Regis Q2 2026 Regis Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 Regis Corp Earnings Call
Speaker #2: Thank you for joining the quarterly REGIS earnings call. We will begin shortly. Good morning, and thank you for joining the REGIS second quarter 2026 earnings conference call.
Operator: Thank you for joining the Quarterly Regis Earnings Call. We will begin shortly.
Operator: Thank you for joining the Quarterly Regis Earnings Call. We will begin shortly.
Kersten Zupfer: Good morning, and thank you for joining the Regis second quarter 2026 earnings conference call. I am your host, Kerstin Zupfer, Executive Vice President and Chief Financial Officer. I am joined today by our interim Chief Executive Officer, Jim Lain. 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 applies to our comments made on the call today. These documents can be found on our website, www.regiscorp.com/investor-relations. We will be taking questions at the end of the call. Please use the Q&A feature to submit any questions. With that, I will now turn the call over to Jim Lain.
Kersten Zupfer: Good morning, and thank you for joining the Regis second quarter 2026 earnings conference call. I am your host, Kerstin Zupfer, Executive Vice President and Chief Financial Officer. I am joined today by our interim Chief Executive Officer, Jim Lain. 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 applies to our comments made on the call today. These documents can be found on our website, www.regiscorp.com/investor-relations. We will be taking questions at the end of the call. Please use the Q&A feature to submit any questions. With that, I will now turn the call over to Jim Lain.
Speaker #2: I am your host, Kersten Zupfer, Executive Vice President and Chief Financial Officer. I am joined today by our interim Chief Executive Officer, Jim Lain.
Speaker #2: 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 8K filing, also applies to our comments made on the call today.
Speaker #2: These documents can be found on our website www.regiscorp.com/investor-relation. We will be taking questions at the end of the call. Please use the Q&A feature to submit any questions.
Speaker #2: With that, I will now turn the call over to Jim
Jim Lain: Good morning, everyone, and thank you for joining us for Regis Corporation's Second Quarter Fiscal 2026 Earnings Call. As I mentioned last quarter, our focus remains on building a more durable, modern, and disciplined Regis, one that is positioned to sustain consistent cash generation, improve financial performance, and create long-term value for all stakeholders. Q2 represents continued progress on that journey. We are operating with greater precision and sharpening our focus on the execution levers that matter most despite traffic headwinds across the system. For the second quarter, Adjusted EBITDA was $8 million, an increase of $900,000 year-over-year driven by continued G&A discipline and contributions from our company-owned salon portfolio. Year to date, Adjusted EBITDA of $16 million is up $1.2 million versus the prior year. Consolidated same-store sales for the quarter declined modestly by 0.10%.
Jim Lain: Good morning, everyone, and thank you for joining us for Regis Corporation's Second Quarter Fiscal 2026 Earnings Call. As I mentioned last quarter, our focus remains on building a more durable, modern, and disciplined Regis, one that is positioned to sustain consistent cash generation, improve financial performance, and create long-term value for all stakeholders. Q2 represents continued progress on that journey. We are operating with greater precision and sharpening our focus on the execution levers that matter most despite traffic headwinds across the system. For the second quarter, Adjusted EBITDA was $8 million, an increase of $900,000 year-over-year driven by continued G&A discipline and contributions from our company-owned salon portfolio. Year to date, Adjusted EBITDA of $16 million is up $1.2 million versus the prior year. Consolidated same-store sales for the quarter declined modestly by 0.10%.
Speaker #3: Joining us for REGIS Corporation's second quarter fiscal 2026 earnings call. As I mentioned last quarter, our focus remains on building a more durable, modern, and disciplined REGIS.
Speaker #3: One that is positioned to sustain consistent cash generation, improve financial performance, and create long-term value for all stakeholders. Q2 represents continued progress on that journey.
Speaker #3: We are operating with greater precision and sharpening our focus on the execution levers that matter most, despite traffic headwinds across the system. For the second quarter, adjusted EBITDA was $8 million, an increase of $900,000 year over year driven by continued G&A discipline, and contributions from our company-owned Solon portfolio.
Speaker #3: Year to date, adjusted EBITDA of $16 million is up 1.2 million versus the prior year. for the quarter declined Consolidated same-store sales modestly, by 0.10%, importantly, super cuts delivered same-store sales growth of 2% year to date, where consolidated same-store sales 0.4%.
Jim Lain: Importantly, Supercuts delivered same-store sales growth of 2% year to date, where consolidated same-store sales increased 0.4%. We generated $1.5 million of unrestricted cash from operations in Q2 and $3.9 million year to date, reflecting improved operating discipline and cash management. At the same time, traffic remains our most significant challenge and the primary drag on top-line performance. While pricing actions have supported same-store sales, particularly year to date, sustainable traffic improvements remain the central objective of our strategy. Since Q1, our strategy has not changed. What's different is the focus and rigor with which we are executing it. Over the past two quarters, we've zeroed in on the specific enablers that drive effective execution, including tighter organizational alignment, clear leader ownership, disciplined capital deployment, and a sharper focus on adoption and compliance across the system.
Jim Lain: Importantly, Supercuts delivered same-store sales growth of 2% year to date, where consolidated same-store sales increased 0.4%. We generated $1.5 million of unrestricted cash from operations in Q2 and $3.9 million year to date, reflecting improved operating discipline and cash management. At the same time, traffic remains our most significant challenge and the primary drag on top-line performance. While pricing actions have supported same-store sales, particularly year to date, sustainable traffic improvements remain the central objective of our strategy. Since Q1, our strategy has not changed. What's different is the focus and rigor with which we are executing it. Over the past two quarters, we've zeroed in on the specific enablers that drive effective execution, including tighter organizational alignment, clear leader ownership, disciplined capital deployment, and a sharper focus on adoption and compliance across the system.
Speaker #3: We generated $1.5 million of increased unrestricted cash from operations in Q2 and $3.9 million year to date, reflecting improved operating discipline and cash management.
Speaker #3: At the same time, traffic remains our most significant challenge, and the primary drag on top-line performance. While pricing actions have supported same-store sales, particularly year to date, sustainable traffic improvements remain the central objective of our strategy.
Speaker #3: Since Q1, our strategy has not changed. What's different is the we are executing it. Over the past two quarters, we've zeroed in on the specific enablers that drive effective execution.
Speaker #3: Including tighter organizational alignment, clear leader deployment, and a sharper focus on adoption and compliance across the system. We continue to make good progress in our efforts to modernize and transform our flagship brand, Supercuts.
Jim Lain: We continue to make good progress in our efforts to modernize and transform our flagship brand, Supercuts. Highlights include continued improvements in loyalty participation, digital engagement, and execution of brand standards. In December, we launched pilots that will help us evaluate improvements designed to enhance customer digital interaction. As loyalty membership continues to grow, we are further refining our CRM strategy to improve customer retention. As I mentioned earlier, Supercuts delivered same-store sales growth of 2% in the quarter. However, traffic does not yet fully reflect the work underway. Our priorities for the coming quarters are clear: reducing friction, increasing franchisee adoption and compliance, and demonstrating measurable lift through targeted pilots that can be scaled with confidence. Our company-owned salon group continues to be an important strategic asset. For Q2, these salons delivered sales growth of 4.3%.
