Regis September-quarter earnings fall to $0.5M
The credit agreement matures on June 24, 2029; Regis reported 1,590 employees as of September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Regis Corporation reported $54.3 million in revenue for the three months ended September 30, 2026, versus $59.0 million a year earlier, and net income of $0.5 million versus $1.4 million. Operating income was $5.3 million, compared with $5.9 million.
System-wide same-store sales were up 0.2%, compared with 0.9%; franchise salons were up 0.3%, while company-owned salon same-store sales were down 1.1%, versus 1.7% growth a year earlier. Regis had 3,419 franchise salons and 259 company-owned salons as of September 30, 2026. Operating cash flow was $2.6 million versus $2.3 million. Regis paid $7.3 million toward term debt as the annual prepayment of 75% of excess cash flow.
Cash and cash equivalents were $20.8 million, and agreement-defined total liquidity was $30.4 million as of September 30, 2026. Regis recorded a $2.5 million accrual related to a DOJ civil investigative demand under the False Claims Act concerning PPP loan applications and loan forgiveness obtained by Alline before Regis acquired it. Regis said it was cooperating, had received no formal demand to return the proceeds, and was unaware of a formal claim or lawsuit against it.
1 point · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointOperating cash flow was $2.6 million, versus $2.3 million year over year.
Negative
- Moderate pointRevenue was $54.3 million, compared with $59.0 million a year earlier.
- Moderate pointNet income was $0.5 million, versus $1.4 million in the prior-year quarter.
Filing Explained
As of September 30, 2026, the lifetime benefit liability was gone after a $2.1 million gain, while $24,614 thousand in net rent commitments remained.
This unaudited Form 10-Q reports the quarter ended
The company recognized a
As of
Key Figures
Revenue: $54.3 million
Net income: $0.5 million
Net cash provided by operating activities: $2.6 million
+5 more
8 metrics
Revenue
$54.3 million
Three months ended September 30, 2026; $59.0 million in 2025
Net income
$0.5 million
Three months ended September 30, 2026; $1.4 million in 2025
Net cash provided by operating activities
$2.6 million
Three months ended September 30, 2026; $2.3 million in 2025
System-wide same-store sales
0.2%
Three months ended September 30, 2026; 0.9% in 2025
Cash and cash equivalents
$20.8 million
As of September 30, 2026
Total liquidity per the credit agreement
$30.4 million
As of September 30, 2026
Unused available credit under revolving credit facility
$19.6 million
As of September 30, 2026
Accrual related to DOJ inquiry
$2.5 million
Related to the inquiry concerning Alline's PPP loan
Key Terms
System-wide same-store sales, Paid-in-kind (PIK) interest, Minimum liquidity covenant, Level 3 input
4 terms
System-wide same-store sales financial
"System-wide same-store sales are calculated as the total change in sales"
A measure of sales growth that compares revenue from all locations in a company’s operating system that were open during both the current and prior comparison periods, excluding new or closed outlets. It shows how much existing stores or franchises are selling now versus before, isolating organic demand changes rather than growth from opening new sites — like comparing the yield of the same trees in an orchard year to year. Investors use it to gauge underlying business momentum and store-level performance across the whole system.
Paid-in-kind (PIK) interest financial
"4.50% of the margin as paid-in-kind (PIK) interest"
Minimum liquidity covenant financial
"a $10.0 million minimum liquidity covenant"
A minimum liquidity covenant is a clause in a loan or bond agreement that requires the borrower to keep a certain amount of cash or easily sold assets on hand, like an agreed emergency fund. It matters to investors because it protects lenders and other creditors by reducing the chance of missed payments; falling below the required level can trigger penalties, default, or demands for extra collateral, which can affect a company’s borrowing costs and equity value.
Level 3 input financial
"utilizing the Monte Carlo simulation, which is a Level 3 input"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was RGS's revenue in the September 2026 quarter?
RGS reported $54.3 million in total revenue for the three months ended September 30, 2026, compared with $59.0 million in the same quarter of 2025. Company-owned salon revenue was $18.9 million, while franchise rental income was $15.0 million.
How much net income did RGS report, and what was diluted EPS?
RGS reported $0.5 million in net income for the three months ended September 30, 2026, compared with $1.4 million a year earlier. Diluted net income per share was $0.18, compared with $0.49 in the prior-year quarter.
How did RGS same-store sales perform in the September 2026 quarter?
System-wide same-store sales were up 0.2%, compared with 0.9% in the prior-year quarter. Franchise same-store sales were up 0.3%, compared with 0.9%; company-owned salon same-store sales were down 1.1%, compared with 1.7% growth.
When does RGS's credit agreement mature, and how much revolving credit was available?
The term loan and revolving credit facility mature on June 24, 2029. As of September 30, 2026, unused available credit under the revolving facility was $19.6 million, and the agreement included a $10.0 million minimum liquidity covenant.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from to | |||||
Commission file number 1-12725
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
( | ||||||||||||||
| (Registrant's telephone number, including area code) | ||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading symbol | Name of exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
| ☒ | Smaller reporting company | |||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act): Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of October 31, 2026: 2,518,901
REGIS CORPORATION
INDEX
Part I. | Financial Information | ||||||||||
Item 1. | Financial Statements (Unaudited): | ||||||||||
Condensed Consolidated Balance Sheets as of September 30, 2026, and June 30, 2026 | 3 | ||||||||||
Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2026, and 2025 | 4 | ||||||||||
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended September 30, 2026, and 2025 | 5 | ||||||||||
Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended September 30, 2026, and 2025 | 6 | ||||||||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2026, and 2025 | 7 | ||||||||||
Notes to Condensed Consolidated Financial Statements | 8 | ||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 30 | |||||||||
Item 4. | Controls and Procedures | 30 | |||||||||
Part II. | Other Information | 31 | |||||||||
Item 1. | Legal Proceedings | 31 | |||||||||
Item 1A. | Risk Factors | 31 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 31 | |||||||||
Item 5. | Other Information | 31 | |||||||||
Item 6. | Exhibits | 32 | |||||||||
Signatures | 33 | ||||||||||
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
REGIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
As of September 30, 2026, and June 30, 2026
(Dollars in thousands, except per share data)
| September 30, 2026 | June 30, 2026 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
Cash and cash equivalents (Note 6) | $ | $ | ||||||||||||
| Receivables, net | ||||||||||||||
| Inventory | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
Goodwill (Note 1) | ||||||||||||||
| Other intangibles, net | ||||||||||||||
Right of use asset (Note 7) | ||||||||||||||
Deferred tax asset (Note 4) | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued expenses | ||||||||||||||
Long-term debt, current portion (Note 8) | ||||||||||||||
Short-term lease liability (Note 7) | ||||||||||||||
| Total current liabilities | ||||||||||||||
Long-term debt, net (Note 8) | ||||||||||||||
Long-term lease liability (Note 7) | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Shareholders' equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Retained earnings | ||||||||||||||
| Total shareholders' equity | ||||||||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
3
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended September 30, 2026, and 2025
(Dollars and shares in thousands, except per share amounts)
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Royalties | $ | $ | ||||||||||||||||||||||||
| Fees | ||||||||||||||||||||||||||
| Advertising fund contributions | ||||||||||||||||||||||||||
Franchise rental income (Note 7) | ||||||||||||||||||||||||||
| Company-owned salon revenue | ||||||||||||||||||||||||||
| Total revenue | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
Rent (Note 7) | ||||||||||||||||||||||||||
| Advertising fund expense | ||||||||||||||||||||||||||
| Franchise rent expense | ||||||||||||||||||||||||||
| Company-owned salon expense (1) | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||
| Gain on earn-out liability | ||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||
| Income from operations before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ( | ( | ||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
| Net income per share: | ||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||
| Net income per share | $ | $ | ||||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||
| Net income per share, diluted | $ | $ | ||||||||||||||||||||||||
| Weighted average common and common equivalent shares outstanding (Note 10): | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Includes cost of services and products sold to guests in our company-owned salons. Excludes general and administrative expense, rent, and depreciation and amortization related to company-owned salons .
