Regis (NASDAQ:RGS) reported higher adjusted EBITDA and substantially improved unrestricted operating cash flow for fiscal 2026, while outlining plans to build on Supercuts’ sales momentum, improve company-owned salon operations and address traffic and value challenges at SmartStyle.
Chief Executive Officer Susan Lintonsmith said the company completed fiscal 2026 with $224.5 million in revenue, $32.8 million in adjusted EBITDA and more than $13 million in cash from operations. Regis generated positive cash from operations for seven consecutive quarters during the year.
Fourth-Quarter Results Reflect Lower Franchise Revenue
Fourth-quarter revenue totaled $56 million, down $4.4 million, or 7.3%, from the prior-year period. The company attributed the decline primarily to lower non-margin franchise rental income as franchise salon count declined and certain franchisees transitioned to their own leases.
Operating income was $6.6 million, while consolidated adjusted EBITDA was $9.2 million, down $500,000 from $9.7 million a year earlier. The decrease reflected unfavorable foreign-currency translation adjustments and lower franchise revenue, according to the company.
Net income was $4.4 million, or $1.51 per diluted share, compared with $116.5 million, or $42.58 per diluted share, in the prior-year quarter. Regis said the prior-year comparison was heavily affected by a $115.5 million discrete tax benefit and a $1.9 million loss from discontinued operations, net of tax. Adjusted net income increased to $3 million from $2 million.
Adjusted general and administrative expense fell to $9.8 million from $10.4 million in the prior-year quarter. Franchise-segment adjusted EBITDA declined $1.3 million to $6.4 million, primarily because of lower royalties and fees tied to fewer salons. Company-owned salon adjusted EBITDA, meanwhile, rose $800,000 to $2.8 million, aided by lower rent and salon expenses following the closure of unprofitable locations.
Full-Year Profitability and Cash Generation Improve
For fiscal 2026, Regis reported revenue of $224.5 million, up $14.4 million from fiscal 2025. The increase was driven by higher company-owned salon revenue, partly offset by lower royalties, fees and franchise rental income.
Full-year operating income increased to $24.4 million from $19.9 million. Adjusted EBITDA rose to $32.8 million from $31.6 million, with the improvement attributed to a full year of company-owned salon revenue and lower G&A costs, partially offset by lower franchise revenue.
Net income was $6.9 million, or $2.41 per diluted share, compared with $123.5 million, or $46.10 per diluted share, a year earlier. The prior-year result included the $115.5 million tax benefit and $6.5 million of income from discontinued operations, net of tax. Adjusted net income rose to $7.8 million from $7.6 million, although adjusted diluted earnings per share declined to $2.70 from $2.85.
Unrestricted cash from operations more than doubled to $13.5 million from $5.4 million in fiscal 2025. Reported net cash provided by operating activities was $13.1 million, compared with $13.7 million a year earlier, a figure that includes restricted advertising-fund cash.
Regis used cash during the year to fund $2 million in capital investments and repay $2.7 million of term-loan principal. As of June 30, the company had $26 million in unrestricted cash and cash equivalents, more than 50% higher than a year earlier.
Debt Refinancing Remains a Priority
As of June 30, Regis had approximately $128 million in funded debt, including $116 million of term-loan principal, $11 million of paid-in-kind interest and about $1 million outstanding under its revolving credit facility. Net of cash, funded debt was approximately $102.2 million, or about 3.1 times adjusted EBITDA.
The company said it expects to make an annual excess cash flow sweep payment in September of approximately $7 million to $8 million, which would reduce both cash and debt. Regis reported $19 million of unused revolver availability and total liquidity of $35 million at year-end.
Lintonsmith said the board and management are actively evaluating refinancing alternatives. The company said it is seeking terms that lower its overall cost of debt and create meaningful shareholder value, but declined to discuss specific structures during the question-and-answer session. Regis also said it has more than $450 million in net operating losses.
Supercuts, Company-Owned Salons and SmartStyle Drive Fiscal 2027 Plan
Lintonsmith identified Supercuts as the company’s largest brand opportunity, representing nearly half of Regis’ salon base and 60% of its royalties. She said fiscal 2026 Supercuts growth was primarily driven by average ticket, though traffic trends improved and were down by only about one percentage point.
The company has begun implementing a Supercuts modernization plan focused on brand strategy, digital experience and operational execution. Regis launched a new marketing campaign in July, is testing online scheduling and is working to strengthen its loyalty program and customer relationship management capabilities.
Regis also hired a training and education leader to build stylist and manager curriculum, from onboarding through continuing education. Lintonsmith said the company is extending elements of the Supercuts blueprint to other core brands.
Company-owned salons delivered 4% same-store sales growth in fiscal 2026, primarily from pricing. Regis said traffic remains an opportunity and that it is pursuing stronger marketing, guest experience initiatives and a revised value proposition. The company also said it improved labor productivity during the fourth quarter through pay-plan adjustments and more disciplined scheduling.
At SmartStyle, Regis plans to focus on Walmart shoppers and associates through initiatives involving operating hours, staffing, training, promotional offers and potential express-service options.
- Regis closed 207 franchise salons and opened eight during fiscal 2026, for a net decline of 199 locations.
- The company said closed locations were predominantly lower-volume salons, with average unit volume of approximately $136,000.
- Regis does not expect fiscal 2027 closures to be materially different from fiscal 2026, though it expects fewer closures in company-owned locations.
The company said it is using additional franchise support resources, improved training and AI-powered dashboards to identify operating opportunities earlier. It is also seeking to accelerate resale activity by connecting franchisees looking to exit with qualified operators seeking growth opportunities, with the longer-term objective of reducing closures and returning to net unit growth.
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.