Jim Lain: We continue to make good progress in our efforts to modernize and transform our flagship brand, Supercuts. Highlights include continued improvements in loyalty participation, digital engagement, and execution of brand standards. In December, we launched pilots that will help us evaluate improvements designed to enhance customer digital interaction. As loyalty membership continues to grow, we are further refining our CRM strategy to improve customer retention. As I mentioned earlier, Supercuts delivered same-store sales growth of 2% in the quarter. However, traffic does not yet fully reflect the work underway. Our priorities for the coming quarters are clear: reducing friction, increasing franchisee adoption and compliance, and demonstrating measurable lift through targeted pilots that can be scaled with confidence. Our company-owned salon group continues to be an important strategic asset. For Q2, these salons delivered sales growth of 4.3%.
Speaker #3: Highlights include continued improvements in loyalty participation, digital engagement, and execution of brand standards. In December, we launched pilots that will help us evaluate improvements designed to enhance customer digital interaction.
Speaker #3: As loyalty membership continues to grow, we are further refining our CRM strategy to improve customer retention. As I mentioned earlier, Supercuts delivered same-store sales growth of 2% in the quarter.
Speaker #3: However, traffic does not yet fully reflect the work underway. Our priorities for the coming quarters are clear. Reducing friction, increasing franchisee adoption and compliance, and demonstrating measurable lift through targeted pilots that can be scaled with confidence.
Speaker #3: Our company-owned Solon Group continues to be an important strategic asset. For Q2, these Solons delivered sales growth of 4.3%. As we noted in Q1, we introduced a new stylus pay plan designed to support a more productivity-driven operating model.
Jim Lain: As we noted in Q1, we introduced a new stylists pay plan designed to support a more productivity-driven operating model. As with any significant change, early implementation insights highlighted areas for refinement, and the timing of pricing actions created some near-term margin pressure. During Q2, we moved quickly to implement targeted actions, including service pricing adjustments and the rollout of a labor optimization tool. While still early, we are beginning to see improved alignment with our margin expectations. The trajectory of performance is improving, and importantly, this group of salons is increasingly positioned to serve as a center of excellence, testing, learning, and refining operating practices that can inform the broader franchise system. Across our portfolio of brands, we are taking deliberate steps to strengthen performance and drive long-term value.
Jim Lain: As we noted in Q1, we introduced a new stylists pay plan designed to support a more productivity-driven operating model. As with any significant change, early implementation insights highlighted areas for refinement, and the timing of pricing actions created some near-term margin pressure. During Q2, we moved quickly to implement targeted actions, including service pricing adjustments and the rollout of a labor optimization tool. While still early, we are beginning to see improved alignment with our margin expectations. The trajectory of performance is improving, and importantly, this group of salons is increasingly positioned to serve as a center of excellence, testing, learning, and refining operating practices that can inform the broader franchise system. Across our portfolio of brands, we are taking deliberate steps to strengthen performance and drive long-term value.
Speaker #3: As with any significant change, early implementation insights and the timing of pricing actions created highlighted areas for refinement, some near-term margin pressure. During the second quarter, we moved quickly to implement service pricing adjustments and the targeted actions, including rollout of a labor optimization tool.
Speaker #3: While still early, we are beginning to see improved alignment with our margin expectations. The trajectory of performance is improving, and importantly, this group of Solons is increasingly positioned to serve as a center of excellence, testing, learning, and refining operating practices that can inform the broader franchise system.
Speaker #3: Across our portfolio of brands, we are taking deliberate steps to strengthen performance and drive long-term value. While smart style continues to face more pronounced brands, we are approaching this with a disciplined and proactive performance challenges relative to other mindset focused on stabilization and improvement.
Jim Lain: While SmartStyle continues to face more pronounced performance challenges relative to other brands, we are approaching this with a disciplined and proactive mindset focused on stabilization and improvement. Stepping back, our objective across our entire portfolio is not to make every brand the same, but to ensure they operate on a common operational and digital backbone. This allows each brand to retain its unique customer proposition while benefiting from shared capabilities that reduce complexity and cost. Our multi-brand portfolio is a meaningful asset for Regis, enabling us to reach different geographies and consumer segments effectively while operating with greater discipline and efficiency underneath. Technology remains a critical enabler of our strategy, and we are making steady progress across key initiatives. In the near term, we are focused on more effectively leveraging and integrating our POS platform to help drive traffic and improve the overall guest experience.
Jim Lain: While SmartStyle continues to face more pronounced performance challenges relative to other brands, we are approaching this with a disciplined and proactive mindset focused on stabilization and improvement. Stepping back, our objective across our entire portfolio is not to make every brand the same, but to ensure they operate on a common operational and digital backbone. This allows each brand to retain its unique customer proposition while benefiting from shared capabilities that reduce complexity and cost. Our multi-brand portfolio is a meaningful asset for Regis, enabling us to reach different geographies and consumer segments effectively while operating with greater discipline and efficiency underneath. Technology remains a critical enabler of our strategy, and we are making steady progress across key initiatives. In the near term, we are focused on more effectively leveraging and integrating our POS platform to help drive traffic and improve the overall guest experience.
Speaker #3: Stepping back, our objective across our entire portfolio is not to make every brand the same, but to ensure they operate on a common, operational, and digital backbone.
Speaker #3: This allows each brand to retain its unique customer proposition while benefiting from shared capabilities that reduce complexity and cost. Our multi-brand portfolio is a meaningful asset for REGIS.
Speaker #3: Enabling us to reach different geographies, and consumer segments effectively, while operating with greater discipline and efficiency underneath. Technology remains a
Speaker #1: A enabler of critical strategy , and we making steady are progress key initiatives in the across term . We focused on motives are .
Speaker #1: In the near term . on more near leveraging focused integrating our We are and POS to help drive and improve the traffic This guest experience .
Jim Lain: This includes targeted enhancements to guest-facing digital capabilities ahead of the service, most notably booking and loyal connectivity. In parallel, we are defining a longer-term modernization roadmap designed to support scale, personalization, and a unified guest identity across our brands. Loyalty and CRM continue to show promise, particularly in driving repeat visits and increasing engagement. While gains are incremental today, these platforms are foundational capabilities to unlocking greater frequency and utilization over time. We are also taking a disciplined, forward-looking approach to AI. An AI task force has been established with a clearly defined charter, ensuring the responsible and productive use of AI across the organization. Our focus is practical, leveraging AI to improve process efficiency, enhance data analysis, and support better decision-making across our portfolio of brands.
Jim Lain: This includes targeted enhancements to guest-facing digital capabilities ahead of the service, most notably booking and loyal connectivity. In parallel, we are defining a longer-term modernization roadmap designed to support scale, personalization, and a unified guest identity across our brands. Loyalty and CRM continue to show promise, particularly in driving repeat visits and increasing engagement. While gains are incremental today, these platforms are foundational capabilities to unlocking greater frequency and utilization over time. We are also taking a disciplined, forward-looking approach to AI. An AI task force has been established with a clearly defined charter, ensuring the responsible and productive use of AI across the organization. Our focus is practical, leveraging AI to improve process efficiency, enhance data analysis, and support better decision-making across our portfolio of brands.
Speaker #1: overall to targeted guest digital facing includes ahead capabilities service . Most notably booking and loyal connectivity . In defining we are parallel , a term longer modernization roadmap designed to support scale personalization and unified identity guest across our brands .
