What changed in REGIS CORP's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of REGIS CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+202 added−195 removedSource: 10-K (2025-09-03) vs 10-K (2024-08-28)
Top changes in REGIS CORP's 2025 10-K
202 paragraphs added · 195 removed · 148 edited across 7 sections
- Item 7. Management's Discussion & Analysis+73 / −75 · 57 edited
- Item 1A. Risk Factors+70 / −51 · 41 edited
- Item 1. Business+44 / −52 · 37 edited
- Item 5. Market for Registrant's Common Equity+4 / −7 · 4 edited
- Item 1C. Cybersecurity+4 / −3 · 2 edited
Item 1. Business
Business — how the company describes what it does
37 edited+7 added−15 removed41 unchanged
Item 1. Business
Business — how the company describes what it does
37 edited+7 added−15 removed41 unchanged
2024 filing
2025 filing
Biggest changeSystem-wide location counts Fiscal Years 2024 2023 2022 FRANCHISE SALONS: Supercuts 1,946 2,082 2,264 SmartStyle/Cost Cutters in Walmart stores 1,232 1,388 1,646 Portfolio Brands 1,117 1,223 1,344 Total North American salons 4,295 4,693 5,254 Total International salons (1) 96 102 141 Total franchise salons 4,391 4,795 5,395 as a percent of total franchise and company-owned salons 99.6 % 98.6 % 98.1 % COMPANY-OWNED SALONS: Supercuts 3 7 18 SmartStyle/Cost Cutters in Walmart stores 8 48 49 Portfolio Brands 6 13 38 Total company-owned salons 17 68 105 as a percent of total franchise and company-owned salons 0.4 % 1.4 % 1.9 % Total franchise and company-owned salons 4,408 4,863 5,500 7 Table of Contents Constructed locations (net relocations) Fiscal Years 2024 2023 2022 FRANCHISE SALONS: Supercuts 9 11 15 SmartStyle/Cost Cutters in Walmart stores — — 1 Portfolio Brands 5 4 5 Total North American salons 14 15 21 Total International salons (1) 1 — — Total franchise salons 15 15 21 COMPANY-OWNED SALONS: Supercuts — — — SmartStyle/Cost Cutters in Walmart stores — — — Portfolio Brands — 1 — Total company-owned salons — 1 — Closed locations Fiscal Years 2024 2023 2022 FRANCHISE SALONS: Supercuts (145) (196) (156) SmartStyle/Cost Cutters in Walmart stores (166) (258) (49) Portfolio Brands (111) (123) (81) Total North American salons (422) (577) (286) Total International salons (1) (7) (39) (13) Total franchise salons (429) (616) (299) COMPANY-OWNED SALONS: Supercuts (3) (11) (6) SmartStyle/Cost Cutters in Walmart stores (30) (1) (15) Portfolio Brands (8) (25) (40) Total company-owned salons (41) (37) (61) 8 Table of Contents Conversions (including net franchisee transactions) (2) Fiscal Years 2024 2023 2022 FRANCHISE SALONS: Supercuts 1 3 19 SmartStyle/Cost Cutters in Walmart stores 10 — 28 Portfolio Brands (1) (2) 63 Total franchise salons 10 1 110 COMPANY-OWNED SALONS: Supercuts (1) — (11) SmartStyle/Cost Cutters in Walmart stores (10) — (27) Portfolio Brands 1 (1) (72) Total company-owned salons (10) (1) (110) _______________________________________________________________________________ (1) Canadian and Puerto Rican salons are included in the North American salon totals.
Biggest changeSystem-wide location counts Fiscal Years 2025 2024 2023 FRANCHISE SALONS: Supercuts 1,711 1,946 2,082 SmartStyle/Cost Cutters in Walmart stores 1,049 1,232 1,388 Portfolio Brands 816 1,117 1,223 Total North American salons 3,576 4,295 4,693 Total International salons 71 96 102 Total franchise salons 3,647 4,391 4,795 as a percent of total franchise and company-owned salons 92.5 % 99.6 % 98.6 % COMPANY-OWNED SALONS: Supercuts 100 3 7 SmartStyle/Cost Cutters in Walmart stores — 8 48 Portfolio Brands 194 6 13 Total company-owned salons 294 17 68 as a percent of total franchise and company-owned salons 7.5 % 0.4 % 1.4 % Total franchise and company-owned salons 3,941 4,408 4,863 7 Table of Contents Constructed locations (net of relocations) Fiscal Years 2025 2024 2023 FRANCHISE SALONS: Supercuts 12 9 11 SmartStyle/Cost Cutters in Walmart stores 6 — — Portfolio Brands — 5 4 Total North American salons 18 14 15 Total International salons — 1 — Total franchise salons 18 15 15 COMPANY-OWNED SALONS: Supercuts — — — SmartStyle/Cost Cutters in Walmart stores — — — Portfolio Brands — — 1 Total company-owned salons — — 1 Closed locations Fiscal Years 2025 2024 2023 FRANCHISE SALONS: Supercuts (139) (145) (196) SmartStyle/Cost Cutters in Walmart stores (189) (166) (258) Portfolio Brands (95) (111) (123) Total North American salons (423) (422) (577) Total International salons (25) (7) (39) Total franchise salons (448) (429) (616) COMPANY-OWNED SALONS: Supercuts (11) (3) (11) SmartStyle/Cost Cutters in Walmart stores (8) (30) (1) Portfolio Brands (18) (8) (25) Total company-owned salons (37) (41) (37) 8 Table of Contents Conversions (including net franchisee transactions) Fiscal Years 2025 2024 2023 FRANCHISE SALONS: Supercuts (108) 1 3 SmartStyle/Cost Cutters in Walmart stores — 10 — Portfolio Brands (206) (1) (2) Total franchise salons (314) 10 1 COMPANY-OWNED SALONS: Supercuts 108 (1) — SmartStyle/Cost Cutters in Walmart stores — (10) — Portfolio Brands 206 1 (1) Total company-owned salons (1) 314 (10) (1) _____________________________________________________________________________ (1) Total company-owned salons for fiscal year 2025 includes salons acquired through the Alline Acquisition. 9 Table of Contents Affiliated Ownership Interest: The Company previously maintained a non-controlling 55.1% ownership interest in Empire Education Group, Inc.
Guests Among other factors, consistent delivery of an exceptional guest experience, haircut quality, convenience, competitive pricing, salon location, inviting salon appearance and atmosphere, comprehensive retail assortments, and engagement through technology all drive guest traffic and improve guest retention. Guest Experience. Our portfolio of salon concepts enables our guests to select different service scheduling options based upon their preference.
Among other factors, consistent delivery of an exceptional guest experience, haircut quality, convenience, competitive pricing, salon location, inviting salon appearance and atmosphere, comprehensive retail assortments, and engagement through technology all drive guest traffic and improve guest retention. Guest Experience. Our portfolio of salon concepts enables our guests to select different service scheduling options based upon their preference.
See Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. As of August 2024, all our salons have transitioned to the Zenoti salon technology platform. We also use mobile applications to allow guests to view wait times and interact in other ways with salons. Salon Support.
See Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. As of August 2024, all our salons transitioned to the Zenoti salon technology platform. We also use mobile applications to allow guests to view wait times and interact in other ways with salons. Salon Support.
Salon Support is primarily located in Minneapolis, Minnesota while allowing for hybrid and remote work. 6 Table of Contents Salon Concepts: The Company's salon concepts focus on providing high-quality hair care services and professional hair care products. Descriptions of the Company's salon concepts are listed below: Supercuts.
Salon Support is located in Minneapolis, Minnesota while allowing for hybrid and remote work. 6 Table of Contents Salon Concepts: The Company's salon concepts focus on providing high-quality hair care services and professional hair care products. Descriptions of the Company's salon concepts are listed below: Supercuts.
Our corporate headquarters is referred to as Salon Support. We take a service-oriented mentality to best support our franchisees and oversee our remaining company-owned locations. Salon Support and our associated priorities are aligned with our brands to enhance the effectiveness and efficiency of the service we provide.
Our corporate headquarters is referred to as Salon Support. We take a service-oriented mentality to best support our franchisees and oversee our company-owned locations. Salon Support and our associated priorities are aligned with our brands to enhance the effectiveness and efficiency of the service we provide.
These expectations are met with the average service price of transactions ranging from $25 to $32. Pricing decisions are considered on a salon-level basis and are established based on local conditions. Our franchisees control all pricing at their locations. Retail Assortments. Salons sell nationally recognized hair care and beauty products.
These expectations are met with the average service price of transactions ranging from $25 to $36. Pricing decisions are considered on a salon-level basis and are established based on local conditions. Our franchisees control all pricing at their locations. Retail Assortments. Salons sell nationally recognized hair care and beauty products.
SmartStyle and Cost Cutters in Walmart Supercenters The majority of existing SmartStyle and Cost Cutters franchise agreements for salons located in Walmart Supercenters have a five-year term with a five-year option to renew. The franchise agreements are site specific.
SmartStyle and Cost Cutters in Walmart Supercenters The majority of existing SmartStyle and Cost Cutters franchise agreements for salons located in Walmart Supercenters have a five-year term with a two or five-year option to renew. The franchise agreements are site specific.
Zupfer served as Senior Vice President and Chief Accounting Officer from November 2017 to November 2019, prior to which she served as Vice President, Corporate Controller and Chief Accounting Officer from December 2014 to November 2017. 14 Table of Contents
Zupfer served as Senior Vice President and Chief Accounting Officer from November 2017 to November 2019, prior to which she served as Vice President, Corporate Controller and Chief Accounting Officer from December 2014 to November 2017. 13 Table of Contents
Supercuts salons provide consistent, high-quality hair care services and professional hair care products to guests at convenient times and locations at value prices. This concept appeals to men, women, and children. The Company has 1,946 franchised and 3 company-owned Supercuts locations throughout North America. SmartStyle/Cost Cutters in Walmart stores.
Supercuts salons provide consistent, high-quality hair care services and professional hair care products to guests at convenient times and locations at value prices. This concept appeals to men, women, and children. The Company has 1,711 franchised and 100 company-owned Supercuts locations throughout North America. SmartStyle/Cost Cutters in Walmart stores.
The Company provides new franchisees with training, focusing on the various aspects of salon management, including operations, management training, marketing fundamentals and controls. Existing franchisees receive 5 Table of Contents training, counseling, and information from the Company on a regular basis. The Company provides franchise salon managers and stylists with access to technical training resources.
The Company provides new franchisees with training, focusing on the various aspects of salon management, including operations, management training, marketing fundamentals and controls. Existing franchisees receive training, counseling, and information from the Company on a regular basis. The Company provides franchise salon managers and stylists with access to technical training resources. Guests.
