Regis Beats Estimates, Stinks It Up Anyway

Seth Jayson, The Motley Fool
Updated

Regis (NYS: RGS) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Regis met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly, and earnings per share contracted to a loss.

Gross margins improved, operating margins dropped, net margins contracted.

Revenue details
Regis reported revenue of $563.3 million. The seven analysts polled by S&P Capital IQ predicted revenue of $567.5 million. Sales were 1.9% lower than the prior-year quarter's $574.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.32. The nine earnings estimates compiled by S&P Capital IQ anticipated $0.23 per share on the same basis. GAAP EPS were -$1.01 for Q2 compared to $0.24 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 37.1%, 50 basis points better than the prior-year quarter. Operating margin was 3.0%, 100 basis points worse than the prior-year quarter. Net margin was -10.2%, 1,270 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $576.9 million. On the bottom line, the average EPS estimate is $0.27.

Next year's average estimate for revenue is $2.30 billion. The average EPS estimate is $1.15.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Regis is hold, with an average price target of $17.83.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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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