%1.2%(10.2%)4.0%
Net Margin1.5%(2.8%)(4.4%)2.5%

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At the time this article was published The Motley Fool owns shares of Regis.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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