Regis Corporation (NASDAQ:RGS) Q2 2024 Earnings Conference Call January 31, 2024 8:30 AM ET

Company Participants

Biz McShane - VP, Corporate Controller

Matthew Doctor - President and CEO

Kersten Zupfer - EVP and CFO

Conference Call Participants

Biz McShane

Good morning, and thank you for joining the Regis Second Quarter Fiscal 2024 Earnings Conference Call. I'm your host Biz McShane, Vice President, Corporate Controller.

All participants are in listen-only mode. The prepared remarks by our President and Chief Executive Officer, Matthew Doctor and Executive Vice President and Chief Financial Officer, Kersten Zupfer are accompanied by slides to help participants follow along. As a reminder, this conference is being recorded.

I would like to remind everyone that the language on forward-looking statements included in our earnings release, and 8-K filing also apply to our comments made on the call today. These documents along with their presentation today can be found on our website, www.regiscorp.com/investorrelations, along with reconciliation of any non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures.

Today's slides are located in the investor presentations and supplemental financial statements section of the investor site.

With that, I will now turn the call over to Matt.

Matthew Doctor

Thank you, Biz. And good morning, everyone. On today's call, I will discuss our Q2 fiscal 2024 results and share my observations about the progress we have made to stabilize Regis over the past 2 years as well as our ongoing work to reaccelerate growth and drive value for all of our stakeholders.

Jumping right into our results for the quarter and first half of the year. Same-store sales rose 1.9% in the quarter and 1.8% year-to-date. Now while we ended the quarter 1.9% above last year, we saw a progression in comparable sales throughout the quarter with October being a bit more challenging coming in roughly flat year-over-year. Well, in the month of December, we were up 4.5% versus December of 2022.

And from a sales perspective, we're seeing notable disparity between our top and bottom quartile salons, and this is really driving the overall sales comp. We are really seeing some bright spots in those top quartile salons across all of our brands as they have collectively demonstrated approximately 6% same-store sales for the quarter with positive traffic comps.

Adjusted Q2 EBITDA on a consolidated basis was $6 million compared to $7.8 million in the prior year's quarter. Part of that gap between this quarter and Q2 fiscal 2023 is due to the onetime $1.1 million received from the state of North Carolina, with the remaining due to our lower salon count driving lower revenues and timing of expenses. For the first half of fiscal 2024, our adjusted EBITDA of $13.5 million is a $1.8 million improvement versus the first half fiscal 2023 adjusted EBITDA of $11.7 million.