Why Regis Stock Collapsed 20% on Aug. 31
Shares of hair salon operator and franchiser Regis (NYSE: RGS) fell as much as 20% in morning trading on Aug. 31. By 2 p.m. EDT, the shares had bounced off their lows of the day but were still lower by a painful 18% or so. The culprit was the company's full-year fiscal 2020 earnings announcement.
It's difficult to paint a positive picture here. Regis' revenue fell roughly 25% in fiscal 2020, with earnings plunging deeper into the red, going from a loss of $0.48 per share in fiscal 2019 to a loss of $4.79 in the recently ended year. Fiscal fourth-quarter results were even worse. Revenue dropped 74% year over year in the quarter, with earnings declining from a loss of $0.14 per share to a loss of $2.05. The company tried to highlight the positives, notably that it had increased franchise relationships to 76% of its salon portfolio from 56% at the end of fiscal 2019. This furthers its move toward an asset-light model, but the financial results highlight the bigger picture today.
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Source Fool.com