We provide our franchisees with a comprehensive system of business training, stylist education, site approval, professional marketing, promotion, and advertising programs, and other forms of ongoing support designed to help franchisees build successful businesses. Historically, we have signed the salon lease and then subleased the space to our franchisees. Standards of Operations.
We provide our franchisees and company-owned salons with a comprehensive system of business training, stylist education, site approval, professional marketing, promotion, and advertising programs, and other forms of ongoing support designed to help franchisees build successful businesses. Historically, we signed the salon lease and then subleased the space to our franchisees.
Michelle DeVore was appointed to Head of Marketing in August 2022. Prior to joining the Company, Ms. DeVore was Vice President, Customer Experience at European Wax Center, a chain of hair removal salons, from November 2019 to August 2022. Prior to European Wax Center, Ms.
Prior to joining the Company, Ms. DeVore was Vice President, Customer Experience at European Wax Center, a chain of hair removal salons, from November 2019 to August 2022. Prior to European Wax Center, Ms.
Cost Cutters (not located in Walmart Supercenters), First Choice Haircutters and Magicuts The majority of existing Cost Cutters franchise agreements have a 15-year term with a 15-year option to renew (at the option of the franchisee), while the majority of First Choice Haircutters franchise agreements have a 10-year term with a five-year option to renew.
Cost Cutters (not located in Walmart Supercenters), First Choice Haircutters, Magicuts and Roosters Men’s Grooming Center (Portfolio Brands) The majority of existing Cost Cutters franchise agreements have a 15-year term with a 15-year option to renew (at the option of the franchisee), while the majority of First Choice Haircutters franchise agreements have a 10-year term with a five-year option to renew.
Roosters Men’s Grooming Center Roosters franchise agreements have a 10-year term with a 10-year option to renew (at the option of the franchisee). New franchisees enter into a franchise agreement concurrent with the opening of their first store, along with a development agreement with the right to open two additional locations. Franchisee Training.
Roosters franchise agreements have a 10-year term with a 10-year option to renew (at the option of the franchisee). New franchisees enter into a franchise agreement concurrently with the opening of their first store, along with a development agreement with the right to open two additional locations. 5 Table of Contents Franchisee Training.
As of June 30, 2024, the Company franchised or owned 4,408 locations, primarily in North America. The Company's locations consist of 4,391 franchised salons and 17 company-owned salons. Each of the Company's salon concepts generally offer similar salon products and services. The major services supplied by the salons are haircutting and styling (including shampooing and conditioning) and hair coloring.
As of June 30, 2025, the Company franchised or owned 3,941 locations, primarily in North America. The Company's locations consist of 3,647 franchised salons and 294 company-owned salons. Each of the Company's salon concepts generally offer similar salon products and services. The major services supplied by the salons are haircutting and styling (including shampooing and conditioning) and hair coloring.
SmartStyle and Cost Cutters salons offer a full range of custom styling, cutting, and hair coloring, as well as professional hair care products and are currently located in Walmart Supercenters. This concept has primarily a "walk-in" guest base with value pricing.
SmartStyle and Cost Cutters salons offer a full range of custom styling, cutting, and hair coloring, as well as professional hair care products and are currently located in Walmart Supercenters. This concept has primarily a "walk-in" guest base with value pricing. The Company has 1,049 franchised SmartStyle and Cost Cutters salons located in Walmart Supercenter locations throughout North America.
Additionally, 68% of the Company's leadership positions are held by women. 10 Table of Contents Families First Over one hundred years ago, the Company began as a family business and its support of families continues today.
As of June 30, 2025, 94% of the Company's entire workforce are women and 6% are men. Additionally, 58% of the Company's leadership positions are held by women. 10 Table of Contents Families First Over one hundred years ago, the Company began as a family business and its support of families continues today.
These salons offer similar levels of service as our North American salons. Salons are usually located in prominent high-traffic locations and offer a full range of custom hairstyling, cutting and coloring services, as well as professional hair care products. The Company has 96 franchised international locations.
Salons are usually located in prominent high-traffic locations and offer a full range of custom hairstyling, cutting and coloring services, as well as professional hair care products. The Company has 71 franchised international locations. Canadian and Puerto Rican salons are included in the North American salon totals.
Suarez had 26 years of combined salon operations and education experience at the Company, including Senior Vice President of Merchandising and Education from March 2022 to August 2023, Vice President of Merchandising and Education from October 2021 to February 2022 and as Vice President of Education from August 2017. 13 Table of Contents Kersten Zupfer was appointed to Executive Vice President and Chief Financial Officer in November 2019.
Suarez had 26 years of combined salon operations and education experience at the Company, including Senior Vice President of Merchandising and Education from March 2022 to August 2023, Vice President of Merchandising and Education from October 2021 to February 2022 and as Vice President of Education from August 2017 to October 2021.
Salons operate primarily under the trade names of Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters and Roosters and they generally serve the value category within the industry. Salons are primarily located in strip center locations and Walmart Supercenters.
Salons operate primarily under the trade names of Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters and Roosters and they generally serve the value category within the industry. Salons are primarily located in strip center locations and Walmart Supercenters. The Company reports its operations in two operating segments: franchise and company-owned. Service revenues comprise approximately 94% of total company-owned salon revenues.
In connection with the sale, Regis is no longer a co-signatory to the Title IV program participation agreements of the EEG schools with the Department of Education.
In connection with the sale, Regis is no longer a co-signatory to the Title IV program participation agreements of the EEG schools with the Department of Education. Corporate Trademarks: The Company holds numerous trademarks, both in the United States and in many foreign countries.
Portfolio Brands salons are made up of acquired regional salon groups operating under the primary concepts of Cost Cutters, First Choice Haircutters, Roosters, Hair Masters, Cool Cuts for Kids, Style America, Famous Hair, Magicuts, Holiday Hair, and TGF, as well as other concept names.
Portfolio Brands. Portfolio Brands salons are made up of acquired regional salon groups operating under the primary concepts of Cost Cutters, First Choice Haircutters, Roosters, Hair Masters, Magicuts and Holiday Hair, as well as other concept names. Most concepts offer a full range of custom hairstyling, cutting and coloring services, as well as professional hair care products.
For more than 13 years before her promotion to Chief Financial Officer, Ms. Zupfer served in accounting and finance roles of increasing leadership at the Company. Ms.
Kersten Zupfer was appointed to Executive Vice President and Chief Financial Officer in November 2019. Beginning in August 2024, Ms. Zupfer has responsibility for People, Legal, and Real Estate functions. For more than 13 years before her promotion to Chief Financial Officer, Ms. Zupfer served in accounting and finance roles of increasing leadership at the Company. Ms.
Financial information about our segments and geographic areas for fiscal years 2024, 2023, and 2022 are included in Note 15 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. As of June 30, 2024, 99.6% of our salons are owned by franchisees.
Financial information about our segments and geographic areas for fiscal years 2025, 2024, and 2023 are included in Note 15 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. Industry Overview: The hair salon market is highly fragmented, with the vast majority of locations independently owned and operated.
The principal factors of competition in the hair care category are quality and consistency of the guest experience, the ability to attract, retain, and train stylists, technology, convenience, location, and price.
The principal factors of competition in the hair care category are quality and consistency of the guest experience, the ability to attract, retain, and train stylists, technology, convenience, location, and price. The Company continually strives to improve its performance in each of these areas and to create additional points of brand differentiation versus the competition. 4 Table of Contents General.
Michael Ferranti was appointed to Executive Vice President, Brand Operations - SmartStyle, First Choice Hair, Roosters, and Portfolio Brands in August 2024. Since joining the company in March 2021, he has held various leadership roles, including overseeing the People, Legal, and Real Estate functions.
Michael Ferranti was appointed to Executive Vice President, Brand Operations - SmartStyle, First Choice Hair, Roosters, and Portfolio Brands in August 2024. He previously served as Executive Vice President and Chief People Officer from December 2021 to August 2024, and as Senior Vice President, People and Culture from March 2021 to December 2021. Before joining the Company, Mr.
The Company faces competition from chains, such as Great Clips, Fantastic Sams, Sport Clips and Ulta Beauty, independently owned salons, in-home hair services, booth rentals and blow dry bars. The Company also faces competition from other franchise organizations outside of the hair salon industry in attracting new franchisees.
In nearly every area in which the Company has a salon, there are competitors offering similar hair care services and products at similar prices. The Company faces competition from chains, such as Great Clips, Fantastic Sams, Sport Clips and Ulta Beauty, independently owned salons, in-home hair services, booth rentals and blow dry bars.
Most concepts offer a full range of custom hairstyling, cutting and coloring services, as well as professional hair care products. The Company has 1,117 franchised and 6 company-owned Portfolio Brands locations throughout North America. International Salons. International salons are locations operating in the United Kingdom, primarily under the Supercuts and Regis concepts.
The Company has 816 franchised and 194 company-owned Portfolio Brands locations throughout North America. International Salons. The Company's International salons are locations operating in the United Kingdom, primarily under the Supercuts and Regis concepts. These salons offer similar levels of service as our North American salons.
In May 2024, the Company sold its stake in EEG to the controlling owner. The sale did not have a significant impact on the Company's operations or financial position. When the Company held a majority ownership interest in EEG it was a co-signatory to the Title IV program participation agreements of the EEG schools with the Department of Education.
(EEG), which was accounted for as an equity method investment. EEG operates accredited cosmetology schools. In May 2024, the Company sold its stake in EEG to the controlling owner. The sale did not have a significant impact on the Company's operations or financial position.
Our People As of June 30, 2024, the Company employed 275 employees. The Company offers flexible work arrangements such as hybrid and remote work. Diversity and Inclusion The Company promotes diversity of thoughts, backgrounds, experiences, and ideas. As of June 30, 2024, 79% of the Company's entire workforce are women and 21% are men.
These values support a collaborative and inclusive culture that is critical to the success and growth of our Company. Our People As of June 30, 2025, the Company employed 1,777 employees. The Company offers flexible work arrangements such as hybrid and remote work. Diversity and Inclusion The Company promotes diversity of thoughts, backgrounds, experiences, and ideas.
Previously, he served as Executive Vice President and Chief Technology Officer from October 2021 to July 2022. Prior to joining the Company, Mr.
Prior to which, he served as President of SmartStyle from June 2021 to December 2021 and President of Portfolio Brands from December 2020 to June 2021. Mr. Lain served as a consultant to the Company from July 2020 to December 2020 and as Executive Vice President and Chief Operating Officer from November 2013 to July 2020.