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
4
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
For the Three Months Ended September 30, 2026, and 2025
(Dollars in thousands)
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
| Comprehensive income | $ | $ | ||||||||||||||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
5
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
For the Three Months Ended September 30, 2026, and 2025
(Dollars in thousands)
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net restricted stock activity | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net restricted stock activity | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
| Common stock issued in connection with warrant exercise | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
6
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended September 30, 2026, and 2025
(Dollars in thousands)
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows provided by (used in) operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Deferred income taxes | ( | |||||||||||||
| Gain on deferred compensation adjustment | ( | |||||||||||||
| Non-cash interest | ||||||||||||||
| Gain on earn-out liability | ( | |||||||||||||
| Stock-based compensation | ||||||||||||||
| Amortization of debt discount and financing costs | ||||||||||||||
| Other non-cash items affecting earnings | ( | |||||||||||||
| Ad fund | ( | |||||||||||||
| Changes in operating assets and liabilities (1) | ( | |||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows used in investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows (used in) provided by financing activities: | ||||||||||||||
| Repayments of revolving credit facility | ( | |||||||||||||
| Repayments of long-term debt | ( | ( | ||||||||||||
| Debt refinancing fees | ( | |||||||||||||
| Proceeds from issuance of common stock in connection with warrant exercise | ||||||||||||||
| Proceeds from issuance of common stock for options exercised | ||||||||||||||
| Taxes paid for shares withheld | ( | |||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||||||||||
| (Decrease) increase in cash, cash equivalents, and restricted cash | ( | |||||||||||||
| Cash, cash equivalents, and restricted cash: | ||||||||||||||
| Beginning of period | ||||||||||||||
| End of period | $ | $ | ||||||||||||
_______________________________________________________________________________
(1)Changes in operating assets and liabilities exclude ad fund and assets and liabilities sold or acquired.
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
7
REGIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The unaudited Condensed Consolidated Financial Statements of Regis Corporation (the Company) as of September 30, 2026, and for the three months ended September 30, 2026, and 2025, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of September 30, 2026, and its consolidated results of operations, comprehensive income, shareholders' equity and cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year.
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended June 30, 2026, and other documents filed or furnished to the SEC during the current fiscal year.
Goodwill:
As of both September 30, 2026, and June 30, 2026, the franchise reporting unit had goodwill of $172.4 10.3
Recently Issued Accounting Standards Not Yet Adopted:
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses," which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements and disclosures.
8
2. REVENUE RECOGNITION:
Revenue Recognition and Deferred Revenue:
Revenue recognized over time
Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenues are billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Condensed Consolidated Statements of Operations. The treatment increases both the gross amount of reported revenue and expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opens and typically recognized over ten years but is evaluated for immediate revenue recognition when a salon is acquired by Regis or closed. Franchise rental income is a result of the Company signing leases on behalf of franchisees and entering into sublease arrangements with the franchisees. The Company recognizes franchise rental income and expense when it is due to the landlord.
Revenue recognized at point of sale
Information about receivables, broker fees, and deferred revenue subject to the revenue recognition guidance is as follows:
| September 30, 2026 | June 30, 2026 | Balance Sheet Classification | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Receivables from contracts with customers, net | $ | $ | Receivables, net | |||||||||||||||||
| Broker fees | Other assets | |||||||||||||||||||
| Deferred revenue: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Gift card liability | $ | $ | Accrued expenses | |||||||||||||||||
| Deferred franchise fees open salons | Accrued expenses | |||||||||||||||||||
| Total current deferred revenue | $ | $ | ||||||||||||||||||
| Non-current | ||||||||||||||||||||
| Deferred franchise fees unopened salons | $ | $ | Other non-current liabilities | |||||||||||||||||
| Deferred franchise fees open salons | Other non-current liabilities | |||||||||||||||||||
| Total non-current deferred revenue | $ | $ | ||||||||||||||||||
9
Receivables relate primarily to payments due for royalties, advertising fees, rent, and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected credit losses (i.e., doubtful accounts), related to receivables from franchisees. Management estimates the allowance based on the age of the receivable and creditworthiness of the franchisee. The following table is a rollforward of the allowance for credit losses for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Provision for doubtful accounts (1) | ||||||||||||||
| Provision for franchisee rent (2) | ( | |||||||||||||
| Recoveries | ( | ( | ||||||||||||
| Other | ( | |||||||||||||
| Write-offs | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
________________________________________________________________________________________
(1)The provision for doubtful accounts is recognized as general and administrative expense in the Condensed Consolidated Statements of Operations.
(2)The provision for franchisee rent is recognized as rent in the Condensed Consolidated Statements of Operations.
Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement, capitalized, and expensed over the term of the franchise agreement as general and administrative expense in the Condensed Consolidated Statements of Operations. The following table is a rollforward of the broker fee balance for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Amortization | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement but are evaluated for immediate revenue recognition when a salon is acquired by Regis or closed. Franchise fee revenue for the three months ended September 30, 2026, and 2025, was $0.8 million and $1.0 million, respectively. Estimated revenue expected to be recognized in the future related to deferred franchise fees for open salons as of September 30, 2026, is as follows (Dollars in thousands):
Remainder of fiscal year 2027 | $ | |||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
10
3. SHAREHOLDERS' EQUITY:
Authorized Shares and Designation of Preferred Class:
The Company has 5.0 million shares of capital stock authorized, par value $0.05 , of which all outstanding shares, and shares available under the Stock Option Plans, have been designated as common stock.