Speaker #1: Loyalty and CRM continue to show promise , particularly in repeat driving visits and increasing engagement , while gains are incremental . Today , these platforms are foundational capabilities to unlocking greater frequency and utilization time over We are also a .
Speaker #1: taking forward looking approach to AI . has been An AI task force established with a clearly defined ensuring the charter productive use of AI across the responsible and organization .
Speaker #1: focus is Our practical , leveraging AI to improve process efficiency analysis , , enhanced data decision better support and making brands across our portfolio of .
Jim Lain: We are taking actions required to position Regis for its next phase, simplifying the organization, tightening leadership scope, and reallocating resources toward the highest impact priorities. This is not change for change's sake. It's about ensuring Regis is structurally prepared to execute with greater speed, clarity, and accountability. As we move through the back half of fiscal 2026, our priorities are clear: stabilizing traffic through increased adoption of our initiatives, maintaining disciplined cost and cash management, strengthening the operational and digital foundation across our brands, and building credibility through execution, not just ambition. While there is still work ahead, we are encouraged by the progress we're making in profitability, cash generation, and organizational focus, which gives us confidence in the path forward. I want to thank our franchisees, our stylists, and team members for the resilience and commitment.
Jim Lain: We are taking actions required to position Regis for its next phase, simplifying the organization, tightening leadership scope, and reallocating resources toward the highest impact priorities. This is not change for change's sake. It's about ensuring Regis is structurally prepared to execute with greater speed, clarity, and accountability. As we move through the back half of fiscal 2026, our priorities are clear: stabilizing traffic through increased adoption of our initiatives, maintaining disciplined cost and cash management, strengthening the operational and digital foundation across our brands, and building credibility through execution, not just ambition. While there is still work ahead, we are encouraged by the progress we're making in profitability, cash generation, and organizational focus, which gives us confidence in the path forward. I want to thank our franchisees, our stylists, and team members for the resilience and commitment.
Speaker #1: We are taking actions required to Regis for its next phase . Simplifying the position organization . Tightening leadership scope and reallocating resources toward the highest impact priorities .
Speaker #1: This is not change for sake change's . It's about ensuring Regis is prepared to structurally with greater speed , clarity and accountability as we move through back the half of fiscal 2026 , our priorities are clear stabilizing traffic through increased adoption of our initiatives , maintaining disciplined cost and cash management , strengthening the operational and digital foundation across our brands , and building credibility through not just ambition execution , .
Speaker #1: still work we are ahead , While there is encouraged by the progress we're making in profitability , cash generation and organizational focus , which gives us confidence in the path forward .
Speaker #1: I want franchisees , our their resilience and stylists and . Together , we are team members for building a more focused , more disciplined and modern more .
Jim Lain: Together, we are building a more focused, more disciplined, and more modern Regis. With that, I'll turn the call over to Kerstin to walk through the financial results in more detail.
Jim Lain: Together, we are building a more focused, more disciplined, and more modern Regis. With that, I'll turn the call over to Kerstin to walk through the financial results in more detail.
Speaker #1: With that , I'll turn the call over to Kirsten to walk through the financial results in more detail .
Kersten Zupfer: Thanks, Jim. As a reminder, the company's acquisition of approximately 300 salons from Align closed on 19 December 2024. Consequently, our results for the fiscal second quarter ending 31 December 2025 include a full period of contribution from those salons, while the prior year quarter included less than two weeks of contribution, which affects year-over-year comparability. As Jim discussed, our fiscal 2026 second quarter results reflect ongoing progress in executing our transformation strategy. While this work will take time, our fiscal second quarter results demonstrate continued strengthening of Regis's financial performance, supported by improving brand-level performance and advancement of the initiatives that will drive long-term profitable and sustainable growth. For the second quarter, we delivered a 13% increase in GAAP operating income, $8 million in consolidated Adjusted EBITDA, and generated positive cash from operations for the fifth consecutive quarter.
Kersten Zupfer: Thanks, Jim. As a reminder, the company's acquisition of approximately 300 salons from Align closed on 19 December 2024. Consequently, our results for the fiscal second quarter ending 31 December 2025 include a full period of contribution from those salons, while the prior year quarter included less than two weeks of contribution, which affects year-over-year comparability. As Jim discussed, our fiscal 2026 second quarter results reflect ongoing progress in executing our transformation strategy. While this work will take time, our fiscal second quarter results demonstrate continued strengthening of Regis's financial performance, supported by improving brand-level performance and advancement of the initiatives that will drive long-term profitable and sustainable growth. For the second quarter, we delivered a 13% increase in GAAP operating income, $8 million in consolidated Adjusted EBITDA, and generated positive cash from operations for the fifth consecutive quarter.
Speaker #2: Jim . Thanks , As a reminder , the company's of approximately 300 salons from a line acquisition closed on December 19th , 2020 , for .
Speaker #2: Consequently , our results for the fiscal second quarter ending December 31st , 2025 include a full period of contribution from prior while the salons , year quarter included less than two weeks of contribution , which affects year over year comparability .
Speaker #2: As Jim discussed , our fiscal 2026 second quarter results reflect ongoing progress in executing our transformation strategy . While this work will take time , our fiscal results second quarter demonstrate continued strengthening of financial performance , supported by improving brand performance advancement of the and initiatives that will long drive , profitable and term sustainable growth .
Speaker #2: For the second quarter , we delivered 13% increase a in GAAP operating income , $8 million in consolidated adjusted EBITDA , and generated positive cash from operations for consecutive the fifth quarter .
Kersten Zupfer: Total second quarter revenue was $57.1 million, an increase of 22.3% or $10.4 million compared to the prior year. This increase was primarily driven by increased revenue from company-owned salons resulting from the acquisition of Align in December 2024. This increase was partially offset by lower royalties, fees, and non-margin franchise rental income. As of 31 December 2025, we had a net decrease of 374 franchise locations compared to 31 December 2024. Of the 374 franchise locations that closed since last December, 96 were in the six months ended 31 December 2025. We believe closures in the second half of fiscal year 2026 will be in the same range as the first half of fiscal 2026. The closures year over year primarily involved underperforming stores with much lower trailing 12-month sales than our top-performing units.
Kersten Zupfer: Total second quarter revenue was $57.1 million, an increase of 22.3% or $10.4 million compared to the prior year. This increase was primarily driven by increased revenue from company-owned salons resulting from the acquisition of Align in December 2024. This increase was partially offset by lower royalties, fees, and non-margin franchise rental income. As of 31 December 2025, we had a net decrease of 374 franchise locations compared to 31 December 2024. Of the 374 franchise locations that closed since last December, 96 were in the six months ended 31 December 2025. We believe closures in the second half of fiscal year 2026 will be in the same range as the first half of fiscal 2026. The closures year over year primarily involved underperforming stores with much lower trailing 12-month sales than our top-performing units.
Speaker #2: Total second quarter revenue was $57.1 million , an increase of 22.3% , or $10.4 million , compared to the prior year . This increase was primarily driven by increased company owned salons from the revenue from acquisition of a line in December of 2024 .
Speaker #2: resulting increase was partially offset by lower , lower royalties and fees , and non margin franchise rental . income As of December 31st , 2025 , we had a net decrease of locations 374 franchise compared December 31st of 2024 .