The Company makes available, free of charge, copies of its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. 12 Table of Contents Executive Officers of the Registrant: Information relating to the Executive Officers of the Company follows: Name Age Position John Davi 46 Executive Vice President, Chief Digital Officer Michelle DeVore 40 Senior Vice President, Head of Marketing Matthew Doctor 37 President and Chief Executive Officer Michael Ferranti 41 Executive Vice President, Brand Operations - SmartStyle, First Choice Hair, Roosters, and Portfolio Brands Jim Lain 60 Executive Vice President, Brand Operations - Supercuts and Cost Cutters James Suarez 49 Executive Vice President, Merchandising and Education Kersten Zupfer 49 Executive Vice President, Chief Financial Officer John Davi was appointed to Executive Vice President and Chief Digital Officer in July 2022.
The Company makes available, free of charge, copies of its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. 12 Table of Contents Information about our Executive Officers: On June 20, 2025, Matthew Doctor, the President and Chief Executive Officer and a member of the Board of Directors (the "Board") of the Company notified the Board that he would resign his positions, effective June 30, 2025.
In fiscal year 2024, we included content on diversity, equity, and inclusion to further this commitment, raise awareness, and enhance engagement through inclusivity. Corporate Responsibility The Company will not do business with organizations that employ or condone unfair labor practices. Instead, it partners with companies who share its commitment to ethical business conduct and fair labor practices.
In addition, its short- and long-term incentive plans are aligned with its core values and key business objectives, which are intended to motivate strong performance. Corporate Responsibility The Company will not do business with organizations that employ or condone unfair labor practices. Instead, it partners with companies who share its commitment to ethical business conduct and fair labor practices.
Before joining Regis, Michael was Head of M&A for Subway Restaurants North America and Global Head of Development, HR, IT, and Chief Administrative Officer at Le Pain Quotidien, an international bakery chain. He also served as Vice President of People & Performance for the U.S. and Canada at Kraft Heinz.
Ferranti was Head of M&A and Franchising for Subway Restaurants U.S. and Canada, a restaurant brand, from September 2020 to March 2021. Prior to Subway Restaurants, he served as Global Head of Development, HR, IT, Chief Administrative Officer at Le Pain Quotidien, a bakery café chain, from October 2018 to November 2019.
Jim Lain was appointed to Executive Vice President, Brand Operations - Supercuts and Cost Cutters in August 2024. Previously, as Executive Vice President and Chief Operating Officer, Jim played a pivotal role in transforming Regis into a leader in the haircare industry.
Lain has served as Executive Vice President, Brand Operations - Supercuts and Cost Cutters since August 2024 and continues to fill that role in addition to his responsibilities as Interim President and Chief Executive Officer. Previously, Mr. Lain served as Executive Vice President and Chief Operating Officer from December 2021 to August 2024.
The Company believes it is operating in substantial compliance with applicable laws and regulations governing all its operations. The Company previously maintained an ownership interest in Empire Education Group, Inc. In May 2024, the Company sold its ownership interest in EEG to the other owner. The sale did not have a significant impact on the Company's operations or financial position.
The Company believes it is operating in substantial compliance with applicable laws and regulations governing all its operations.
Prior to his experience with Gap, Jim was Vice President of Operations at Galyan's Trading Company Inc. / Dick's Sporting Goods and held several field management positions at Target Stores Inc. James Suarez was appointed to Executive Vice President, Merchandising and Education in August 2023. Prior to his promotion to Executive Vice President, Merchandising and Education, Mr.
James Suarez was appointed to Executive Vice President, Merchandising and Education in August 2023. As part of that role, Mr. Suarez assumed leadership of the company-owned salons acquired through the Alline Acquisition in December 2024. Prior to his promotion to Executive Vice President, Merchandising and Education, Mr.
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The remaining 17 company-owned salons will be sold or closed when the related leases expire or terminate. Industry Overview: The hair salon market is highly fragmented, with the vast majority of locations independently owned and operated. In nearly every area in which the Company has a salon, there are competitors offering similar hair care services and products at similar prices.
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The Company also faces competition from other franchise organizations outside of the hair salon industry in attracting new franchisees.
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The Company continually strives to improve its performance in each of these areas and to create additional points of brand differentiation versus the competition. 4 Table of Contents Salon Franchising Program: General.
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In December 2024, the Company acquired Super C Group, LLC, doing business as Alline Salon Group (Alline), bringing a portfolio of 314 salons across the Supercuts, Cost Cutters and Holiday Hair brands back under Regis (the Alline Acquisition).
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The Company has 1,232 franchised and 8 company-owned SmartStyle and Cost Cutters salons located in Walmart Supercenter locations throughout North America. Portfolio Brands.
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Although the Company's main focus remains supporting and driving franchisee sales and profitability, this transaction marks a major milestone in shaping and best positioning the Company for growth and value creation moving forward. Standards of Operations.
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(2) During fiscal years 2024, 2023, and 2022, the Company sold 10, 1, and 110 salon locations, respectively, to franchisees. 9 Table of Contents Affiliated Ownership Interest: The Company previously maintained a non-controlling 55.1% ownership interest in Empire Education Group, Inc. (EEG), which was accounted for as an equity method investment. EEG operates accredited cosmetology schools.
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Upon receiving such notice, the Board appointed Jim Lain, the Company’s Executive Vice President, Brand Operations - Supercuts and Cost Cutters, to serve as Interim President and Chief Executive Officer, effective July 1, 2025, after which Mr.
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As a co-signatory to the Title IV program participation agreements, the Department of Education could hold the Company responsible for EEG's Title IV program liabilities. In connection with the sale, Regis is no longer a co-signatory to the Title IV program participation agreements of the EEG schools with the Department of Education.
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Doctor continued to provide services to the Company as a part-time employee through August 31, 2025, pursuant to a Resignation and Transition Letter Agreement between the Company and Mr. Doctor. The Board has commenced a comprehensive search for a permanent successor.
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Corporate Trademarks: The Company holds numerous trademarks, both in the United States and in many foreign countries.
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Information relating to the Executive Officers of the Company follows: Name Age Position Michelle DeVore 41 Senior Vice President, Head of Marketing Michael Ferranti 42 Executive Vice President, Brand Operations - SmartStyle, First Choice Hair, Roosters, and Portfolio Brands Jim Lain 61 Executive Vice President, Brand Operations - Supercuts and Cost Cutters; Interim President and Chief Executive Officer James Suarez 50 Executive Vice President, Merchandising and Education Kersten Zupfer 50 Executive Vice President, Chief Financial Officer Michelle DeVore was appointed to Head of Marketing in August 2022.
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These values support a collaborative and inclusive culture that is critical to the success and growth of our Company. To help reinforce our values and incorporate them into everything we do, we have a values committee comprised of cultural ambassadors who serve as the voice of employees and help ensure a best-in-class employee experience.
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Earlier in his career, he held a variety of leadership roles with KraftHeinz and Restaurant Brands International. The Board appointed Jim Lain, the Company’s Executive Vice President, Brand Operations - Supercuts and Cost Cutters, to serve as Interim President and Chief Executive Officer, effective July 1, 2025. Mr.
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In addition, its short- and long-term incentive plans are aligned with its core values and key business objectives, which are intended to motivate strong performance. Development and Engagement We continued our investment in learning and development by adding more content to the Learning Hub and the Beauty of Series.
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At the end of fiscal year 2020, the majority of state and local governments where we operate temporarily mandated the closure of our salons in response to the COVID-19 global pandemic. These pandemic related government-mandated closures continued into fiscal year 2021 and into fiscal year 2022 in parts of Canada.
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Davi served as an advisor at Apostrophe, a wellness and fitness services company, from July 2012 to October 2021, as Chief Product Officer for BriteCore, a cloud-based insurance solution for personal and commercial insurance providers, from November 2019 to November 2020, Senior Vice President of Product at MINDBODY, Inc., a wellness and fitness services company, from February 2018 to September 2019, founding Vice President of Product for Diffbot, and Head of Engineering for Cisco Systems' Media Solutions Group.
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Matthew Doctor was appointed to President and Chief Executive Officer in May 2022, after holding such position on an interim basis since December 2021. Previously, he served as Executive Vice President and Chief Strategy Officer from February 2021 to December 2021, and as a consultant to the Company from December 2020 to February 2021.
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Prior to joining the Company, he was Chief Financial Officer of Kava Restaurants, LLC, a Tim Horton's franchisee, from May 2018 to December 2020. Earlier in his career, Mr. Doctor worked in business development at Restaurant Brands International and was in investment banking with J.P. Morgan.
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Michael’s extensive franchising background began at Burger King, where he held various roles, including Vice President of People, Procurement, Finance & IT, and Vice President, General Manager for South and Southeast Asia, based in Singapore. He later became CEO of Perfect Combo Limited, a Burger King franchisee, leading operations in Hong Kong and Taiwan.
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Joining Regis in 2013, Jim brought over 25 years of operations leadership experience, where he spearheaded initiatives that drove operational excellence and elevated the performance of iconic brands like Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters, Roosters, and other legacy brands.
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Before Regis, Jim made significant contributions at Gap Inc., where he served as Vice President of Operations for Gap Specialty Stores in the U.S. and Canada. In this role, he was responsible for steering a $2.5 billion business across 750 stores, enhancing operational efficiency, and driving growth in a highly competitive market.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
41 edited+29 added−10 removed106 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
41 edited+29 added−10 removed106 unchanged
2024 filing
2025 filing
Biggest changeIn addition, labor shortages and increases in minimum wage requirements may impact the number of stylists considering careers outside the beauty industry. In most markets, we and our franchisees have experienced a shortage of qualified stylists or a reduction in the hours stylists will work.
Biggest changeBecause the salon industry is highly fragmented and comprised of many independent operators, the market for stylists is highly competitive. In addition, labor shortages and increases in minimum wage requirements may impact the number of stylists considering careers outside the beauty industry.
Additionally, we plan to continue expanding our digital marketing efforts, and the success of those efforts is dependent upon our franchisees’ proper continued use of Zenoti salon technology platform, accurate and consistent guest data capture, and customers continuing to opt-in to receive marketing messages from us. Our success depends substantially on the value of our brands.
Additionally, we plan to continue expanding our digital marketing efforts, and the success of those efforts is dependent upon our franchisees’ proper continued use of the Zenoti salon technology platform, accurate and consistent guest data capture, and customers continuing to opt-in to receive marketing messages from us. Our success depends substantially on the value of our brands.
In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are subject to the examination of our income tax returns, payroll taxes and other tax matters by the Internal Revenue Service and other tax authorities and governmental bodies.