Stock-Based Employee Compensation:
During the three months ended September 30, 2026, and 2025, the Company granted restricted stock units as follows:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Restricted stock units (RSUs) | ||||||||||||||||||||||||||
The RSUs granted during the three months ended September 30, 2025, vest after one year or in equal amounts over a three-year period subsequent to the grant date. RSUs granted to non-employee directors generally vest on the earlier of the first anniversary of the grant date or the next annual shareholders' meeting following the grant date and distributions are deferred until the director's board service ends.
Total compensation cost for stock-based payment arrangements totaling $0.4 million and $0.6 million for the three months ended September 30, 2026, and 2025, respectively, was recorded within general and administrative on the Condensed Consolidated Statements of Operations.
Stock Warrants Issued in Connection with Long-Term Debt:
In connection with the 2024 Credit Agreement (as defined in Note 8 to the unaudited Condensed Consolidated Financial Statements), the Company issued detachable warrants to affiliates of TCW Asset Management Company, LLC, and Asilia Investments. Pursuant to the warrants, the holders can purchase up to an aggregate 407,542 shares of Common Stock of the Company, par value $0.05 per share (Common Stock), at an exercise price equal to $7.00 per share.
In December 2024, the Company amended the 2024 Credit Agreement. The Company issued additional warrants to affiliates of TCW Asset Management Company, LLC, and Asilia Investments. In connection with this amendment, the warrant holders can purchase up to an aggregate 64,372 shares of Common Stock, at an exercise price equal to $23.86 per share. The warrants issued in connection with the 2024 Credit Agreement and the amendment thereto are exercisable for a seven-year period beginning June 24, 2024, and December 19, 2024, respectively. The warrants may also be exercised on a cashless basis if, at the time of exercise, there is no effective registration statement registering, or the prospectus therein is not available for, the issuance of the shares of Common Stock underlying the warrants.
In addition, in connection with the issuance of the warrants, the Company granted an exemption in favor of each holder pursuant to Section 36 of the Tax Benefits Preservation Plan, dated January 29, 2024, as the same may be amended from time to time, among the Company and Equiniti Trust Company, LLC (the Plan), such that neither holder was deemed to be an “Acquiring Person” (as defined in the Plan) solely in connection with (i) the issuance of the warrants nor (ii) the acquisition of beneficial ownership of securities of the Company pursuant to the exercise of the warrants.
For the warrants issued in December 2024, prior to the second anniversary of the issue date, the Company may call for cancellation up to an aggregate 32,186 shares of Common Stock underlying the warrants for consideration equal to $51.13 per share; provided, that the volume weighted average price on the trading day immediately preceding the date the Company delivers a written call notice to a holder exceeds $68.17 . As of September 30, 2026, the Company has no intention of exercising the call provision. The Company will reassess this intention on a quarterly basis.
Stock Warrants Issued in Connection with Consulting Services Agreement:
On August 1, 2025, as part of a consulting services agreement, the Company issued two warrants to purchase Common Stock of the Company to Forum3 Inc., consisting of an initial warrant exercisable through October 31, 2025 (the Initial Warrant) and a coverage warrant to purchase up to 35,000 shares of Common Stock at an exercise price of $24.20 per share (the Coverage Warrant). On September 11, 2025, Forum3 Inc. exercised $300,000 of the Initial Warrant at the 10 -day average closing price of $23.87 per share for a total of 12,567 shares of Common Stock. The remaining $190,000 of the Initial Warrant expired on October 31, 2025. As a result of the partial exercise of the Initial Warrant, the Coverage Warrant vested with respect to 21,428 shares of Common Stock, which will remain exercisable until August 1, 2028.
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Tax Benefits Preservation Plan:
The Company adopted a Tax Benefits Preservation Plan intended to help protect the availability of certain tax attributes (including net operating loss carryforwards) by deterring acquisitions of the Common Stock above a specified ownership threshold. In connection with the adoption of the Plan, the Company declared a dividend distribution of one preferred stock purchase right (a Right) for each outstanding share of Common Stock to shareholders of record as of February 9, 2024. The dividend had a de minimis value. The Rights are set forth in the Plan. On January 27, 2025, the Company entered into Amendment No. 1 to the Plan, extending the expiration date of the Plan from January 29, 2025, to January 29, 2028 (the Extension). Pursuant to the terms of the Plan, the Company submitted the Extension to its shareholders for ratification at the October 28, 2025 annual shareholders meeting, and the shareholders ratified the Plan.
The material terms of the Rights include, among others: (i) the ownership threshold that generally triggers the Rights becoming exercisable (an Acquiring Person) is 4.95 % beneficial ownership, subject to customary exemptions, grandfathering, and Board discretion as set forth in the Plan; (ii) prior to the Distribution Date (as defined in the Plan), the Rights trade together with the Company’s common stock and are not exercisable; (iii) upon the Distribution Date, the Rights detach and become exercisable to purchase from the Company one one-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an initial purchase price of $73.00 , subject to adjustment; (iv) if a person becomes an Acquiring Person, each Right (other than Rights held by the Acquiring Person, which become void) generally entitles its holder to purchase, for the exercise price, a number of shares of the Company’s common stock having a market value of two times the exercise price (a “flip-in” feature), subject to the terms and limitations in the Plan; (v) upon certain business combination transactions following the occurrence of an Acquiring Person, Rights holders may have the right to purchase common stock of the acquiring company at a discount (a “flip-over” feature), subject to the terms of the Plan; (vi) the Rights are redeemable by the Board at $0.0001 per Right prior to the time a person becomes an Acquiring Person, and the Board may exchange the Rights for shares of Common Stock (or other consideration) under specified circumstances; and (vii) the Rights expire on January 29, 2028, unless earlier redeemed or exchanged in accordance with the Plan.
The Company evaluated the Rights under applicable U.S. GAAP, including the guidance for freestanding financial instruments indexed to, and potentially settled in, an entity’s own equity. The Company concluded that the declaration and distribution of the Rights did not result in recognition of an asset or liability and did not have an impact on the Company’s unaudited condensed consolidated balance sheets as of September 30, 2026, and June 30, 2026, or unaudited condensed consolidated statements of operations or cash flows for the three months ended September 30, 2026, and 2025, because (i) the Rights were issued to existing shareholders as a dividend with no proceeds received, (ii) the Rights were not exercised during the periods, and (iii) the Rights are contingently exercisable only upon the occurrence of specified events and, based on their terms, are intended to be classified in shareholders’ equity rather than as liabilities. Costs directly attributable to the adoption of the Plan (e.g., external legal, advisory, and filing fees) were recorded in general and administrative expense as incurred, consistent with the nature of the costs.