Speaker #2: Of the 374 franchise locations that closed to last December , since 96 were in the ended December 31st , six months believe 2025 .
Speaker #2: the second half closures in of fiscal year 2026 will be in the same range as the first half of 2026 . closures year The over year primarily involved underperforming stores with much lower trailing 12 month sales than our top performing The gap between those stores and units .
Kersten Zupfer: The gap between those stores and our highest performers was approximately $350,000, highlighting both the strong potential in our system and the opportunity to further enhance profitability and cash flow as we continue executing our transformation strategy. We reported GAAP operating income of $6.2 million, an increase of $0.7 million compared to $5.5 million in the year-ago quarter. This increase was primarily driven by operating income contribution from the company-owned segment, which includes the salons from the Align acquisition, and continued cost management discipline, which was partially offset by one-time professional fee expenses associated with the Align acquisition in the prior year, and salon closures. Income from continuing operations was around $456,000 compared to $206,000 in the year-ago quarter. The year-over-year improvement was primarily driven by an increase in company-owned salon contribution and reductions in G&A expenses, which was partially offset by lower contribution from higher-margin royalty revenue.
Kersten Zupfer: The gap between those stores and our highest performers was approximately $350,000, highlighting both the strong potential in our system and the opportunity to further enhance profitability and cash flow as we continue executing our transformation strategy. We reported GAAP operating income of $6.2 million, an increase of $0.7 million compared to $5.5 million in the year-ago quarter. This increase was primarily driven by operating income contribution from the company-owned segment, which includes the salons from the Align acquisition, and continued cost management discipline, which was partially offset by one-time professional fee expenses associated with the Align acquisition in the prior year, and salon closures. Income from continuing operations was around $456,000 compared to $206,000 in the year-ago quarter. The year-over-year improvement was primarily driven by an increase in company-owned salon contribution and reductions in G&A expenses, which was partially offset by lower contribution from higher-margin royalty revenue.
Speaker #2: our highest performers was approximately $350,000 , highlighting both the potential in and the strong our to further enhance profitability and cash flow as we continue executing our transformation strategy , we reported GAAP system operating income of an of compared to increase ago quarter .
Speaker #2: $0.7 million This $6.2 million , increase was primarily by operating driven income contribution from the company owned segment , which includes salons from align the and continued cost discipline , which was partially fee professional offset by one time expenses associated align acquisition in the with the prior year , and salon closures .
Speaker #2: Income from continuing operations was around $456,000 , compared to $206,000 in the year ago quarter . The year over year improvement was primarily increase in company owned salon contribution and reductions in G&A which expenses , was offset by partially lower contribution from higher margin revenues .
Kersten Zupfer: The increase in both operating income and income from continuing operations reflects positive same-store sales performance at Supercuts and our company-owned salons, as well as disciplined cost management. Turning to our adjusted results. As a reminder, our adjusted results exclude stock-based compensation expense. We believe this provides a clearer view of our underlying business performance. A reconciliation of our GAAP to non-GAAP results is included in our press release. For the second quarter, our consolidated Adjusted EBITDA was $8 million, an increase of 11.9% compared to $7.1 million in the prior year quarter. The improvement was primarily driven by the EBITDA contribution from the acquired company-owned salons and lower G&A expenses, which was partially offset by lower franchise royalties and non-cash fee recognition. Our adjusted G&A was $9.8 million in the second quarter of fiscal year 2026, up from $9.6 million in the year-ago quarter.
Kersten Zupfer: The increase in both operating income and income from continuing operations reflects positive same-store sales performance at Supercuts and our company-owned salons, as well as disciplined cost management. Turning to our adjusted results. As a reminder, our adjusted results exclude stock-based compensation expense. We believe this provides a clearer view of our underlying business performance. A reconciliation of our GAAP to non-GAAP results is included in our press release. For the second quarter, our consolidated Adjusted EBITDA was $8 million, an increase of 11.9% compared to $7.1 million in the prior year quarter. The improvement was primarily driven by the EBITDA contribution from the acquired company-owned salons and lower G&A expenses, which was partially offset by lower franchise royalties and non-cash fee recognition. Our adjusted G&A was $9.8 million in the second quarter of fiscal year 2026, up from $9.6 million in the year-ago quarter.
Speaker #2: The increase in both operating income and income royalty from continuing operations reflects positive same-store sales performance at Supercuts and our company-owned salons, as well as disciplined cost management.
Speaker #2: Turning to our adjusted results . As a reminder , our adjusted results exclude stock based compensation expense . We believe provides a clearer view of our underlying business performance .
Speaker #2: A reconciliation of our GAAP to is results non-GAAP included in our press release quarter . Our for the second adjusted consolidated this was $8 million , an EBITDA increase of 11.9% compared $7.1 million in the prior year to quarter .
Speaker #2: improvement was primarily driven by the EBITDA contribution from acquired the company owned salons and G&A lower expenses , which was partially offset by lower royalties and non-cash fee recognition .
Speaker #2: Our adjusted G&A was $9.8 million in the second quarter of fiscal up year 2026 , from $9.6 million in the year ago quarter .
Kersten Zupfer: The slight increase resulted from G&A associated with our additional company-owned salons, partially offset by lower corporate G&A expenses resulting from our continued focus on disciplined cost management. Adjusted EBITDA for our franchise segment was $6.2 million in the quarter, a $173,000 decrease compared to $6.4 million in the prior year quarter. This decrease was primarily due to lower royalties and non-cash fees in the current period, which were partially offset by lower G&A expenses. Franchise adjusted EBITDA as a percentage of franchise revenue was 16.5%, up from 14.8% in the year-ago quarter. Adjusted EBITDA for our company-owned salon segment improved by $1.1 million year-over-year to $1.8 million for the quarter, primarily as a result of increased number of company-owned salons, which were acquired in December of 2024. Turning to cash flows.
Kersten Zupfer: The slight increase resulted from G&A associated with our additional company-owned salons, partially offset by lower corporate G&A expenses resulting from our continued focus on disciplined cost management. Adjusted EBITDA for our franchise segment was $6.2 million in the quarter, a $173,000 decrease compared to $6.4 million in the prior year quarter. This decrease was primarily due to lower royalties and non-cash fees in the current period, which were partially offset by lower G&A expenses. Franchise adjusted EBITDA as a percentage of franchise revenue was 16.5%, up from 14.8% in the year-ago quarter. Adjusted EBITDA for our company-owned salon segment improved by $1.1 million year-over-year to $1.8 million for the quarter, primarily as a result of increased number of company-owned salons, which were acquired in December of 2024. Turning to cash flows.
Speaker #2: The slight increase a resulted from with our additional company partially offset lower by corporate associated G&A expenses resulting from our continued focus on disciplined cost management .
Speaker #2: Adjusted EBITDA for our franchise segment owned was quarter , decrease compared $173,000 to $6.4 million in the prior year . quarter $6.2 million in the This primarily due to .
Speaker #2: Lower royalties and the decrease was in the current period, which were non-cash fees offset partially by lower expenses. Franchise adjusted EBITDA as a percentage of franchise revenue was 16.5%, up from 14.8% in the year-ago quarter.
Speaker #2: Adjusted EBITDA for our owned company salon segment improved by $1.1 million year over year $1.8 million for the quarter , primarily as a increased number of company owned salons , which result of December of 2020 .