In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are subject to the examination of our income tax returns, payroll taxes and other tax matters by the Internal Revenue Service (IRS) and other tax authorities and governmental bodies.
However, franchisees may not have access to capital, labor, etc., to support their growth. 19 Table of Contents Data security and data privacy compliance requirements could increase our costs, and cybersecurity incidents could result in the compromise of potentially sensitive information about our guests, franchisees, employees, vendors, or Company and expose us to business disruption, negative publicity, costly government enforcement actions or private litigation and our reputation could suffer.
However, franchisees may not have access to capital, labor, etc., to support their growth. 17 Table of Contents Data security and data privacy compliance requirements could increase our costs, and cybersecurity incidents could result in the compromise of potentially sensitive information about our guests, franchisees, employees, vendors, or Company and expose us to business disruption, negative publicity, costly government enforcement actions or private litigation and our reputation could suffer.
Declining franchisee revenue reduces the advertising funds available to invest in the brands and a decline in the Company's investment in its brands could reduce brand awareness and the overall value of our brands.
Declining revenue reduces the advertising funds available to invest in the brands and a decline in the Company's investment in its brands could reduce brand awareness and the overall value of our brands.
In addition, any non-compliance with laws or regulations could result in penalties, fines, product recalls and enforcement actions or otherwise restrict our ability to market certain products or attract or retain employees, which could adversely affect our business, financial condition, and results of operations. 16 Table of Contents Changes in the general economic environment may impact our business and results of operations.
In addition, any non-compliance with laws or regulations could result in penalties, fines, product recalls and enforcement actions or otherwise restrict our ability to market certain products or attract or retain employees, which could adversely affect our business, financial condition, and results of operations. 15 Table of Contents Changes in the general economic environment may impact our business and results of operations.
Operating SmartStyle salons adds complexity in overseeing franchise compliance and coordination with Walmart. Additionally, there are various remodel requirements of our franchisees, whether it be upon lease expiration or the remodeling of a Walmart location. To the extent Walmart accelerates the pace of their own store remodels, our salons in remodeled Walmart locations would be held to the same standard.
Operating these salons adds complexity in overseeing franchise compliance and coordination with Walmart. Additionally, there are various remodel requirements of our franchisees, whether it be upon lease expiration or the remodeling of a Walmart location. To the extent Walmart accelerates the pace of their own store remodels, our salons in remodeled Walmart locations would be held to the same standard.
We have limited control over the locations and markets in which we open new SmartStyle locations, as we only have potential opportunities in locations offered to us by Walmart.
We have limited control over the locations and markets in which we open new locations, as we only have potential opportunities in locations offered to us by Walmart.
The impacts of significant business disruptions could ultimately impair our ability to comply with our covenants, which could preclude our ability to access our credit facility or accelerate our debt repayment obligation, which is secured by a lien on substantially all of the Company's assets. Premature termination of franchise agreements can cause losses.
The impact of significant business disruptions could ultimately impair our ability to comply with our covenants, which could preclude our ability to access our credit facility or accelerate our debt repayment obligation, which is secured by a lien on substantially all of the Company's assets. Premature termination of franchise agreements can cause losses.
By adopting the Plan, the Board of Directors is seeking to protect the Company’s ability to use its NOLs and other tax attributes to offset potential future income tax liabilities. The Company’s ability to use such NOLs and other tax attributes would be substantially limited if the Company experiences an "ownership change,” as defined in Section 382.
By extending the Plan, the Board of Directors is seeking to protect the Company’s ability to use its NOLs and other tax attributes to offset potential future income tax liabilities. The Company’s ability to use such NOLs and other tax attributes would be substantially limited if the Company experiences an "ownership change,” as defined in Section 382.
If one of our key vendors becomes unable to continue to provide products and services, if their systems fail or are compromised, or if the quality of their systems deteriorate, we may suffer operational difficulties and financial loss. The use of social media may have an adverse effect on our reputation.
If one of our key vendors becomes unable to continue to provide products and services, if their systems fail or are compromised, or if the quality of their systems deteriorates, we may suffer operational difficulties and financial loss. The use of social media may have an adverse effect on our reputation.
See Note 1 of the Consolidated Financial Statements for additional information on the terms and operation of the Tax Benefits Preservation Plan (the "Plan”), dated as of January 28, 2024, as the same may be amended from time to time, between the Company and Equiniti Trust Company, LLC, as Rights Agent.
See Note 1 to the Consolidated Financial Statements for additional information on the terms and operation of the Tax Benefits Preservation Plan (the "Plan”), dated as of January 29, 2024, as the same may be amended from time to time, between the Company and Equiniti Trust Company, LLC, as Rights Agent.
Further, events or circumstances beyond our control, including economic instability and other impactful events and circumstances in the regions in which our supplier and its manufacturers are located, the financial instability of our supplier, our supplier's failure to meet our terms and conditions or our supplier standards, product safety and quality issues, disruption or delay in the transportation of products from our supplier and its manufacturers to our salons, transport availability and cost, transport security, inflation and other factors relating to the supplier and the areas in which it operates, may adversely impact our and our franchisees' profitability.
Further, events or circumstances beyond our control, including economic instability and other impactful events and circumstances in the regions in which our supplier and its manufacturers are located, the financial instability of our supplier, our supplier's failure to meet our terms and conditions or our supplier standards, product safety and quality issues, disruption or delay in the transportation of products from our supplier and its manufacturers to our salons, transport availability and cost, transport 16 Table of Contents security, inflation and other factors relating to the supplier and the areas in which it operates, may adversely impact our and our franchisees' profitability.
Certain capabilities or entire systems may become outdated which could limit functionality. These management information systems may require upgrades or replacements periodically, which involve implementation and other operational risks. In addition, our management information systems are developed and maintained by external vendors, including the Zenoti salon technology platform used by our franchisees.
Certain capabilities or entire systems may become outdated which could limit functionality. These management information systems may require upgrades or replacements periodically, which involve implementation and other operational risks. In addition, our management information systems are developed and maintained by external vendors, including the Zenoti salon technology platform used by our franchisees and company-owned salons.
If our strategies are not successful in attracting, training, and retaining stylists or in staffing salons, our system-wide sales or the performance of our business could experience periods of volatility or sales could decline and our results of operations could be adversely affected. 18 Table of Contents Our continued success depends, in part, on the success of our franchisees, which operate independently.
If our strategies are not successful in attracting, training, and retaining stylists or in staffing salons, our system-wide sales or the performance of our business could experience periods of volatility or sales could decline and our results of operations could be adversely affected. Our continued success depends, in part, on the success of our franchisees, which operate independently.
Any such conduct with respect to our franchisees could also result in litigation. 21 Table of Contents We rely on external vendors for products and services critical to our operations.
Any such conduct with respect to our franchisees could also result in litigation. 19 Table of Contents We rely on external vendors for products and services critical to our operations.
The cost of these remodels may be prohibitive to our franchisees and could lead to the Company bearing a portion of the cost, or closures if the remodel requirement is not satisfied. 20 Table of Contents Our future growth and profitability may depend, in part, on our ability to build awareness and drive traffic with advertising and marketing efforts and on delivering a quality guest experience to drive repeat visits to our salons.
The cost of these remodels may be prohibitive to our franchisees and could lead to the Company bearing a portion of the cost, or closures if the remodel requirement is not satisfied. 18 Table of Contents Our future growth and profitability may depend, in part, on our ability to build awareness and drive traffic through advertising and marketing efforts and on delivering a quality guest experience to drive repeat visits to our salons.
As of June 30, 2024, we had 1,240 SmartStyle or Cost Cutters salons within Walmart locations. Walmart is our largest landlord. Business within each of those 1,240 salons relies primarily on the traffic of visitors to the Walmart location, so our success is tied to Walmart's success in bringing shoppers into their stores.
As of June 30, 2025, we had 1,049 SmartStyle or Cost Cutters salons within Walmart locations. Walmart is our largest landlord. Business within each of those 1,049 salons relies primarily on the traffic of visitors to the Walmart location, so our success is tied to Walmart's success in bringing shoppers into their stores.
Internal Revenue Code of 1986, as amended (the "Code”), and the Treasury Regulations issued thereunder, a corporation that undergoes an "ownership change” is subject to limitations on its use of its 24 Table of Contents existing NOL and interest expense carryforwards and certain other tax attributes (collectively, "Tax Assets”), which can be utilized in certain circumstances to offset future U.S. tax liabilities.
Internal Revenue Code of 1986, as amended (the Code), and the Treasury Regulations issued thereunder, a corporation that undergoes an "ownership change” is subject to limitations on its use of its existing NOL and interest expense carryforwards and certain other tax attributes (collectively, Tax Assets), which can be utilized in certain circumstances to offset future U.S. tax liabilities.
As of June 30, 2024, we had approximately $490 million of U.S. federal net operating losses ("NOLs”) as well as other tax attributes that could be available in certain circumstances to reduce future U.S. corporate income tax liabilities. Pursuant to Section 382 ("Section 382”) of the U.S.
As of June 30, 2025, we had approximately $477 million of U.S. federal net operating losses (NOLs) as well as other tax attributes that could be available in certain circumstances to reduce future U.S. corporate income tax liabilities. Pursuant to Section 382 (Section 382) of the U.S.
As of June 30, 2024, 99.6% of our salons were franchised locations. We derive revenues associated with our franchised locations primarily from royalties and fees. Our financial results are therefore substantially dependent upon the operational and financial success of our franchisees. As a franchise business, we are dependent on our franchisees.
As of June 30, 2025, approximately 92.5% of our salons were franchised locations. We derive revenues associated with our franchised locations primarily from royalties and fees. Our financial results are therefore substantially dependent upon the operational and financial success of our franchisees. As a franchise business, we are dependent on our franchisees.
Changes to the U.S., Canada, and U.K.'s economies have an impact on our business. General economic factors that are beyond our control, such as recession, inflation, deflation, tax rates and policy, energy costs, unemployment trends, extreme weather patterns, viruses, pandemics, stay-at-home orders, and other casualty events that influence consumer confidence and spending, may impact our business and results of operations.
General economic factors that are beyond our control, such as recession, inflation, deflation, tax rates and policy, tariffs, energy costs, unemployment trends, extreme weather patterns, viruses, pandemics, stay-at-home orders, and other casualty events that influence consumer confidence and spending, may impact our business and results of operations.
While we currently have a valuation allowance against our NOLs and other historic Tax Assets for financial accounting purposes, if we have undergone or, in the future, undergo an ownership change that applies to our Tax Assets, our ability to use these Tax Assets could be substantially limited after the ownership change, and this limit could have a substantial adverse effect on our cash flows and financial position.
