Regis posts Q3 profit, beats Wall St. expectations

Minneapolis Hair salon chain Regis Corp. said Wednesday that profits rose to $21.0 million for the fiscal third quarter ended March 31, compared with $19.1 million for the same period a year ago. Lower operating expenses contributed to the chain’s profits, and helped the company exceed Wall Street estimates.

Revenues decreased 2.4% to $604 million, compared with $619 million in last year’s third quarter. The company blamed this decline on the deconsolidation of its European franchise salon operations, a factor that reduced revenue in the quarter by approximately $5 million. Third quarter same-store sales also declined 4.5%.

Even with these declines, “We are on or ahead of plan with all of our debt-reduction and cost-saving initiatives,” said Paul D. Finkelstein, chairman and CEO. “Our organization is focused on our near-term strategy of strengthening our balance sheet, significantly reducing expenditures in salon unit growth, reducing debt levels and controlling expenses.”

The company declined to share a fourth quarter or fiscal 2010 earnings guidance due to the unpredictability of the economy. Finkelstein did report that same-store sales could range from negative 3% to positive 1%.

At the end of the quarter, the chain operated 12,854 locations worldwide.