Speaker #2: For turning cash to flows, for the six months ended December 31, 2025, we generated $3.9 million in cash from operations, which is an improvement of $3.1 million compared to the $787,000 in the prior year period.
Kersten Zupfer: For the six months ended 31 December 2025, we generated $3.9 million in cash from operations, which is an improvement of $3.1 million compared to the $787,000 in the prior year period. The increase in cash generation was driven by impacts from the Align acquisition. As a reminder, when evaluating our reported cash flows, we believe it's important to understand the cash flows are derived from two sources: unrestricted cash from operations, which is available for general corporate use, and restricted cash related to our Ad fund, which is sourced from the contributions made by our salons, both franchise and company-owned. Ad fund cash is designated specifically for marketing purposes and is not available for corporate use.
Kersten Zupfer: For the six months ended 31 December 2025, we generated $3.9 million in cash from operations, which is an improvement of $3.1 million compared to the $787,000 in the prior year period. The increase in cash generation was driven by impacts from the Align acquisition. As a reminder, when evaluating our reported cash flows, we believe it's important to understand the cash flows are derived from two sources: unrestricted cash from operations, which is available for general corporate use, and restricted cash related to our Ad fund, which is sourced from the contributions made by our salons, both franchise and company-owned. Ad fund cash is designated specifically for marketing purposes and is not available for corporate use.
Speaker #2: The increase in cash by impacts from generation was the driven align acquisition . As a when reminder , evaluating our reported cash we believe important to it's understand the flows , flows are from derived cash from unrestricted cash two sources operations , which available for general is use , and restricted cash related to our ad fund , which sourced from the contributions made by our salons , both franchise and owned company ad fund .
Speaker #2: is Cash designated specifically for marketing purposes and is not available for corporate . For the first months of fiscal six year 2026 , our total reported use operations cash from $3.9 million includes $200,000 of cash used for the ad funds , which is restricted , and $4.2 million in cash generated from our core operations , which is unrestricted .
Kersten Zupfer: For the first six months of fiscal year 2026, our total reported cash from operations of $3.9 million includes $200,000 of cash used for the ad funds, which is restricted, and $4.2 million in cash generated from our core operations, which is unrestricted. The business continues to generate positive cash from operations, providing a strong foundation for growth and financial flexibility. For fiscal year 2026, we continue to anticipate a meaningful increase in unrestricted cash generated from our core operations compared to fiscal year 2025. This expected improvement is supported by continued operational strength, a full year of acquired company-owned salon results, and the absence of one-time expenses we experienced last fiscal year. Additionally, working capital improvements are expected to further enhance cash generation from our core business.
Kersten Zupfer: For the first six months of fiscal year 2026, our total reported cash from operations of $3.9 million includes $200,000 of cash used for the ad funds, which is restricted, and $4.2 million in cash generated from our core operations, which is unrestricted. The business continues to generate positive cash from operations, providing a strong foundation for growth and financial flexibility. For fiscal year 2026, we continue to anticipate a meaningful increase in unrestricted cash generated from our core operations compared to fiscal year 2025. This expected improvement is supported by continued operational strength, a full year of acquired company-owned salon results, and the absence of one-time expenses we experienced last fiscal year. Additionally, working capital improvements are expected to further enhance cash generation from our core business.
Speaker #2: The business continues to generate positive cash from operations , providing a strong foundation for growth and financial flexibility for fiscal year 2026 , we continue to anticipate a meaningful increase in unrestricted cash generated from our core compared to operations fiscal 2025 .
Speaker #2: year This expected improvement is supported by continued operational strength , a full year of acquired company owned salon results , and the absence of one time expenses .
Speaker #2: We experienced last fiscal year . Additionally , working capital improvements are expected to further enhance cash our core generation from and fund cash , which is designated specifically for marketing purposes and not available for corporate Built up use .
Kersten Zupfer: Ad fund cash, which is designated specifically for marketing purposes and not available for corporate use, built up over fiscal year 2025 as we moderated spending to focus on executing our business transformation strategy. Our marketing plans for fiscal year 2026 anticipate deploying a portion of this accumulated ad fund cash to support initiatives aimed at driving growth. In allocating capital, our priorities remain the same: reinvesting in the business to support growth, maintaining disciplined debt management, and evaluating potential strategic opportunities. Turning to our balance sheet. In terms of liquidity, as of 31 December 2025, we had $27.4 million of available liquidity, including capacity under our revolving credit agreement, and $18.4 million in unrestricted cash and cash equivalents. As of the end of the second fiscal quarter, we had outstanding debt of $126 million, excluding deferred financing costs and the value of warrants plus accrued paid-in-kind interest.
Kersten Zupfer: Ad fund cash, which is designated specifically for marketing purposes and not available for corporate use, built up over fiscal year 2025 as we moderated spending to focus on executing our business transformation strategy. Our marketing plans for fiscal year 2026 anticipate deploying a portion of this accumulated ad fund cash to support initiatives aimed at driving growth. In allocating capital, our priorities remain the same: reinvesting in the business to support growth, maintaining disciplined debt management, and evaluating potential strategic opportunities. Turning to our balance sheet. In terms of liquidity, as of 31 December 2025, we had $27.4 million of available liquidity, including capacity under our revolving credit agreement, and $18.4 million in unrestricted cash and cash equivalents. As of the end of the second fiscal quarter, we had outstanding debt of $126 million, excluding deferred financing costs and the value of warrants plus accrued paid-in-kind interest.
Speaker #2: over fiscal year 2025 . moderated As we spending to focus on executing business strategy transformation , our marketing plans for fiscal year 2026 anticipate deploying portion of this ad cash to fund support at accumulated driving growth allocating capital .
Speaker #2: in Our priorities remain the same , reinvesting in the business to support growth , maintaining a discipline , debt management and evaluating potential strategic opportunities .
Speaker #2: balance Turning sheet . In terms of as of December 31st , 2025 , we had $27.4 million of available including capacity under our liquidity , revolving credit agreement and $18.4 million in unrestricted cash equivalents .
Speaker #2: As of the end of the second fiscal quarter , we had outstanding debt of cash and $126 million , excluding deferred costs and the value of warrants plus financing paid in kind .
Kersten Zupfer: As a reminder, in accordance with GAAP, our balance sheet contains approximately $208 million of operating lease liabilities related to our franchise salon leases. These leases have a weighted average remaining term of less than five years, and the associated obligations are serviced by our franchisees. Provided the franchisees continue to meet their lease payments as they historically have, we believe these amounts should not be considered part of our debt position when evaluating our financial leverage. We expect these liabilities will continue to decrease over time as the leases mature and as we further reduce our use of franchise leases. Lastly, we continue to receive questions from shareholders regarding the potential to refinance our existing debt. While our current interest rate is higher than recent market levels, the economics of refinancing also depend on other terms of the agreement, including prepayment penalties and fees.
Kersten Zupfer: As a reminder, in accordance with GAAP, our balance sheet contains approximately $208 million of operating lease liabilities related to our franchise salon leases. These leases have a weighted average remaining term of less than five years, and the associated obligations are serviced by our franchisees. Provided the franchisees continue to meet their lease payments as they historically have, we believe these amounts should not be considered part of our debt position when evaluating our financial leverage. We expect these liabilities will continue to decrease over time as the leases mature and as we further reduce our use of franchise leases. Lastly, we continue to receive questions from shareholders regarding the potential to refinance our existing debt. While our current interest rate is higher than recent market levels, the economics of refinancing also depend on other terms of the agreement, including prepayment penalties and fees.