If we have undergone or, in the future undergo, an ownership change that applies to our Tax Assets, our ability to use these Tax Assets could be substantially limited after the ownership change, and this limit could have a substantial adverse effect on our cash flows and financial position including but not limited to a change in the valuation allowance on our deferred tax assets.
This change has reduced our product sales revenue. If our supplier is unable to source the products at the prices expected by our franchisees, our franchisees' profitability and our profitability may be adversely impacted.
If our supplier is unable to source the products at the prices expected by our franchisees, our franchisees' profitability and our profitability may be adversely impacted.
With respect to the substantial majority of our Tax Assets, while we have, in recent years, experienced significant changes in the ownership of our stock, we do not believe we have undergone an "ownership change” that would limit our ability to use these Tax Assets.
With respect to the substantial majority of our Tax Assets, while we have, in recent years, experienced significant changes in the ownership of our stock, we do not believe we have undergone an "ownership change” that would limit our ability to use these Tax Assets. However, there can be no assurance that the IRS will not challenge this position.
If we or our franchisees fail to comply with any present or future laws or regulations, we or they could be subject to future liabilities or a prohibition on the operation of salons.
If we or our franchisees fail to comply with any present or future laws or regulations, we or they could be subject to future liabilities or a prohibition on the operation of salons and we could be prohibited from offering franchises for sale in certain states.
Also, product manufacturers may decide to utilize these other distribution channels to a larger extent than in the past and they generally have the right to terminate relationships with us with little advance notice.
Also, product manufacturers may decide to utilize these other distribution channels to a larger extent than in the past and they generally have the right to terminate relationships with us with little advance notice. These changes in distribution channels could also reduce the volume of foot traffic around our salons, and in turn, our revenues may be adversely affected.
Litigation and other legal or regulatory proceedings or claims and the outcome of such litigation, proceedings, or claims, including possible fines and penalties, could have an adverse effect on our business and any loss contingency accruals may be inadequate to cover actual losses.
Litigation and other legal or regulatory proceedings or claims and the outcome of such litigation, proceedings, or claims, including possible fines and penalties, could have an adverse effect on our business and any loss contingency accruals may be inadequate to cover actual losses. 24 Table of Contents From time to time in the ordinary course of our business operations, we are subject to litigation, including potential class action and single-plaintiff litigation, arbitration and other legal or regulatory proceedings or claims.
Also, in the future, our effective income tax rate could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in tax laws or the outcome of income examinations.
A number of factors may increase our effective income tax rate, including changes in valuation allowances on our deferred tax assets, changes in the mix of earnings in countries with different statutory tax rates, changes in tax laws or the outcome of income examinations.
Offering competitive wages, benefits, education, and training programs are important elements to attracting and retaining qualified stylists. In addition, due to challenges facing the for-profit education industry, cosmetology schools have experienced declines in enrollment, revenues, and profitability in recent years.
In addition, due to challenges facing the for-profit education industry, cosmetology schools have experienced declines in enrollment, revenues, and profitability in recent years.
Failure to manage our labor and benefit rates, advertising and marketing expenses, professional fees, operating lease costs, other expenses, or indirect spending could delay or prevent us from achieving increased profitability or otherwise adversely affect our operating results. 23 Table of Contents If we are not able to successfully compete in our business markets, our financial results may be affected.
Failure to control costs may adversely affect our operating results. We must continue to control our expense structure. Failure to manage our labor and benefit rates, advertising and marketing expenses, professional fees, operating lease costs, other expenses, or indirect spending could delay or prevent us from achieving increased profitability or otherwise adversely affect our operating results.
However, there can be no assurance that the Internal Revenue Service will not challenge this position. On January 28, 2024, our Board of Directors authorized and declared a dividend of one preferred stock purchase right for each outstanding share of Common Stock.
On January 28, 2024, our Board of Directors authorized and declared a dividend of one preferred stock purchase right for each outstanding share of Common Stock.
If we are not able to identify the right level of support and effectively deliver those resources to our franchisees, our results of operations and business may be adversely affected.
If we are not able to identify the right level of support and effectively deliver those resources to our franchisees, our results of operations and business may be adversely affected. Furthermore, as a franchised business, we may be exposed to additional legal, compliance and operational risks specific to this business model, including the business failure of unproven new salon owners.
Although we believe our tax estimates are reasonable, the final determination of tax audits, and any related litigation, could be materially different from our historical tax provisions and employment taxes. The results of an audit or litigation could have a material effect on our Consolidated Financial Statements in the period or periods where that determination is made.
Although we believe our tax estimates are reasonable, the final determination of tax audits, and any related litigation, could be materially different from our historical tax provisions and employment taxes.
Regulations passed by the Department of Education could reduce access to Federal financial aid for beauty schools which could reduce the number of qualified stylists to recruit if licensing requirements are not adjusted. Because the salon industry is highly fragmented and comprised of many independent operators, the market for stylists is highly competitive.
Regulations promulgated by the Department of Education, and changes to the Higher Education Act recently enacted as part of the "One Big Beautiful Bill Act" could reduce access to Federal financial aid for beauty schools which could reduce the number of qualified stylists to recruit if licensing requirements are not adjusted.
These changes in distribution channels could also reduce the volume of foot traffic around our salons, and in turn, our revenues may be adversely affected. 15 Table of Contents We are subject to laws and regulations that could require us to modify our current business practices and incur increased costs, which could have an adverse effect on our business, financial condition, and revenues.
Many of these factors will be outside of our control and any one of them could result in increased costs or decreased revenue, which may have a materially adverse effect on our business, financial condition, and results of operation. 14 Table of Contents We are subject to laws and regulations that could require us to modify our current business practices and incur increased costs, which could have an adverse effect on our business, financial condition, and revenues.
Moreover, any loss incurred could exceed policy limits and policy payments made to franchisees may not be made on a timely basis.
Moreover, any loss incurred could exceed policy limits and policy payments made to franchisees may not be made on a timely basis. Any such loss or delay in payment could have a material and adverse effect on a franchisee's ability to satisfy its obligations under its franchise agreement, including its ability to make royalty payments.
Any such loss or delay in payment could have a material and adverse effect on a franchisee's ability to satisfy its obligations under its franchise agreement, including its ability to make royalty payments. 22 Table of Contents Financial and Economic Risks We may be unable to generate sufficient cash flow to satisfy our debt service obligations, which would materially adversely affect our financial condition and results of operations.
Financial and Economic Risks We may be unable to generate sufficient cash flow to satisfy our debt service obligations, which would materially adversely affect our financial condition and results of operations.
Remote work arrangements reduce foot traffic in downtowns, city centers, and other business districts where our salons are located, causing a reduction in our revenue. We were previously subject to delisting proceedings, and we may not be able to maintain compliance with the continued listing standards of any national securities exchange.
Remote work arrangements reduce foot traffic in downtowns, city centers, and other business districts where our salons are located, causing a reduction in our revenue. Operating Risks We are substantially dependent on franchise royalties and the overall success of our franchisees' salons. Our success is substantially dependent on franchise royalties and the overall success of our franchisees' salons.
Furthermore, as a fully franchised business, we may be exposed to additional legal, compliance and operational risks specific to this business model, including the business failure of unproven new salon owners. Our salons are dependent on a third-party preferred supplier agreement for merchandise. In fiscal year 2023, we entered into a preferred supplier agreement with a supplier.
Furthermore, it may create additional costs, expose us to additional legal and compliance risks, cause disruption to our business and impact our financial condition and results of operation. Our salons are dependent on a third-party preferred supplier agreement for merchandise. We depend on a third-party preferred supplier agreement for merchandise.
Like us, they rely on external vendors for some critical functions and to protect their company data.
Our franchisees may be located in areas that are subject to natural disasters such as severe weather and other potential risks and costs associated with the impacts of climate change. Like us, they rely on external vendors for some critical functions and to protect their company data.
Removed
Since January 9, 2024, the Company’s common stock has traded on the Global Market tier of The Nasdaq Stock Market, LLC (Nasdaq). The Company moved its trading to the Nasdaq after failing to regain compliance with the New York Stock Exchange's minimum market capitalization requirement.
Added
We may be unable to successfully realize the anticipated benefits of the Alline Acquisition. On December 19, 2024, we acquired Alline, a former franchisee of Regis, which immediately prior to the acquisition owned and operated 314 stores under our Cost Cutters, Holiday Hair, and Supercuts brand names (the Alline Stores).
Removed
Under Nasdaq's continued listing standards currently applicable to the Company, the Company is required to maintain, among other things, a market value of publicly held shares of at least $15.0 million. We are currently in compliance with the Nasdaq continued listing standards.
Added
The success of the Alline Acquisition depends on our ability to successfully integrate the Alline Stores with our existing limited network of company-owned stores and operate the Alline Stores as company-owned stores. The anticipated benefits of the Alline Acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Removed
However, if we fail to comply with the currently applicable listing standards, including with regard to the market value of the Company’s publicly held shares, we do not believe we will be able to satisfy alternative listing standards for the Nasdaq Global Market tier and we do not believe we would qualify to transfer to another Nasdaq tier; therefore, our common stock may be delisted from Nasdaq.
Added
We may face significant challenges in realizing the anticipated benefits of the Alline Acquisition, including, without limitation: • the diversion of management’s attention from ongoing business concerns and performance shortfalls as a result of the devotion of management’s attention to the integration of the Alline Stores and Alline personnel; • retaining key business relationships and retaining and attracting employees and stylists; • potential unknown liabilities associated with the Alline Acquisition; and • unforeseen expenses and delays related to the integration of Alline Stores into our system.
Removed
If, for any reason, Nasdaq were to suspend or remove our securities from trading on the Nasdaq Global Market and we were unable to qualify for listing on another tier or national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our shareholders: • the liquidity and marketability of our common stock; • the market price of our common stock; • our ability to obtain financing for the continuation of our operations; • the number of institutional and general investors that will consider investing in our common stock; • the number of market makers in our common stock; • the availability of information concerning the trading prices and volume of our common stock; and • the number of broker-dealers willing to execute trades in shares of our common stock.
Added
Changes to the U.S., Canada, and U.K.'s economies have an impact on our business.
Removed
In addition, if we ceased eligibility for trading on the Nasdaq Global Market, we may have to pursue trading on a less recognized or accepted market, such as the over-the-counter markets, our stock may be traded as a “penny stock” which would make transactions in our stock more difficult and cumbersome, and we may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our common stock.
Added
Materially increasing the number of salons that we own and operate could expose us to additional risk and adversely affect our financial results. Previously, we transitioned to a fully franchised business model. However, in connection with the Alline Acquisition, we acquired 314 stores under our Cost Cutters, Holiday Hair, and Supercuts brand names.