4. INCOME TAXES:
A summary of the income tax expense and corresponding effective tax rate is as follows:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
Income tax expense | $ | ( | $ | ( | ||||||||||||||||||||||
| Effective tax rate | % | % | ||||||||||||||||||||||||
The decrease in the Company’s effective tax rate for the three months ended September 30, 2026, primarily relates to lower pre-tax earnings and a current period discrete tax benefit related to the Company's deferred tax valuation allowance.
With limited exceptions, due to net operating loss carryforwards, our federal, state, and foreign tax returns are open to examination for all years since 2014, 2013, and 2016, respectively.
12
5. COMMITMENTS AND CONTINGENCIES:
The Company is a plaintiff or defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has faced allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company has faced allegations of non-payment of rent and associated charges. Further, similar to other large retail employers, the Company has faced, and may continue to face, allegations of purported patent, consumer, and wage and hour violations, some of which involve class actions.
In November 2025, the Company received a civil investigative demand (CID) from the U.S. Department of Justice (DOJ) issued pursuant to the False Claims Act. The investigative inquiry concerns applications for Paycheck Protection Program (PPP) loans and loan forgiveness obtained by Alline Salon Group (Alline) prior to the Company’s acquisition of Alline. The Company previously acquired Alline pursuant to the terms of the Membership Interest Purchase Agreement, dated December 19, 2024, by and among the Company, Super C Group, LLC d/b/a Alline Salon Group, ASG Holdings, LLC, Vision Cuts, LLC, SAAW Project, LLC, and VGP II, LLC. The Company is cooperating with the DOJ’s inquiry, and at this time, there has been no formal demand for the return of the PPP loan proceeds, and the Company is not aware of any formal claim or lawsuit having been initiated against the Company. Nevertheless, the Company has recorded an accrual of $2.5 million which relates to a PPP loan obtained by Alline in the principal aggregate amount of approximately $2 million which was forgiven in full by the Small Business Administration (the SBA) in December 2021, and which reflects the Company’s recent understanding as to the current focus of the inquiry. The Company is continuing to respond to additional requests for information, and while the timing of any ultimate resolution of the inquiry is uncertain, the Company is evaluating its rights to indemnification and other potential sources of recovery for any claim relating to this matter.
Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could incur judgments in the future or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.
6. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
The table below reconciles the cash and cash equivalents balances and restricted cash balances recorded within other current assets on the Condensed Consolidated Balance Sheets to the amount of cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Statements of Cash Flows:
| September 30, 2026 | June 30, 2026 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash, included in other current assets (1) | ||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
(1)Restricted cash within other current assets primarily relates to consolidated advertising cooperatives funds, which can only be used to settle obligations of the respective cooperatives, and contractual obligations to collateralize the Company's self-insurance programs.
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7. LEASES
At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and its corporate facilities under operating leases. The original terms range from one to ten years with many leases renewable for an additional five to ten-year term at the option of the Company. In addition to the obligation to make fixed rental payments for the use of the salons, the Company has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total rent includes the following:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Office rent (1) | $ | $ | ||||||||||||||||||||||||
| Lease termination expense (2) | ||||||||||||||||||||||||||
| Lease liability benefit (3) | ( | ( | ||||||||||||||||||||||||
| Franchise salon rent | ( | |||||||||||||||||||||||||
| Company-owned salon rent | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
(1)Rental income associated with the sublease of the corporate office space is recorded in other income and was $0.3
(2)Costs incurred to exit salons before the lease end date in order to relieve the Company of future lease obligations.
(3)Upon termination of previously impaired leases, the Company derecognizes the corresponding ROU assets and lease liabilities which results in a net gain. In addition, the Company recognizes a benefit from lease liabilities decreasing in excess of previously impaired ROU assets for ongoing leases that were previously impaired.
The Company leases salon premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. All lease-related costs are passed through to the franchisees. The Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Condensed Consolidated Statements of Operations. For the three months ended September 30, 2026, and 2025, franchise rental income and franchise rent expense were $15.0 17.4 five years . The Company expects to renew the SmartStyle master lease and certain leases for locations subleased to our franchisees upon expiration of those leases. Other leases are expected to be renewed by the franchisee upon expiration.
All the Company's leases are operating leases. The lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date, including one lease term option when the lease is expected to be renewed. The ROU asset is initially and subsequently measured throughout the expected lease term at the carrying amount of the lease liability, plus initial direct costs, less accrued lease payments and unamortized lease incentives received, if any. Expense for lease payments is recognized on a straight-line basis over the lease term, including the lease renewal option when the lease is expected to be renewed. Generally, the non-lease components, such as real estate taxes and other occupancy expenses, are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable.
The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on the original expected lease term. The weighted average remaining lease term was 4.11 and 4.35 years, and the weighted average discount rate was 6.85 % and 6.82 % for all salon operating leases as of September 30, 2026, and June 30, 2026, respectively.
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As of September 30, 2026, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (Dollars in thousands):
| Fiscal Year | Leases for Franchise Salons | Leases for Company-owned Salons | Corporate Leases | Total Operating Lease Payments | Sublease Income to be Received from Franchisees | Net Rent Commitments | ||||||||||||||||||||||||||||||||
| Remainder of 2027 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| 2028 | ( | |||||||||||||||||||||||||||||||||||||
| 2029 | ( | |||||||||||||||||||||||||||||||||||||
| 2030 | ( | |||||||||||||||||||||||||||||||||||||
| 2031 | ( | |||||||||||||||||||||||||||||||||||||
| Thereafter | ( | |||||||||||||||||||||||||||||||||||||
| Total future obligations | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Less amounts representing interest | ||||||||||||||||||||||||||||||||||||||
| Present value of lease liability | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Less short-term lease liability | ||||||||||||||||||||||||||||||||||||||
| Long-term lease liability | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
As a result of having assigned our interest in obligations under certain real estate leases directly to our franchisees, the Company is secondarily liable on such lease agreements as guarantor. These leases have varying terms, the latest of which expires in 2035. As of September 30, 2026, the maximum potential amount of future payments the Company could be required to make under these guarantees is approximately $4.3 million, and no liability has been recognized in the Unaudited Condensed Consolidated Balance Sheets for these guarantees, as the probability of default is considered remote.