Speaker #2: Interest . As reminder , in a accordance with our GAAP , balance sheet contains approximately operating $208 million of liabilities related to our lease franchise .
Speaker #2: leases . These leases have a weighted average remaining term of less than five years , and the associated obligations are serviced by our franchisees the provided franchisees continue to meet their lease payments historically believe have .
Speaker #2: these amounts should not We considered part of our as they debt position . When evaluating our financial these expect leverage , liabilities will to over as the decrease lease is we further time and as reduce our franchise use of leases .
Speaker #2: lastly , we And continue to receive questions from regarding the potential to shareholders refinance our existing debt our current interest rate is recent .
Speaker #2: levels , the higher than economics of also depend While refinancing on other terms of the agreement , including prepayment penalties and fees . Taken together , factors may these make refinancing after the two year anniversary of the agreement in June of 2026 economically viable and in the best interest of our shareholders .
Kersten Zupfer: Taken together, these factors may make refinancing after the two-year anniversary of the agreement in June of 2026 economically viable and in the best interests of our shareholders. In the meantime, I want to assure investors that reducing our debt service remains a top priority. We are speaking with potential partners to explore refinancing options as we near the two-year anniversary of the agreement in June of 2026, and we will keep shareholders informed as things progress. In summary, our fiscal year 2026 second quarter results reflect meaningful progress in strengthening Regis's financial profile. Our Adjusted EBITDA and positive operating cash flows demonstrate the benefits of operating leverage and the contributions from the Align acquisition, while our balance sheet and liquidity position provide flexibility to support our strategic initiatives. This concludes our prepared remarks. We will now open the call to any questions.
Kersten Zupfer: Taken together, these factors may make refinancing after the two-year anniversary of the agreement in June of 2026 economically viable and in the best interests of our shareholders. In the meantime, I want to assure investors that reducing our debt service remains a top priority. We are speaking with potential partners to explore refinancing options as we near the two-year anniversary of the agreement in June of 2026, and we will keep shareholders informed as things progress. In summary, our fiscal year 2026 second quarter results reflect meaningful progress in strengthening Regis's financial profile. Our Adjusted EBITDA and positive operating cash flows demonstrate the benefits of operating leverage and the contributions from the Align acquisition, while our balance sheet and liquidity position provide flexibility to support our strategic initiatives. This concludes our prepared remarks. We will now open the call to any questions.
Speaker #2: meantime , I In the want to assure investors that reducing our debt service remains a top priority . We are speaking with potential partners to explore refinancing options as we near the two year anniversary of the agreement in of 2026 , and we June shareholders as things will keep progress informed .
Speaker #2: In our summary , fiscal year 2026 second quarter results reflect meaningful strengthening financial , reduces profile adjusted positive and operating EBITDA cash . Our demonstrate the benefits of operating leverage and the from the align contributions acquisition .
Speaker #2: While our balance sheet and liquidity position provide flexibility to support our strategic initiatives . This concludes our prepared remarks . We will now open the call to any questions .
Kersten Zupfer: We do have a question from Bill Charters of Sable Capital. Bill, go ahead. Please unmute your line.
Operator: We do have a question from Bill Charters of Sable Capital. Bill, go ahead. Please unmute your line.
Speaker #3: We do have a question from Bill Charters of Sable Capital. Bill, go ahead. Please unmute your line.
Jim Lain: Okay. Can you hear me now?
Will Charters: Okay. Can you hear me now?
Kersten Zupfer: We sure can. Good morning.
Kersten Zupfer: We sure can. Good morning.
Speaker #4: hear me Okay . Can you now
Jim Lain: Good morning. Well, that's great news on the proactive refinancing efforts. I know it's almost 5 months away, but it's good that you're looking at that now. My question is actually on the Align stores. And what is your initiative to improve performance there? Is it pricing? If you could just elaborate on that, that'd be great.
Jim Lain: Good morning. Well, that's great news on the proactive refinancing efforts. I know it's almost 5 months away, but it's good that you're looking at that now. My question is actually on the Align stores. And what is your initiative to improve performance there? Is it pricing? If you could just elaborate on that, that'd be great.
Speaker #4: , Ken ? Good
Speaker #3: morning .
Speaker #3: morning line
Speaker #4: morning . Well , that's great news on the proactive refinancing efforts . I know it's , you know , almost five months away , but that it's good you're looking that now , my question is , actually on the line stores .
Speaker #4: And your what is initiative to improve performance ? There . Is it is it pricing could just ? elaborate on that , If you that'd be great .
Speaker #4: And your what is initiative to improve performance ? There . Is it is it pricing could just ? elaborate on that , If you that'd be
Jim Lain: Yeah. Hi, Bill. This is Jim. Thanks for the question. Thanks for joining today. Yeah, this has been one that I've been particularly involved with for the last many months. There's really three components to what we're doing. First off is a refinement of the pay plan itself. I'm no stranger to pay plans in our business, and this particular pay plan needed a bit of tweaking, to put it kind of in simplistic terms. And we've made some what I think to be pretty solid, meaningful adjustments without any kind of massive impact at all to the stylist. Second component is pricing. I think we were a bit slow early this past year in terms of taking price, and we've caught that up. We took further price adjustments in early December.
Jim Lain: Yeah. Hi, Bill. This is Jim. Thanks for the question. Thanks for joining today. Yeah, this has been one that I've been particularly involved with for the last many months. There's really three components to what we're doing. First off is a refinement of the pay plan itself. I'm no stranger to pay plans in our business, and this particular pay plan needed a bit of tweaking, to put it kind of in simplistic terms. And we've made some what I think to be pretty solid, meaningful adjustments without any kind of massive impact at all to the stylist. Second component is pricing. I think we were a bit slow early this past year in terms of taking price, and we've caught that up. We took further price adjustments in early December.
Speaker #1: Yeah . Hi , Bill . This is Jim . Thanks question . joining today for the . Yeah , this has been one that I've been particularly involved with for the last many months .
Speaker #1: There's really three components to what to we're doing First off is refinement . of the pay plan I'm no stranger to plans . itself .
Speaker #1: pay And this particular business . needed a tweaking to pay put it in simplistic kind of plan , and we've made some what I think to be pretty solid , meaningful adjustments any kind of without massive impact to , to to the stylist at all .
Speaker #1: Second component pricing . I think we is bit slow early this past year in terms of taking price , and we've caught that up .
Speaker #1: We took a further price adjustments early in December , and then the part about important pricing , when you take price with a pay plan is that you adjust tiers , the associated commensurate tiers .
Jim Lain: And then the important part about pricing when you take price with a pay plan is that you adjust the associated tiers, the commensurate tiers, so that it's all kind of going up equally together. That ensures that you maintain the appropriate margins in terms of the pay plan itself versus labor. And then lastly, what I will call labor optimization. You heard me talk in my narrative about the early steps we're taking with AI, and we've done some good work here. This is probably one of the first notable steps we've taken where we've leveraged the machine learning to help us, as an example, dumping in data in terms of sales by hour, so call it day parts, so that we better understand where we're overstaffed on stylist or understaffed on stylist. And one of the first things that really popped for us was where we were overstaffed.