Removed
This may also cause the market price of our common stock to further decline. 17 Table of Contents Operating Risks We are substantially dependent on franchise royalties and the overall success of our franchisees' salons. Our success is substantially dependent on franchise royalties and the overall success of our franchisees' salons.
Added
We now operate 294 salons, or approximately 7.5% of the salons in our system. Operating salons can expose us to additional risks or exacerbate those risks to which we are already exposed as a franchisor. Operating additional salons inherently increases the operating lease costs, advertising and marketing expenses, professional fees and other expenses.
Removed
Failure to control costs may adversely affect our operating results. We must continue to control our expense structure.
Added
Furthermore, as a result of the Alline Acquisition, we initially increased our number of employees by more than 1,600.
Removed
In August of 2024 we executed a workforce reduction.The risks related to the workforce reduction include the potential for business disruption, diversion of time and attention from on-going operations, loss of human capital talent, temporarily reduced productivity and the risk of failing to achieve some or all of the anticipated benefits of the organizational changes.
Added
This increase in employees may expose us to additional liability and operating costs, such as risks associated with labor shortages, minimum wage requirements, employment taxes, increased overtime pay and benefits, increased costs for insurance, employment and labor liability, and regulatory compliance risks.
Removed
If we are unable to successfully manage and implement this workforce reduction, we may not achieve or sustain the expected cost savings benefits or otherwise impair our ability to continue execution of our operations and strategic plans.
Added
We could also be subject to additional liability such as property, environmental and other liability as a result of being a direct operator and lessee of additional salons and liability arising from regulatory compliance.
Removed
From time-to-time in the ordinary course of our business operations, we are subject to litigation, including potential class action and single-plaintiff litigation, arbitration and other legal or regulatory proceedings or claims.
Added
In most markets, we and our franchisees have experienced a shortage of qualified stylists or a reduction in the hours stylists will work. Offering competitive wages, benefits, education, and training programs are important elements to attracting and retaining qualified stylists.
Added
We are implementing a new enterprise resource planning system, and challenges with the planning or implementation of the system may impact our internal control over financial reporting, business and operations. We are undertaking a multi-year process of implementing an enterprise resource planning (“ERP”) system, which is a major undertaking that will replace most of our existing financial systems.
Added
An ERP system is used to maintain financial records, enhance data security and operational functionality and resiliency, and provide timely information to management related to the operation of a business. The implementation will require the integration of the new ERP system with existing information systems and business processes.
Added
Our ERP planning has required, and the ongoing planning and future implementation of the new ERP will continue to require, investment of significant capital and human resources, requiring the attention of members of our management team.
Added
Any deficiencies in the design, or delays or issues encountered in the implementation, of the new ERP 20 Table of Contents system could result in significantly greater capital expenditures and employee time and attention than currently contemplated and could adversely affect our ability to operate our business, including effective management of our invoicing and accounts receivable and collections processes, file timely reports with the SEC or otherwise affect the proper and efficient operation of our controls.
Added
If the system as implemented, or after necessary investments, does not result in our ability to maintain accurate books and records, our financial condition, results of operations, and cash flows could be materially adversely impacted.
Added
If we are unable to adequately plan, implement and maintain procedures and controls relating to our ERP, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired and impact the effectiveness of our internal control over financial reporting.
Added
All of the above could result in harm to our reputation or our customers and franchisees, as well as expose us to regulatory actions or claims, any of which could materially impact our business, results of operations, financial condition and stock price.
Added
Any audit by the Internal Revenue Service with respect to Alline’s receipt of an employee retention credit under The Coronavirus Aid, Relief, and Economic Security (CARES) Act could result in additional taxes or costs to Alline for which we may ultimately be liable.
Added
Alline applied for and received an employee retention credit (ERC) under the CARES Act amounting to approximately $29 million. In July 2023, the Internal Revenue Service (IRS) stated its intention to shift its focus to review ERC claims for compliance concerns, including intensifying audit work.
Added
Although Alline received the amounts related to the ERC from the IRS, no formal determination regarding Alline’s eligibility to claim the ERC was received, and such eligibility remains subject to audit by the IRS.
Added
If the IRS audits Alline during the applicable statute of limitations period and finds that Alline was not eligible to receive all or part of the ERC, Alline would be required to return some or all of the ERC to the IRS, together with any applicable interest and penalties.
Added
While the former owners of Alline would be required to indemnify us for any such amounts required to be repaid to the IRS (together with any applicable interest and penalties, and all reasonable costs and expenses incurred by us in defending or addressing any matters related to the ERC), we may not ultimately be able to timely or fully recoup such amounts from the former owners of Alline.
Added
If we are ultimately required to repay the ERC, and we are unable 21 Table of Contents to sufficiently recover such amounts from the former owners of Alline, our financial condition, results of operations and liquidity may be materially adversely affected. 22 Table of Contents If we are not able to successfully compete in our business markets, our financial results may be affected.
Added
Failure to attract and retain key personnel, including the Chief Executive Officer, could adversely affect the business and prospects. On June 20, 2025, our former President, Chief Executive Officer, and Director, Matthew Doctor, resigned from his positions and as a member of our Board of Directors.
Added
Our Board of Directors appointed our EVP Brand Operations - Supercuts and Cost Cutters, Jim Lain, to serve as interim President and CEO while the Board conducts a comprehensive search for a permanent successor. Mr. Doctor was available in a support role until August 31, 2025.
Added
Although we intend to hire a qualified candidate for CEO, no assurance can be given that we will be able to attract and retain a suitable CEO. An extended period of time without a permanent CEO could potentially have an adverse effect on our operations or financial condition.
Added
Furthermore, in the event we are unable to effect a seamless transition from our Interim CEO to a new CEO, or if a new CEO should unexpectedly prove to be unsuitable for our Company, the resulting disruption could have an adverse effect on our operations or financial condition or impede our ability to execute our strategic plan.
Added
The results of an audit or litigation could have a material effect on our Consolidated Financial Statements in the period or periods where that determination is made. 23 Table of Contents Our actual effective tax rate may vary from our expectation and that variance may be material.
Added
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 will submit the Extension to its shareholders for ratification at the next annual or special meeting of its shareholders.
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+2 added−1 removed3 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+2 added−1 removed3 unchanged
2024 filing
2025 filing
Biggest changeThe Company established a cybersecurity incident response plan, which includes classification of cybersecurity incidents, to whom to escalate an incident, and when to escalate a cybersecurity incident, including direct communication to the Chief Digital Officer ("CDO") and VP of IT, Director, and President. The Company regularly conducts risk assessments and tracks remediation to completion.
Biggest changeThe Company established a cybersecurity incident response plan, which includes classification of cybersecurity incidents, to whom to escalate an incident, and when to escalate a cybersecurity incident, including direct communication to the Director of Information Security, Vice President of IT, our President and our Board of Directors.
Our CDO directs, coordinates, plans, and organizes information security activities throughout the Company, including leading the development of our cybersecurity risk management strategy.
Our Director of Information Security directs, coordinates, plans, and organizes information security activities throughout the Company, including leading the development of our cybersecurity risk management strategy.
Removed
Critical systems are periodically audited against industry standards.
Added
The Audit Committee receives periodic reports on the Company's cybersecurity measures, protections, response plans, etc. The Company regularly conducts risk assessments and tracks remediation to completion. Critical systems are periodically audited against industry standards.
Added
Our Director of Information Security has more than 35 years of relevant IT experience, including 20 years directly managing information security, holds professional certifications including ISC(2)’s Certified Information Systems Security Professional (CISSP—issued 2006) and ISACA’s Certified Information Security Manager (CISM—issued 2006), and has ongoing involvement in various professional organizations, including serving for the last 15 years on the governing body of the Gartner/Evanta Minneapolis CISO summit, and is a member of the Minnesota chapter of ISACA.
Item 2. Properties
Properties — owned and leased real estate
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Item 2. Properties
Properties — owned and leased real estate
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2024 filing
2025 filing
Biggest changeThe Company operates all its company-owned salons under lease agreements with original terms of at least five years, generally with the ability to renew at the Company's option, for one or more additional five-year periods. Approximately half of our company-owned salons had leases that expired in January 2024.
Biggest changeThe Company also exited its Fremont, California office in fiscal year 2023 and the lease obligation expired on September 30, 2024. The Company operates all its company-owned salons under lease agreements with original terms of one to five years, generally with the ability to renew at the Company's option, for one or more additional three to five-year periods.
The Company leases the premises in which approximately 85% of its franchisees operate and has entered into corresponding sublease arrangements with these franchisees. Generally, these leases have a five-year initial term and one or more five-year renewal options. All lease costs are passed through to the franchisees.
The Company leases the premises in which approximately 83% of its franchisees operate and has entered into corresponding sublease arrangements with these franchisees. Generally, these leases have a one to 11-year initial term and one or more five to 10-year renewal options. All lease costs are passed through to the franchisees.
In fiscal year 2022, the Company exited its distribution centers located in Chattanooga, Tennessee and Salt Lake City, Utah and signed agreements to sublease the facilities in the short-term before a full lease novation in fiscal years 2023 and 2024. The Company also exited its Fremont, California office in fiscal year 2023 and the lease obligation expires September 30, 2024.
In fiscal year 2022, the Company exited its distribution centers located in Chattanooga, Tennessee and Salt Lake City, Utah and signed agreements to sublease the facilities in the short-term before a full lease novation in fiscal years 2023 and 2024.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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2024 filing
2025 filing
Biggest changeThe closing stock price was $23.06 per share on August 23, 2024. Dividends In accordance with its capital allocation policy, the Company does not pay cash dividends.
Biggest changeThe closing stock price was $22.15 per share on August 29, 2025. Dividends In accordance with its capital allocation policy, the Company does not pay cash dividends. Share Repurchase Program In May 2000, the Board approved a stock repurchase program with no stated expiration date.
Since that time and through June 30, 2024, 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.
Since that time and through June 30, 2025, 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 depends on many factors, including the market price of the common stock and overall market conditions. During fiscal year 2024, the Company did not repurchase shares. As of June 30, 2024, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remained authorized for repurchase.
The timing and amounts of any repurchases depend on many factors, including the market price of the common stock and overall market conditions. During fiscal year 2025, the Company did not repurchase shares. As of June 30, 2025, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remained authorized for repurchase.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information The Company's common stock is listed and traded on the Nasdaq Global Market under the symbol "RGS." Holders As of August 23, 2024, the Company had approximately 266 shareholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information The Company's common stock is listed and traded on the Nasdaq Global Market under the symbol "RGS." Holders As of August 29, 2025, the Company had approximately 275 shareholders of record.