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8. FINANCING ARRANGEMENTS:
The Company's debt consists of the following:
| Three Months Ended September 30, 2026 | Fiscal Year 2026 | Balance at September 30, 2026 | Balance at June 30, 2026 | ||||||||||||||||||||||||||
| (Average cash interest rate %) | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Term loan (1) | $ | $ | |||||||||||||||||||||||||||
| Paid-in-kind interest | |||||||||||||||||||||||||||||
| Deferred financing fees (2) | ( | ( | |||||||||||||||||||||||||||
| Term loan, net | |||||||||||||||||||||||||||||
| Revolving credit facility (1) | |||||||||||||||||||||||||||||
| Fair value of warrants issued to lenders | ( | ( | |||||||||||||||||||||||||||
| Total debt, net | |||||||||||||||||||||||||||||
| Long-term debt, current portion | ( | ( | |||||||||||||||||||||||||||
| Total long-term debt, net | $ | $ | |||||||||||||||||||||||||||
_______________________________________________________________________________
(1)The term loan and revolving credit facility mature on June 24, 2029. The interest rate applicable to any letter of credit is 5.25 % and paid currently in cash.
(2)Deferred financing fees, inclusive of $4.3 million of original issue discount fees, are amortized on a straight-line basis over the term of the related agreement.
The Company's credit agreement, as amended (the 2024 Credit Agreement), includes a $120.0 million term loan and a $25.0 million revolving credit facility, with a $10.0 million minimum liquidity covenant, is secured by the Company's assets, and is set to expire on June 24, 2029. In connection with the 2024 Credit Agreement, the Company issued detachable stock warrants to the debt lenders. See Note 3 for additional details.
As of September 30, 2026, the Company had outstanding standby letters of credit under the revolving credit facility of $5.4 million, primarily related to the Company's self-insurance program. As of September 30, 2026, total available liquidity, net of the $10.0 million minimum liquidity covenant, and available credit under the $25.0 million revolving credit facility, as defined by the amended agreement, were $30.4 million and $19.6 million, respectively. The Company was in compliance with its covenants and other requirements of the financing arrangements as of September 30, 2026.
The interest rate on the 2024 Credit Agreement is based on the secured overnight financing rate (SOFR) plus margin. The margin is subject to change based on the Company's total leverage ratio, remeasured annually on a predetermined date set by the lender. When the Company's total leverage ratio is greater than or equal to 3.75 to 1.00, the margin applicable to the term loan and revolving credit facility is 9.00 3.75 to 1.00, the margin rate is 8.50 %. In either scenario, the Company has elected the option to pay 4.50 % of the margin as paid-in-kind (PIK) interest (added to the principal balance and thereafter accruing interest), and the remainder is paid currently in cash. The SOFR base rate applicable to the debt has a floor of 2.50 % per annum. The interest rate applicable to any letter of credit is 5.25 % and paid currently in cash.
The 2024 Credit Agreement includes scheduled payments totaling $3.0 7.3 million to satisfy the annual mandatory prepayment of 75 % of excess cash flow as defined in the 2024 Credit Agreement. This amount was applied as a prepayment of the term loan and reduced the Company's unrestricted cash balance accordingly.
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9. FAIR VALUE MEASUREMENTS:
Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data).
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of September 30, 2026, and June 30, 2026, the estimated fair value of the Company's cash, cash equivalents, restricted cash, receivables, inventory, deferred compensation assets, debt, and accounts payable approximated their carrying values.
The change in the earn-out liability measured at fair value using significant unobservable inputs (Level 3) is as follows:
| Three Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Earn-out liability at beginning of period | $ | $ | |||||||||||||||
| Less gain on earn-out liability | |||||||||||||||||
| Earn-out liability at end of period | $ | $ | |||||||||||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We measure certain assets, including the Company's tangible fixed and other assets, and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections.
10. EARNINGS PER SHARE:
The Company's basic earnings per share is calculated as net income divided by weighted average common shares outstanding, including nonforfeitable restricted stock units (RSUs) for which settlement has been deferred. Other unvested stock-based awards are excluded from basic earnings per share. The Company's diluted earnings per share is calculated as net income divided by weighted-average common shares and common share equivalents outstanding, including the dilutive effect of stock options (SOs), stock appreciation rights (SARs), RSUs, stock-settled performance units (PSUs), and warrants issued in connection with the Company's credit and consulting services agreements. Stock-based awards and warrants that are antidilutive are excluded from diluted earnings per share.
The following table sets forth the presentation of shares outstanding used in the calculation of basic and diluted earnings per share (EPS):
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (Shares in thousands) | ||||||||||||||||||||||||||
| Denominator for basic EPS - weighted average common shares | ||||||||||||||||||||||||||
| Dilutive shares associated with option plans | ||||||||||||||||||||||||||
| Denominator for diluted EPS - weighted average common shares and dilutive potential common shares | ||||||||||||||||||||||||||
| Stock-based awards excluded from EPS calculation - anti-dilutive | ||||||||||||||||||||||||||
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11. SEGMENT INFORMATION:
Segment information is presented on the same basis that the Company internally organizes the business for assessing performance and making decisions regarding allocation of resources. The Company's Chief Operating Decision Maker (CODM) is our President and Chief Executive Officer. Revenue, expenses, and operating income (loss) by segment are regularly reviewed by the CODM to make decisions about resources to be allocated to the segments, assess current performance, and forecast future performance. Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis and using those results along with forecasts and other non-financial information in our annual budgeting process. The Company's CODM does not evaluate reportable segments using assets and capital expenditure information. Consistent with our internal management reporting, unallocated expenses include certain items impacting comparability. These unallocated items are not defined terms within GAAP. They are based on how management views the business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance and are not attributable to either segment. Unallocated fees include one-time professional fees and settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired ROU assets, lease termination fees, asset retirement obligation costs, goodwill and long-lived asset impairment charges, and the benefit from the Company's debt refinancing.
Financial information concerning the Company's reportable operating segments is shown in the tables below.
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| Franchise | Company-owned | Total | ||||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Expenses (1) | ||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | $ | ||||||||||||||||||||||||||||||||||||
| Rent | ||||||||||||||||||||||||||||||||||||||
| Other expenses (2) | ||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Segment profit (loss) | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
| Unallocated expenses, net | ( | |||||||||||||||||||||||||||||||||||||
| Income from operations before income taxes | $ | |||||||||||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.
(2)Other expenses include advertising fund and franchise rent expenses which are offset in total revenue and, as such, not used as a primary measure of performance by our CODM.