Jim Lain: And then the important part about pricing when you take price with a pay plan is that you adjust the associated tiers, the commensurate tiers, so that it's all kind of going up equally together. That ensures that you maintain the appropriate margins in terms of the pay plan itself versus labor. And then lastly, what I will call labor optimization. You heard me talk in my narrative about the early steps we're taking with AI, and we've done some good work here. This is probably one of the first notable steps we've taken where we've leveraged the machine learning to help us, as an example, dumping in data in terms of sales by hour, so call it day parts, so that we better understand where we're overstaffed on stylist or understaffed on stylist. And one of the first things that really popped for us was where we were overstaffed.
Speaker #1: the so that So , it's all kind of going up equally together , that ensures that that you maintain the appropriate margins in terms of the pay plan itself versus labor .
Speaker #1: And then lastly , what I will call labor optimization . talk in You heard me narrative about the early steps taking we're with AI .
Speaker #1: And we've done some good work here . This is probably one of the first notable steps we've taken where we've levered the machine learning to help us .
Speaker #1: You know, as an example, dumping data in terms of sales by, so call it, dayparts, so that we better understand where we're overstaffed on stylists or understaffed on stylists.
Speaker #1: And one of the first things that really for us popped was where we were overstaffed so moving , . those moving And stylists accordingly with the business is , is really the kind of the ultimate output of this labor optimization tool .
Jim Lain: And so moving those stylists accordingly with the business is really kind of the ultimate output of this labor optimization tool. It's early. I like what I see so far with it, but I think it's going to take the rest of the quarter that we're in to get a better understanding and where that might need to be tweaked. So listen, overall, I'm encouraged by what I'm seeing so far, and we're going to continue to stay very, very close to it.
Jim Lain: And so moving those stylists accordingly with the business is really kind of the ultimate output of this labor optimization tool. It's early. I like what I see so far with it, but I think it's going to take the rest of the quarter that we're in to get a better understanding and where that might need to be tweaked. So listen, overall, I'm encouraged by what I'm seeing so far, and we're going to continue to stay very, very close to it.
Speaker #1: It's early . I like what I see so far with it , but I going to take the think it's rest of the of that we're in to get a quarter better understanding of where that might need to might , be tweaked .
Speaker #1: So listen , overall , I'm encouraged by what I'm seeing so far . And we're going to continue to stay very , very close to it
Jim Lain: Okay. Great. One other thing, just in the stores, I think it was last fiscal year, maybe the store closures were 200. So far this year, maybe 100 closures, and you kind of guided for another 100. So if you look at apples to apples with the Align stores going to company-owned from franchise, that is about a 50% reduction. Is that right from the previous fiscal year?
Will Charters: Okay. Great. One other thing, just in the stores, I think it was last fiscal year, maybe the store closures were 200. So far this year, maybe 100 closures, and you kind of guided for another 100. So if you look at apples to apples with the Align stores going to company-owned from franchise, that is about a 50% reduction. Is that right from the previous fiscal year?
Speaker #4: Great
Speaker #4: . . Okay . One other thing . Just in the stores , I think it was like last fiscal it maybe the store was closures were 200 so far this year , maybe year , 100 closures .
Speaker #4: And you kind of guided for another 100 . So if you look at apples to apples with the aligned going stores to company owned from franchise , that is about 50% reduction , is that right ?
Speaker #4: From the previous fiscal ?
Kersten Zupfer: Yeah, that's about right. You mean reduction from half of the amount of closures that we had last year? Is that what you're saying?
Kersten Zupfer: Yeah, that's about right. You mean reduction from half of the amount of closures that we had last year? Is that what you're saying?
Speaker #3: Yeah , that that's about right . Just you mean reduction
Speaker #3: half of the half of the amount of closures that we had last year year ? Is that what you're saying ? Yes , yes .
Jim Lain: Yes. Yes. Yes. Yeah. That's said properly, Bill. Yeah.
Will Charters: Yes.
Jim Lain: Yes. Yes. Yeah. That's said properly, Bill. Yeah.
Speaker #1: Yes . Yeah . That's right . That's said Bill .
Jim Lain: Okay. Okay. Great. Okay. That was all I had. Thank you.
Will Charters: Okay. Okay. Great. Okay. That was all I had. Thank you.
Speaker #4: Yeah okay . Okay . Great . That Okay . was all I had . Thank you .
Speaker #4: Yeah okay . Okay . Great . That Okay . was all I had . Thank you .
Jim Lain: Thank you.
Jim Lain: Thank you.
Kersten Zupfer: We did get one more question in the Q&A feature, and I'll just read it and respond. "Can you share any preliminary high-level feedback you're getting from potential replacement lenders on what rates you might get as a much more stable system with better leverage ratios?" I'd love to be able to answer that at this point, but unfortunately, I can't really share anything more on rates or discussions we've been having. But know that we are having initial conversations with potential advisors, and as we can share more information, we definitely will.
Kersten Zupfer: We did get one more question in the Q&A feature, and I'll just read it and respond. "Can you share any preliminary high-level feedback you're getting from potential replacement lenders on what rates you might get as a much more stable system with better leverage ratios?" I'd love to be able to answer that at this point, but unfortunately, I can't really share anything more on rates or discussions we've been having. But know that we are having initial conversations with potential advisors, and as we can share more information, we definitely will.
Speaker #1: .
Speaker #3: did get one more question in Thank the
Speaker #3: Q&A I'll just read feature . it and respond . Can you share any preliminary level feedback high from potential replacement lenders on what rates get as a much more stable system with better leverage ratios properly ?
Speaker #3: love to be I'd able to answer that at this point , .
Speaker #2: can't really share Unfortunately I
Speaker #2: more on but rates anything or discussions . been We've having . But but know that we are having initial with potential conversations advisors , and as we can share more we information , definitely will .
Jim Lain: Yeah. Another question has come in. "Can you walk through major new insights or initiatives from awareness to consideration to store visit to retention to address foot traffic goals?" And if I'm following the question correctly, yeah, if you listen kind of what I walked through in the narrative, the loyalty component, obviously, in Supercuts is a big driver, and we're continuing to see loyalty membership increase. With that, we stay highly focused on a group of what I would call lead measures with the ultimate lag measure being the impact on traffic. And there's several components there. One is top of funnel, middle funnel, bottom funnel, paid media, driving customer acquisition, and then getting the customer in our door and then maintaining the stickiness with that customer. And that's where the CRM and the loyalty come into play.
Jim Lain: Yeah. Another question has come in. "Can you walk through major new insights or initiatives from awareness to consideration to store visit to retention to address foot traffic goals?" And if I'm following the question correctly, yeah, if you listen kind of what I walked through in the narrative, the loyalty component, obviously, in Supercuts is a big driver, and we're continuing to see loyalty membership increase. With that, we stay highly focused on a group of what I would call lead measures with the ultimate lag measure being the impact on traffic. And there's several components there. One is top of funnel, middle funnel, bottom funnel, paid media, driving customer acquisition, and then getting the customer in our door and then maintaining the stickiness with that customer. And that's where the CRM and the loyalty come into play.
Speaker #1: Yeah , another come in question has walk . Can you through major new insights or initiatives from awareness to consideration visit to to store retention , to address traffic foot And if following the I'm correctly question there's if you listen kind of kind of what I walked through in the , yeah , The narrative .