Removed
Share Issuance Program In February 2021, the Company filed a $150.0 million shelf registration and $50.0 million prospectus supplement with the Securities and Exchange Commission under which it had the ability to offer and sell, from time to time, up to $50.0 million worth of its common stock in "at-the-market" offerings.
Removed
In fiscal year 2022, 464,781 shares were issued for $38.4 million under the prospectus. During fiscal years 2023 and 2024, the Company did not issue any shares under this prospectus. The share issuance program expired on February 10, 2024.
Removed
The Company issued the following common stock through its share issuance program: Fiscal Years 2024 2023 2022 Issued shares — — 464,781 Average price (per share) $ — $ — $82.60 Price range (per share) $ — $ — $75.20 - $119.80 Total $ — $ — $ 38,400,000 Share Repurchase Program In May 2000, the Company's Board of Directors (Board) approved a stock repurchase program with no stated expiration date.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
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Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
57 edited+16 added−18 removed52 unchanged
2024 filing
2025 filing
Biggest changeFiscal Years 2024 2023 2022 2024 2023 2022 2024 2023 (Dollars in millions) % of Total Revenues (1) Increase (Decrease) Royalties $ 64.1 $ 66.0 $ 65.8 31.6 % 28.4 % 23.8 % 320 460 Fees 10.2 11.3 11.6 5.0 4.8 4.2 20 60 Product sales to franchisees 0.5 2.8 15.1 0.2 1.2 5.5 (100) (430) Advertising fund contributions 25.7 31.7 32.6 12.7 13.6 11.8 (90) 180 Franchise rental income 95.3 111.4 130.8 46.9 47.7 47.4 (80) 30 Company-owned salon revenue 7.3 10.1 20.2 3.6 4.3 7.3 (70) (300) Cost of product sales to franchisees 0.4 3.5 17.4 80.0 125.0 115.2 (4,500) 980 Inventory reserve — 1.2 7.7 — 0.5 2.8 (50) (230) General and administrative 45.4 50.8 65.3 22.4 21.8 23.7 60 (190) Rent 5.5 9.2 9.4 2.7 3.9 3.4 (120) 50 Advertising fund expense 25.7 31.7 32.6 12.7 13.6 11.8 (90) 180 Franchise rent expense 95.3 111.4 130.8 46.9 47.7 47.4 (80) 30 Company-owned salon expense 5.1 8.8 22.0 2.5 3.8 8.0 (130) (420) Depreciation and amortization 3.9 7.7 6.2 1.9 3.3 2.2 (140) 110 Long-lived asset impairment 0.8 0.1 0.5 0.4 — 0.2 40 (20) Goodwill impairment — — 13.1 — — 4.7 — (470) Operating income (loss) (2) 20.9 8.8 (28.9) 10.3 3.8 (10.5) 650 1,430 Interest expense (25.4) (22.1) (12.9) (12.5) (9.5) (4.7) (300) (480) Loss from sale of salon assets to franchisees, net — — (2.3) — — (0.8) — 80 Gain on extinguishment of long-term debt, net 94.6 — — 46.6 — — N/A N/A Other, net (0.2) 1.4 (0.3) (0.1) 0.6 (0.1) (70) 70 Income tax (expense) benefit (3) (0.9) 0.7 (2.0) 1.0 5.5 (4.5) N/A N/A Income (loss) from discontinued operations 2.0 4.0 (39.4) 1.0 1.7 (14.3) (70) 1,600 Net income (loss) (2) 91.1 (7.4) (85.9) 44.9 (3.2) (31.1) 4,810 2,790 ____________________________________________________________________________ (1) Cost of product sales to franchisees is computed as a percent of product sales to franchisees.
Biggest changeFiscal Years 2025 2024 2023 2025 2024 2023 2025 2024 (Dollars in millions) % of Total Revenues (1) (Decrease) Increase Royalties $ 58.2 $ 64.1 $ 66.0 27.7 % 31.6 % 28.4 % (390) 320 Fees 9.7 10.2 11.3 4.6 5.0 4.8 (40) 20 Product sales to franchisees — 0.5 2.8 — 0.2 1.2 (20) (100) Advertising fund contributions 21.9 25.7 31.7 10.4 12.7 13.6 (230) (90) Franchise rental income 76.6 95.3 111.4 36.5 46.9 47.7 (1,040) (80) Company-owned salon revenue 43.7 7.3 10.1 20.8 3.6 4.3 1,720 (70) Cost of product sales to franchisees — 0.4 3.5 N/A 80.0 125.0 N/A (4,500) Inventory reserve — — 1.2 — — 0.5 — (50) General and administrative 46.8 45.4 50.8 22.3 22.4 21.8 (10) 60 Rent 10.5 5.5 9.2 5.0 2.7 3.9 230 (120) Advertising fund expense 21.9 25.7 31.7 10.4 12.7 13.6 (230) (90) Franchise rent expense 76.6 95.3 111.4 36.5 46.9 47.7 (1,040) (80) Company-owned salon expense 31.1 5.1 8.8 14.8 2.5 3.8 1,230 (130) Depreciation and amortization 3.0 3.9 7.7 1.4 1.9 3.3 (50) (140) Long-lived asset impairment 0.4 0.8 0.1 0.2 0.4 — (20) 40 Operating income (2) 19.9 20.9 8.8 9.5 10.3 3.8 (80) 650 Interest expense (20.3) (25.4) (22.1) (9.7) (12.5) (9.5) 280 (300) Gain on extinguishment of long-term debt, net — 94.6 — — 46.6 — N/A N/A Other, net 1.8 (0.2) 1.4 0.9 (0.1) 0.6 100 (70) Income tax benefit (expense) (3) 115.5 (0.9) 0.7 55.0 1.0 5.5 N/A N/A Income from discontinued operations 6.5 2.0 4.0 3.1 1.0 1.7 210 (70) Net income (loss) (2) 123.5 91.1 (7.4) 58.8 44.9 (3.2) 1,390 4,810 ____________________________________________________________________________ (1) Cost of product sales to franchisees is computed as a percent of product sales to franchisees.
Recent Accounting Pronouncements Recent accounting pronouncements are discussed in Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. 35 Table of Contents LIQUIDITY AND CAPITAL RESOURCES In June 2024, the Company entered into a new credit agreement with TCW Asset Management Company, LLC, and MidCap Financial Trust, which matures in June 2029.
Recent Accounting Pronouncements Recent accounting pronouncements are discussed in Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. 35 Table of Contents LIQUIDITY AND CAPITAL RESOURCES In June 2024, the Company entered into a new credit agreement with TCW Asset Management Company, LLC, and MidCap Financial Trust, which matures in June 2029 (the 2024 Credit Agreement).
(Zenoti). The Company received $13.0 million in proceeds in June 2022 and received an additional $5.0 million in proceeds in fiscal year 2023, offset by a $0.5 million transaction fee. In fiscal year 2024, the Company received an additional $2.0 million of proceeds that had been previously held back for general indemnity provisions.
The Company received $13.0 million in proceeds in June 2022 and received an additional $5.0 million in proceeds in fiscal year 2023, offset by a $0.5 million transaction fee. In fiscal year 2024, the Company received an additional $2.0 million of proceeds that had been previously held back for general indemnity provisions.
The Company has unfunded deferred compensation contracts covering certain management and executive personnel. We cannot predict the timing or amount of future payments related to these contracts. See Note 11 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. As of June 30, 2024, we have liabilities for uncertain tax positions.
The Company has unfunded deferred compensation contracts covering certain management and executive personnel. We cannot predict the timing or amount of future payments related to these contracts. See Note 11 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. As of June 30, 2025, we have liabilities for uncertain tax positions.
The Company has identified its asset groups at the individual salon level as this represents the lowest level that identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Poor salon performance in fiscal years 2024, 2023, and 2022 resulted in ASC 360-10-35-21 triggering events.
The Company has identified its asset groups at the individual salon level as this represents the lowest level that identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Poor salon performance in fiscal years 2025, 2024, and 2023 resulted in ASC 360-10-35-21 triggering events.
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements or other contractually narrow or limited purposes at June 30, 2024.
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet financial arrangements or other contractually narrow or limited purposes at June 30, 2025.
The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The fair value of the right of use asset is estimated by determining what a market participant would pay over the life of the primary asset in the group, discounted back to June 30, 2024.
The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The fair value of the right of use asset is estimated by determining what a market participant would pay over the life of the primary asset in the group, discounted back to June 30, 2025.
Since that time and through June 30, 2024, 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.
Since that time and through June 30, 2025, 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.
Additional information about the Company's current use of cash is described under "Sources of Liquidity." Cash Requirements The Company's most significant contractual cash requirements as of June 30, 2024, were lease commitments and interest payments.
Additional information about the Company's current use of cash is described under "Sources of Liquidity." Cash Requirements The Company's most significant contractual cash requirements as of June 30, 2025, were lease commitments and interest payments.
Non-current deferred benefits of $5.6 million includes $1.7 million related to a non-qualified deferred salary plan, a salary deferral program of $1.8 million and a bonus deferral plan of $2.1 million related to established contractual payment obligations under retirement and severance agreements for a small number of employees.
Non-current deferred benefits of $5.6 million includes $1.6 million related to a non-qualified deferred salary plan, a salary deferral program of $1.6 million and a bonus deferral plan of $2.4 million related to established contractual payment obligations under retirement and severance agreements for a small number of employees.
The timing and amounts of any repurchases depends on many factors, including the market price of the common stock and overall market conditions. During fiscal year 2024, the Company did not repurchase shares. As of June 30, 2024, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remained authorized for repurchase.
The timing and amounts of any repurchases depend on many factors, including the market price of the common stock and overall market conditions. During fiscal year 2025, the Company did not repurchase shares. As of June 30, 2025, 1.5 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remained authorized for repurchase.
As of June 30, 2024, the unused available credit under the revolving credit facility was $9.8 million and total liquidity per the agreement was $19.9 million. See additional discussion under Financing Arrangements and Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
As of June 30, 2025, the unused available credit under the revolving credit facility was $19.0 million and total liquidity per the agreement was $25.9 million. See additional discussion under Financing Arrangements and Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
During fiscal years 2024, 2023, and 2022, the Company recognized long-lived asset impairment charges of $0.8 million, $0.1 million, and $0.5 million, respectively, related to ROU assets on the Consolidated Statements of Operations in Part II, Item 8 of this Form 10-K.