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| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| Franchise | Company-owned | Total | ||||||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Expenses (1) | ||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | $ | ||||||||||||||||||||||||||||||||||||
| Rent | ||||||||||||||||||||||||||||||||||||||
| Other expenses (2) | ||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Unallocated expenses, net | ( | |||||||||||||||||||||||||||||||||||||
| Income from operations before income taxes | $ | |||||||||||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.
(2)Other expenses include advertising fund and franchise rent expenses which are offset in total revenue and, as such, not used as a primary measure of performance by our CODM.
The franchise reportable operating segment is comprised of franchise salons located mainly in strip center locations and Walmart stores. Franchise salons offer high quality, convenient and value-priced hair care and beauty services and retail products. This segment operates primarily in the U.S., Puerto Rico, and Canada and primarily includes the Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters, Roosters, and Magicuts concepts.
The company-owned salons reportable operating segment is comprised of company-owned salons located mainly in strip center locations. Company-owned salons offer high quality, convenient and value priced hair care and beauty services and retail products. Supercuts, Cost Cutters, and Holiday Hair operating in the U.S. are generally within the company-owned salons segment.
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Segment information is prepared on the same basis that the CODM reviews financial information for operational decision-making purposes. The Company's reportable operating segments consisted of the following salons:
| September 30, 2026 | June 30, 2026 | |||||||||||||
FRANCHISE SALONS: | ||||||||||||||
Supercuts | ||||||||||||||
SmartStyle/Cost Cutters in Walmart stores | ||||||||||||||
Portfolio Brands | ||||||||||||||
Total North American salons | ||||||||||||||
Total International salons (1) | ||||||||||||||
Total franchise salons | ||||||||||||||
as a percent of total franchise and company-owned salons | % | % | ||||||||||||
COMPANY-OWNED SALONS: | ||||||||||||||
Supercuts | ||||||||||||||
Portfolio Brands | ||||||||||||||
Total company-owned salons | ||||||||||||||
as a percent of total franchise and company-owned salons | % | % | ||||||||||||
Total franchise and company-owned salons | ||||||||||||||
_______________________________________________________________________________
(1)Canadian and Puerto Rican salons are included in the North American salon totals.
12. OTHER EVENTS:
The Company previously agreed to pay the former Vice Chairman and his spouse an annual benefit for life. The former Vice Chairman passed away in October of 2013. The fair value of the remaining obligations to his spouse totaled $2.2 million as of June 30, 2026, with $0.6 million within accrued expenses and the remainder included in other non-current liabilities on the Condensed Consolidated Balance Sheet. During the three months ended September 30, 2026, the spouse passed away, which terminated the Company's obligation under this arrangement. As a result, the Company derecognized the liability previously recorded, recognizing a gain of $2.1 million within general and administrative on the Condensed Consolidated Statement of Operations for the three months ended September 30, 2026. No remaining obligation is recorded on the Condensed Consolidated Balance Sheet as of September 30, 2026.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides management's perspective on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. This MD&A should be read in conjunction with the MD&A included in our June 30, 2026, Annual Report on Form 10-K and other documents filed or furnished with the SEC during the current fiscal year.
MANAGEMENT'S OVERVIEW
Regis Corporation (NasdaqGM:RGS) is a leader in the beauty salon industry. As of September 30, 2026, the Company franchised or owned 3,678 locations, primarily in North America. Our locations consisted of 3,419 franchised salons and 259 company-owned salons. Regis’ franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters®, and First Choice Haircutters®. As of September 30, 2026, the Company had 1,590 employees.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to our critical accounting estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Our significant accounting policies can be found in Note 1 to the Consolidated Financial Statements contained in Part II, Item 8 of the June 30, 2026 Annual Report on Form 10-K. There have been no changes to our critical accounting policies from those disclosed on our Form 10-K for the year ended June 30, 2026.
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RESULTS OF OPERATIONS
System-wide results
Our results are impacted by our system-wide sales, which include sales by all points of distribution, whether owned by our franchisees or the Company. While we do not record sales by franchisees as revenue, and such sales are not included in our unaudited Condensed Consolidated Financial Statements, we believe that this operating measure is important in obtaining an understanding of our financial performance. We believe system-wide sales information aids in understanding how we derive royalty revenue and in evaluating performance. In the three months ended September 30, 2026, a net 29 franchise salons and five company-owned salons have closed.
The following table summarizes system-wide revenue and system-wide same-store sales by concept:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| System-wide revenue | $ | 265.6 | $ | 273.7 | ||||||||||||||||||||||
| Supercuts | 2.0 | % | 2.5 | % | ||||||||||||||||||||||
| SmartStyle | (2.3) | (4.2) | ||||||||||||||||||||||||
| Portfolio Brands | (2.0) | 1.1 | ||||||||||||||||||||||||
| Total system-wide same-store sales (1) | 0.2 | % | 0.9 | % | ||||||||||||||||||||||
(1)System-wide same-store sales are calculated as the total change in sales for system-wide franchise and company-owned locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly system-wide same-store sales are the sum of the system-wide same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. System-wide same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
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Condensed Consolidated Results of Operations (Unaudited)
The following table sets forth, for the periods indicated, certain information derived from our unaudited Condensed Consolidated Statements of Operations. The percentages are computed as a percent of total consolidated revenues, except as otherwise indicated, and the increase (decrease) is measured in basis points. Variances calculated on amounts shown in millions may result in rounding differences.
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | % of Total Revenue | Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Royalties | $ | 13.6 | $ | 14.0 | 25.0 | % | 23.7 | % | 130 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees | 1.5 | 1.8 | 2.8 | 3.1 | (30) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising fund contributions | 5.3 | 5.6 | 9.8 | 9.5 | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franchise rental income | 15.0 | 17.4 | 27.6 | 29.5 | (190) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company-owned salon revenue | 18.9 | 20.2 | 34.8 | 34.2 | 60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 10.7 | 11.4 | 19.7 | 19.3 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rent | 3.3 | 3.2 | 6.1 | 5.4 | 70 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising fund expense | 5.3 | 5.6 | 9.8 | 9.5 | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franchise rent expense | 15.0 | 17.4 | 27.6 | 29.5 | (190) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense (1) | 13.6 | 14.8 | 25.0 | 25.1 | (10) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1.1 | 0.8 | 2.0 | 1.4 | 60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (2) | 5.3 | 5.9 | 9.8 | 10.0 | (20) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (5.1) | (5.3) | (9.4) | (9.0) | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on earn-out liability | — | 1.0 | — | 1.7 | (170) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | 0.4 | 0.2 | 0.7 | 0.3 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (3) | (0.1) | (0.5) | 10.6 | 28.3 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (2) | 0.5 | 1.4 | 0.9 | 2.4 | (150) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Includes cost of services and products sold to guests in our company-owned salons. Excludes general and administrative expense, rent and depreciation and amortization related to company-owned salons.
