Regis Corporation (NASDAQ:RGS) Q1 2025 Earnings Conference Call November 6, 2024 8:30 AM ET

Company Participants

Kersten Zupfer - EVP and Chief Financial Officer
Matthew Doctor - President & Chief Executive Officer

Conference Call Participants

Kersten Zupfer

Good morning, and thank you for joining the Regis First Quarter 2025 Earnings Conference Call. I am your host, Kersten Zupfer, Executive Vice President and Chief Financial Officer. I am joined today by our President and Chief Executive Officer, Matthew Doctor. All participants are in a listen-only mode and 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 can be found on our website, www.regiscorp.com/investor-relations, along with a reconciliation of any non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures.

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

Matthew Doctor

Thank you, and good morning, everyone. On today's call, I will go over the financial highlights for the quarter and provide updates on our key initiatives.

Regarding our first quarter results, I'd say the headline here is our results reflect the stabilization of our business as we continue to put in the time, effort and investment required to position Regis for growth. Our adjusted results are largely in line with the prior year. And our GAAP financials came in slightly lower, driven by largely onetime expenses related to a severance accrual from the recent reorganization done in August as well as an outsized increase in stock-based compensation expense due to the movement in our stock price over the quarter.

Same-store sales in Q1 was down 1.1% versus the prior year's quarter. As I mentioned on prior calls, over the last few years, price has largely driven the sales comp gains. And it is the decade-plus traffic trends we are most focused on addressing, not through just marketing but operations as well. We will not be satisfied until we reverse these trends and drive profitable traffic back to our franchisee salons. We want to be extra cognizant of not relying on price much further, as we continue to work on solidifying our value proposition. Our adjusted EBITDA for the quarter was $7.6 million versus $8.1 million a year ago. The 40% adjusted EBITDA margins during the quarter represents a two percentage point margin expansion versus the prior year.