Speaker #1: loyalty component obviously in Supercuts a big driver and we're is continuing to see loyalty , membership increase with that . We stay highly on focused a group of what I would call lead measures .
Speaker #1: With the lag , the ultimate lag measure being the on impact traffic . And there are several there . components One is , you know , top of funnel , middle funnel , funnel , paid bottom media driving customer acquisition , and then getting the customer in our door and then maintaining the stickiness with customer .
Speaker #1: And that's where the CRM and the loyalty come into play . Data as such But online booking , we look at very , very closely .
Jim Lain: But data such as online booking, 90-day customer retention, and transactions with a valid email, we look at very, very closely. Those are all of the things that I consider to be important lead measures. And again, the primary drivers, the resources, the tools we're using and leaning into is paid media, and we continue to improve and tighten our execution there, as well as loyalty, the kind of offers that we have, and down the road, what I would call gamification in that particular arena. And then, of course, the whole idea of 90-day customer retention and what we're doing to maintain that stickiness.
Jim Lain: But data such as online booking, 90-day customer retention, and transactions with a valid email, we look at very, very closely. Those are all of the things that I consider to be important lead measures. And again, the primary drivers, the resources, the tools we're using and leaning into is paid media, and we continue to improve and tighten our execution there, as well as loyalty, the kind of offers that we have, and down the road, what I would call gamification in that particular arena. And then, of course, the whole idea of 90-day customer retention and what we're doing to maintain that stickiness.
Speaker #1: 90 day customer retention transactions valid email with a all of . Those are the things that I consider to be important . Lead measures .
Speaker #1: And again , the primary drivers , the resources , the tools we're using and leaning into is paid media . And we continue to improve and and tighten our execution .
Speaker #1: There , as well as loyalty . The kind of offers that we have and down the road , what I would call gamification in that particular arena .
Speaker #1: And then , of course , you know , the whole the whole idea of 90 day retention customer and what we're doing to to maintain that stickiness .
Kersten Zupfer: We did get a couple more questions that came through the Q&A. I'll combine these two questions from the same individual. "Are you planning to add Cost Cutters locations, and why is loyalty adoption lagging in SmartStyle Cost Cutters?
Kersten Zupfer: We did get a couple more questions that came through the Q&A. I'll combine these two questions from the same individual. "Are you planning to add Cost Cutters locations, and why is loyalty adoption lagging in SmartStyle Cost Cutters?
Speaker #2: We couple more did get a questions that came in through Q&A the . I'll these two the questions from same , same individual .
Speaker #2: Are you planning to add Cost Cutters locations, and why is loyalty adoption lagging at SmartStyle and Cost Cutters?
Jim Lain: Yeah. So first off, Cost Cutters locations, there isn't an all-out effort to add Cost Cutters locations. However, there are some Cost Cutters locations that are coming online really as we speak right now in an area where a franchisee has found the ability to go over an old haircutting business and has converted that business. That business is now defunct. And the owner of a Supercuts brand for us has gone in and been able to convert those to Cost Cutters, providing kind of a cool approach where we've got the two brands now in a given DMA and able to grow instead of growing the Supercuts brand where it didn't make sense, we can bring in the Cost Cutters brand and fill in appropriately and productively. So I'm encouraged by that. And then in terms of loyalty adoption, the loyalty adoption is lagging because we started it later.
Jim Lain: Yeah. So first off, Cost Cutters locations, there isn't an all-out effort to add Cost Cutters locations. However, there are some Cost Cutters locations that are coming online really as we speak right now in an area where a franchisee has found the ability to go over an old haircutting business and has converted that business. That business is now defunct. And the owner of a Supercuts brand for us has gone in and been able to convert those to Cost Cutters, providing kind of a cool approach where we've got the two brands now in a given DMA and able to grow instead of growing the Supercuts brand where it didn't make sense, we can bring in the Cost Cutters brand and fill in appropriately and productively. So I'm encouraged by that. And then in terms of loyalty adoption, the loyalty adoption is lagging because we started it later.
Speaker #1: Yeah . So first off , Costcutter locations , there isn't an all effort out to to add Costcutter locations . However , there cost cutter locations that are online coming are some .
Speaker #1: speak Really , as we . And and an area where a franchisee has found the ability over an to take old haircutting business and has converted that business is is is now defunct and the owner of Supercuts brand for us has in gone and been able to to convert those cost cutters , providing kind of a cool approach where we've got the two brands now in a DMA and able to grow instead of growing the Supercuts brand where given make sense , we can bring in the Cost brand Cutter and fill in appropriately and .
Speaker #1: productively So I'm encouraged by that in then . terms And loyalty , adoption , the of loyalty , because we adoption is started later it came .
Jim Lain: We just have recently turned it on in the balance of our brands. The good news is we're seeing it grow. And in fact, in some cases, it's growing at a faster rate than it did initially at Supercuts when we launched it at Supercuts. So as I said in my narrative, ensuring that we are implementing and taking the logical wins that we're seeing on the Supercuts side and deploying those into the balance of our brands is an important part of our strategy. Oh, in terms of the CEO search, sorry, I wanted to make sure I'm looking at the questions here live. We continue. The board continues to evaluate and continues to consider the appropriate options for the next CEO. And I continue to operate as I am in running the organization and working in close partnership with the board to ensure that we're moving forward.
Jim Lain: We just have recently turned it on in the balance of our brands. The good news is we're seeing it grow. And in fact, in some cases, it's growing at a faster rate than it did initially at Supercuts when we launched it at Supercuts. So as I said in my narrative, ensuring that we are implementing and taking the logical wins that we're seeing on the Supercuts side and deploying those into the balance of our brands is an important part of our strategy. Oh, in terms of the CEO search, sorry, I wanted to make sure I'm looking at the questions here live. We continue. The board continues to evaluate and continues to consider the appropriate options for the next CEO. And I continue to operate as I am in running the organization and working in close partnership with the board to ensure that we're moving forward.
Speaker #1: We just have recently turned it on in the our brands . The good news balance of we're seeing it grow . And in fact , in some cases , it's growing at a lagging than it did initially at we launched Supercuts .
Speaker #1: it at Supercuts . So as I as I said in my narrative When , ensuring we are that implementing and taking the the logical wins we're that seeing on the Supercuts side and those into the deploying balance of our brands is important part an of our strategy .
Speaker #1: Oh , in terms CEO search , sorry , I wanted to make sure I'm looking questions here live at the . You know , we continue the board continues to to evaluate and continues to consider the appropriate options to for the next CEO .
Speaker #1: And I continue to operate as I in am running the organization . And working in close partnership with the board to ensure that we're moving forward .
Jim Lain: More to come.
Jim Lain: More to come.
Speaker #1: So more to come .
Kersten Zupfer: That wraps up our Q&A session, and that wraps up our second quarter fiscal year 2026 earnings call. Thank you for your interest and continued support of Regis. Have a great day. Thank you.
Kersten Zupfer: That wraps up our Q&A session, and that wraps up our second quarter fiscal year 2026 earnings call. Thank you for your interest and continued support of Regis. Have a great day. Thank you.
Speaker #2: That wraps is that Q&A session and that up our wraps up our second quarter fiscal year 2026 earnings call . Thank you for your interest and support of continued Regis .