(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
(3)Computed as a percent of income before income taxes. The income tax basis point change is noted as not applicable (N/A) because the discussion within the MD&A is related to the effective income tax rate.
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Three Months Ended September 30, 2026, Compared with Three Months Ended September 30, 2025
Royalties
During the three months ended September 30, 2026, royalties decreased $0.4 million, or 2.9%, primarily due to a decrease in franchise salon count caused by franchise salon closures.
Fees
During the three months ended September 30, 2026, fees decreased $0.3 million, or 16.7%, primarily as a result of lower franchise salon count.
Advertising Fund Contributions
During the three months ended September 30, 2026, advertising fund contributions decreased $0.3 million, or 5.4%, primarily due to lower salon count.
Franchise Rental Income
During the three months ended September 30, 2026, franchise rental income decreased $2.4 million, or 13.8%, primarily due to franchisees signing their own leases and the decrease in franchise salon count.
Company-Owned Salon Revenue
During the three months ended September 30, 2026, company-owned salon revenue decreased $1.3 million, or 6.4%, primarily due to closures of underperforming company-owned salons.
General and Administrative
General and administrative expense for the three months ended September 30, 2026, decreased $0.7 million, or 6.1%, primarily due to a $2.1 million gain on the derecognition of benefit obligations and overall corporate cost saving measures. These decreases were partially offset by higher company-owned general and administrative expenses, including a $2.5 million accrual related to a DOJ inquiry concerning a PPP loan obtained by Alline that had been forgiven prior to the Company's acquisition of Alline in December 2024.
Rent
During the three months ended September 30, 2026, rent expense increased $0.1 million, or 3.1%, primarily due to an adjustment related to facility occupancy costs.
Advertising Fund Expense
During the three months ended September 30, 2026, advertising fund expense decreased $0.3 million, or 5.4%, primarily due to lower salon count.
Franchise Rent Expense
During the three months ended September 30, 2026, franchise rent expense decreased $2.4 million, or 13.8%, primarily due to franchisees signing their own leases and the decrease in franchise salon count.
Company-Owned Salon Expense
Company-owned salon expense, for the three months ended September 30, 2026, decreased $1.2 million, or 8.1%, primarily due to closures of underperforming company-owned salons.
Depreciation and Amortization
Depreciation and amortization for the three months ended September 30, 2026, increased $0.3 million, or 37.5%, primarily due to depreciation expense associated with the company-owned salons.
Interest Expense
For the three months ended September 30, 2026, interest expense decreased $0.2 million or 3.8%, primarily due to debt payments resulting in lower accrued interest. Cash interest decreased $0.2 million for the three months ended September 30, 2026.
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Gain on Earn-Out Liability
The $1.0 million gain on earn-out liability in the three months ended September 30, 2025, reflected the change in estimated fair value expected to be paid in conjunction with the Alline acquisition. There was no change to the valuation in the three months ended September 30, 2026.
Other, Net
Other, net primarily relates to corporate sublease income and foreign currency gains and losses. Other, net increased $0.2 million in the three months ended September 30, 2026, primarily due to foreign currency gains and losses adjustments.
Income Tax Expense
During the three months ended September 30, 2026, the Company recognized a tax expense of $0.1 million, with a corresponding effective tax rate of 10.6%, as compared to recognizing a tax expense of $0.5 million with a corresponding effective tax rate of 28.3% during the three months ended September 30, 2025. See Note 4 to the unaudited Condensed Consolidated Financial Statements.
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Results of Operations by Segment
Based on our internal management structure, we report two segments: franchise and company-owned salons. See Note 11 to the unaudited Condensed Consolidated Financial Statements. Significant results of continuing operations are discussed below for each of these segments.
Franchise Salons
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Decrease (1) | ||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
| Royalties | $ | 13.6 | $ | 14.0 | $ | (0.4) | ||||||||||||||||||||||||||||||||
| Fees | 1.5 | 1.8 | (0.3) | |||||||||||||||||||||||||||||||||||
| Advertising fund contributions | 5.3 | 5.6 | (0.3) | |||||||||||||||||||||||||||||||||||
| Franchise rental income | 15.0 | 17.4 | (2.4) | |||||||||||||||||||||||||||||||||||
| Total franchise revenue (1) | $ | 35.4 | $ | 38.7 | $ | (3.3) | ||||||||||||||||||||||||||||||||
| Franchise same-store sales (2) | 0.3 | % | 0.9 | % | ||||||||||||||||||||||||||||||||||
| Total franchise salons | 3,419 | 3,593 | (174) | |||||||||||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
(2)Franchise same-store sales are calculated as the total change in sales for franchise locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly franchise same-store sales are the sum of the franchise same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. Franchise same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
Franchise Revenue
Franchise revenue decreased $3.3 million during the three months ended September 30, 2026, compared with the three months ended September 30, 2025, primarily due to the decrease in franchise rental income due to franchisees signing their own leases, and the decrease in franchise salon count.
Company-Owned Salons
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Decrease | ||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||
| Company-owned salon revenue | $ | 18.9 | $ | 20.2 | $ | (1.3) | ||||||||||||||||||||||||||||||||
| Company-owned same-store sales comps | (1.1) | % | 1.7 | % | ||||||||||||||||||||||||||||||||||
| Total company-owned salons | 259 | 286 | (27) | |||||||||||||||||||||||||||||||||||
Company-Owned Salon Revenue
During the three months ended September 30, 2026, compared with the three months ended September 30, 2025, company-owned salon revenue decreased $1.3 million, primarily due to the closure of underperforming company-owned salons.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has a credit agreement with TCW Asset Management Company, LLC, and MidCap Financial Trust, which matures in June 2029. In addition to a $10.0 million minimum liquidity covenant, the agreement includes typical provisions and financial covenants, including leverage and fixed-charge coverage ratio covenants.
Sources of Liquidity
Funds generated by operating activities, available cash and cash equivalents, and our credit agreement are our most significant sources of liquidity. The Company believes it has sufficient liquidity, cash on hand, and borrowing capacity to meet its obligations in the next twelve months and until maturity of the credit agreement in June 2029.
As of September 30, 2026, cash and cash equivalents were $20.8 million, with $19.5 million and $1.3 million within the United States and Canada, respectively.
As of September 30, 2026, the Company's borrowing arrangements include a $108.2 million term loan, $12.5 million of paid-in-kind interest and a $25.0 million revolving credit facility with a $10.0 million minimum liquidity covenant that expires in June 2029. As of September 30, 2026, the unused available credit under the revolving credit facility was $19.6 million, and total liquidity per the agreement was $30.4 million. See Note 8 to the unaudited Condensed Consolidated Financial Statements.
Uses of Cash
The Company closely manages its liquidity and capital resources. The Company's liquidity requirements depend on key variables, including the performance of the business, the level of investment needed to support its business strategies, credit facilities and borrowing arrangements, and working capital management.
Cash Requirements
The Company's most significant contractual cash requirements as of September 30, 2026, were lease commitments and interest payments. See Notes 7 and 8 to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
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Cash Flows
Cash Flows from Operating Activities
During the three months ended September 30, 2026, cash provided by operating activities was $2.6 million compared to $2.3 million in the three months ended September 30, 2025, primarily due to our lower cost structure, as well as timing of accounts payable.
Cash Flows from Investing Activities
During the three months ended September 30, 2026, and 2025, cash used in investing activities of $0.5 million and $0.4 million, respectively, was primarily due to capital expenditures.
Cash Flows from Financing Activities
During the three months ended September 30, 2026, and 2025, cash used in financing activities was $8.5 million and $1.3 million, respectively, and primarily relates to the repayment of long-term debt as a result of the annual excess cash sweep per the terms of the Company's credit agreement.
Financing Arrangements
See Note 8 of the Notes to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, and Note 8 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, for additional information regarding our financing arrangements.
Debt to Capitalization Ratio
Our debt to capitalization ratio, calculated as the principal amount of debt, including paid-in-kind interest accrued, as a percentage of the principal amount of debt and shareholders' equity at fiscal quarter end, was as follows:
_______________________________________________________________________________
| Debt to Capitalization (1) | ||||||||
| September 30, 2026 | 38.4 | % | ||||||
| June 30, 2026 | 39.8 | % | ||||||
(1)Excludes the long-term lease liability as that liability is offset by the ROU asset.
Share Repurchase Program
In May 2000, the Board approved a stock repurchase program with no stated expiration date. Since that time and through September 30, 2026, the Board has authorized $650.0 million to be expended for the repurchase of the Company's stock under this program. All repurchased shares become authorized but unissued shares of the Company. The timing and amounts of any repurchases depend on many factors, including the market price of the Common Stock and overall market conditions. During the three months ended September 30, 2026, the Company did not repurchase any shares. As of September 30, 2026, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remain authorized for repurchase. The Company does not anticipate repurchasing shares of Common Stock for the foreseeable future.
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SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company contains or may contain "forward-looking statements" within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management's best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, "may," "will," "believe," "project," "forecast," "expect," "estimate," "anticipate," and "plan." In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These uncertainties include a potential material adverse impact on our business and results of operations as a result of changes in consumer shopping trends and changes in manufacturer distribution channels; our ability to realize the anticipated benefits of the Alline Acquisition; laws and regulations could require us to modify current business practices and incur increased costs including increases in minimum wages; changes in the general economic environment; changes in consumer tastes, hair product innovation, fashion trends and consumer spending patterns; our reliance on franchise royalties and overall success of our franchisees’ salons; our ability to minimize risks associated with owning and operating additional salons; our salons' dependence on a third-party supplier agreement for merchandise; our and our franchisees' ability to attract, train and retain talented stylists and salon leaders; the success of our franchisees, which operate independently; data security and privacy compliance, and our ability to manage cyber threats and protect the security of potentially sensitive information about our guests, franchisees, employees, vendors or Company information; our use of artificial intelligence; the ability of the Company to maintain a satisfactory relationship with Walmart; marketing efforts to drive traffic to our franchisees' and company-owned salons; our ability to maintain and enhance the value of our brands; reliance on legacy information technology systems; reliance on external vendors; the use of social media; the effectiveness of our enterprise risk management program; potential challenges with the implementation or ongoing operation of our new enterprise resource planning system; our ability to generate sufficient cash flow to satisfy our debt service obligations; compliance with covenants in our financing arrangement; premature termination of agreements with our franchisees; the continued ability of the Company to implement cost reduction initiatives and achieve expected cost savings; our continued ability to compete in our business markets; potential liabilities related to the employee retention credit received by Alline; reliance on our management team and other key personnel; the continued ability to maintain an effective system of internal control over financial reporting; changes in tax exposure; the ability of our Tax Preservation Plan to protect the future availability of the Company's tax assets; potential litigation and other legal or regulatory proceedings; or other factors not listed above. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K, 10-Q, and 8-K and Proxy Statements on Schedule 14A.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates and changes in foreign currency exchange rates. There has been no material change to the factors discussed within Part II, Item 7A in the Company's June 30, 2026, Annual Report on Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of the CEO and CFO, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), at the end of the period. Based on their evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
Effective August 1, 2026, the Company implemented a new enterprise resource planning (ERP) system which resulted in changes to certain financial reporting processes and related internal controls. The Company modified certain controls to address the new system environment and continues to monitor and evaluate the effectiveness of these controls. Other than the changes associated with the ERP implementation, there were no material changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
See Note 5 to the unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q for a discussion of a CID the Company received from the DOJ pursuant to the False Claims Act concerning applications for PPP loans and loan forgiveness obtained by Alline prior to the Company’s acquisition of Alline.
In addition, the Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has been faced with allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company faces allegations of non-payment of rent and associated charges. Further, similar to other large retail employers, the Company has been faced with allegations of purported patent, consumer, and wage and hour violations, some of which involve class actions. Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchase Program
In May 2000, the Board approved a stock repurchase program with no stated expiration date. Since that time and through September 30, 2026, the Board has authorized $650.0 million to be expended for the repurchase of the Company's stock under this program. All repurchased shares become authorized but unissued shares of the Company. The timing and amounts of any repurchases depend on many factors, including the market price of the Common Stock and overall market conditions. During the three months ended September 30, 2026, the Company did not repurchase shares. As of September 30, 2026, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remain authorized for repurchase. The Company does not anticipate repurchasing shares of Common Stock for the foreseeable future.
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
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Item 6. Exhibits
Exhibit 31.1 | President and Chief Executive Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
Exhibit 31.2 | Executive Vice President and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
Exhibit 32 | Chief Executive Officer and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| Exhibit 101 | The following financial information from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026, formatted in Inline Xtensible Business Reporting Language (iXBRL) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Shareholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements. | |||||||
| Exhibit 104 | The cover page from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026, formatted in iXBRL (included as Exhibit 101). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: November 5, 2026 | By: | /s/ KERSTEN D. ZUPFER | ||||||
| Kersten D. Zupfer, | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
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