During fiscal years 2025, 2024, and 2023, the Company recognized long-lived asset impairment charges of $0.4 million, $0.8 million, and $0.1 million, respectively, related to ROU assets on the Consolidated Statements of Operations in Part II, Item 8 of this Form 10-K.
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 (deficit) at fiscal year-end, was as follows: As of June 30, Debt to Capitalization (1) 2024 67.0 % 2023 125.1 % 2022 120.8 % _______________________________________________________________________________ (1) Excludes the long-term lease liability as that liability is offset by the right-of-use (ROU) asset.
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 (deficit) at fiscal year end, was as follows: As of June 30, Debt to Capitalization (1) 2025 40.3 % 2024 67.0 % 2023 125.1 % _______________________________________________________________________________ (1) Excludes the long-term lease liability as that liability is offset by the right-of-use (ROU) asset.
In June 2024, the Company entered into a new credit agreement between TCW Asset Management Company, LLC, and MidCap Financial Trust Company for a $25.0 million revolving credit facility, in addition to a term loan of $105.0 million with a $10.0 million minimum liquidity covenant that expires in June 2029.
In June 2024, the Company entered into a new credit agreement between TCW Asset Management Company, LLC, and MidCap Financial Trust Company which includes a $25.0 million revolving credit facility, a term loan of $105.0 million with a $10.0 million minimum liquidity covenant that expires in June 2029.
The following table summarizes system-wide revenue and system-wide same-store sales (1) by concept: Fiscal Years 2024 2023 2022 (Dollars in millions) System-wide revenue $ 1,179.5 $ 1,230.5 $ 1,228.5 Supercuts 1.6 % 6.9 % 22.1 % SmartStyle (3.5) (2.5) 5.7 Portfolio Brands 2.0 5.5 11.2 Total system-wide same-store sales 0.7 % 4.4 % 14.8 % ____________________________________________________________________________ (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.
The following table summarizes system-wide revenue and system-wide same-store sales by concept: Fiscal Years 2025 2024 2023 (Dollars in millions) System-wide revenue $ 1,104.9 $ 1,179.5 $ 1,230.5 Supercuts 1.3 % 1.6 % 6.9 % SmartStyle (6.1) (3.5) (2.5) Portfolio Brands (0.6) 2.0 5.5 Total system-wide same-store sales (1) (0.6) % 0.7 % 4.4 % ____________________________________________________________________________ (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.
Off-Balance Sheet Arrangements Under the credit agreement entered into in June 2024, the margin applicable to any letter of credit is 5.25% and is paid currently in cash. See Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
Off-Balance Sheet Arrangements Under the 2024 Credit Agreement, as amended, the margin applicable to any letter of credit is 5.25% and is paid currently in cash. See Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
While the determination of whether to record a valuation allowance is not fully governed by a specific objective test, accounting guidance places significant weight on recent financial performance. The Company has a valuation allowance on its deferred tax assets amounting to $181.8 million and $202.2 million at June 30, 2024 and 2023, respectively.
While the determination of whether to record a valuation allowance is not fully governed by a specific objective test, accounting guidance places significant weight on recent financial performance. The Company has a valuation allowance on its deferred tax assets amounting to $60.5 million and $181.8 million at June 30, 2025, and 2024, respectively.
Long-Lived Asset Impairment The Company recorded long-lived asset impairment charges of $0.8 million and $0.1 million in fiscal years 2024 and 2023, respectively. The increase in long-lived asset impairment was primarily due to more right-of-use assets being impaired in fiscal year 2024 resulting from subleasing excess corporate office space to unrelated third parties.
Long-Lived Asset Impairment The Company recorded long-lived asset impairment charges of $0.4 million and $0.8 million in fiscal years 2025 and 2024, respectively. The decrease in long-lived asset impairment was primarily due to more right-of-use assets being impaired in fiscal year 2024 resulting from subleasing excess corporate office space to unrelated third parties.
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. Fiscal Year Ended June 30, 2024, Compared with Fiscal Year Ended June 30, 2023 Franchise Revenue Franchise revenue decreased $27.5 million during fiscal year 2024.
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. Fiscal Year Ended June 30, 2025, Compared with Fiscal Year Ended June 30, 2024 Franchise Revenue Franchise revenue decreased $29.3 million during fiscal year 2025.
BUSINESS DESCRIPTION Regis Corporation (the Company) franchises, owns, and operates beauty salons. As of June 30, 2024, the Company franchised or owned 4,408 salons in North America and the United Kingdom. Each of the Company's salon concepts generally offer similar salon products and services and serve the mass market. As of June 30, 2024, we had 275 corporate employees worldwide.
BUSINESS DESCRIPTION Regis Corporation (the Company) franchises, owns, and operates beauty salons. As of June 30, 2025, the Company franchised or owned 3,941 salons in North America and the United Kingdom. Each of the Company's salon concepts generally offer similar salon products and services and serve the mass market. As of June 30, 2025, we had 1,777 corporate employees worldwide.
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.
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.
See Notes 6 and 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K for further detail. 36 Table of Contents Cash Flows Cash Flows from Operating Activities During fiscal year 2024, cash used in operating activities was $2.0 million.
See Notes 6 and 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K for further detail. 36 Table of Contents Cash Flows Cash Flows from Operating Activities During fiscal year 2025, cash provided by operating activities was $13.7 million.
See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. Income (Loss) from Discontinued Operations The Company recorded income from discontinued operations of $2.0 million and $4.0 million in fiscal years 2024 and 2023, respectively.
See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. Income from Discontinued Operations, net of tax The Company recorded income from discontinued operations, net of tax of $6.5 million and $2.0 million in fiscal years 2025 and 2024, respectively.
The income taxes basis point change is noted as not applicable (N/A) as the discussion below is related to the effective income tax rate. 31 Table of Contents Fiscal Year Ended June 30, 2024, Compared with Fiscal Year Ended June 30, 2023 Royalties During fiscal year 2024, royalties decreased $1.9 million, or 2.9%, primarily due to a decrease in franchise salon count and unfavorable same store sales traffic.
The income taxes basis point change is noted as not applicable (N/A) as the discussion below is related to the effective income tax rate. 31 Table of Contents Fiscal Year Ended June 30, 2025, Compared with Fiscal Year Ended June 30, 2024 Royalties During fiscal year 2025, royalties decreased $5.9 million, or 9.2%, mainly due to a decrease in franchise salon count primarily caused by franchise salon closures and the Alline Acquisition.
The improvement is primarily due to a decrease in general and administrative expense. 34 Table of Contents Company-Owned Salons Fiscal Years 2024 2023 2022 2024 2023 (Dollars in millions) (Decrease) Increase (1) Total revenue $ 7.3 $ 10.1 $ 20.2 $ (2.8) $ (10.1) Company-owned salon adjusted EBITDA $ (0.3) $ (1.8) $ (9.5) $ 1.5 $ 7.7 Total company-owned salons 17 68 105 (51) (37) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding.
The improvement is primarily due to a decrease in general and administrative expense, partially offset by lower royalties and fees. 34 Table of Contents Company-Owned Salons Fiscal Years 2025 2024 2023 2025 2024 (Dollars in millions) Increase (Decrease) (1) Total revenue $ 43.7 $ 7.3 $ 10.1 $ 36.4 $ (2.8) Company-owned salon adjusted EBITDA $ 3.2 $ (0.3) $ (1.8) $ 3.5 $ 1.5 Total company-owned salons 294 17 68 277 (51) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding.
As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships. 39 Table of Contents Dividends The Company has not declared a quarterly dividend payment since December 2013.
As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships. 39 Table of Contents Dividends The Company has not declared a quarterly dividend payment since December 2013. Share Repurchase Program In May 2000, the Board approved a stock repurchase program with no stated expiration date.
Franchise Salons Fiscal Years 2024 2023 2022 2024 2023 (Dollars in millions) Increase (Decrease) (1) Royalties $ 64.1 $ 66.0 $ 65.8 $ (1.9) $ 0.2 Fees 10.2 11.3 11.6 (1.1) (0.3) Product sales to franchisees 0.5 2.8 15.1 (2.3) (12.3) Advertising fund contributions 25.7 31.7 32.6 (6.0) (0.9) Franchise rental income 95.3 111.4 130.8 (16.1) (19.4) Total franchise revenue (1) $ 195.7 $ 223.2 $ 255.8 $ (27.5) $ (32.6) Franchise same-store sales (2) 0.6 % 4.4 % 15.0 % Franchise adjusted EBITDA $ 26.3 $ 22.8 $ 7.7 $ 3.5 $ 15.1 Total franchise salons 4,391 4,795 5,395 (404) (600) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding.
Franchise Salons Fiscal Years 2025 2024 2023 2025 2024 (Dollars in millions) (Decrease) Increase (1) Royalties $ 58.2 $ 64.1 $ 66.0 $ (5.9) $ (1.9) Fees 9.7 10.2 11.3 (0.5) (1.1) Product sales to franchisees — 0.4 2.8 (0.4) (2.4) Advertising fund contributions 21.9 25.7 31.7 (3.8) (6.0) Franchise rental income 76.6 95.3 111.4 (18.7) (16.1) Total franchise revenue (1) $ 166.4 $ 195.7 $ 223.2 $ (29.3) $ (27.5) Franchise same-store sales (2) (0.6) % 0.6 % 4.4 % Franchise adjusted EBITDA $ 28.4 $ 27.8 $ 25.1 $ 0.6 $ 2.7 Total franchise salons 3,647 4,391 4,795 (744) (404) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding.
Interest Expense The $3.3 million increase in interest expense during fiscal year 2024 was primarily due to a higher weighted average interest rate on outstanding borrowings. Gain on Extinguishment of Long-Term Debt, Net In June 2024, the Company recorded a gain of $94.6 million related to the extinguishment of long-term debt.
Interest Expense The $5.1 million decrease in interest expense during fiscal year 2025 was primarily due to less debt outstanding. Gain on Extinguishment of Long-Term Debt, Net In June 2024, the Company recorded a gain of $94.6 million related to the extinguishment of long-term debt.
See Note 5 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. The Company assesses goodwill impairment on an annual basis as of April 30, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
The Company assesses goodwill impairment on an annual basis as of April 30, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Cash Flows from Financing Activities During fiscal year 2024, cash provided by financing activities of $8.4 million was primarily a result of cash proceeds from the June 2024 credit agreement, offset by repayment of long-term debt and debt refinancing fees. 37 Table of Contents Financing Arrangements Financing activities are discussed in Note 8 and Note 16 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
Cash Flows from Financing Activities During fiscal year 2025, cash provided by financing activities of $3.6 million was primarily a result of proceeds from issuance of long-term debt, partially offset by net payments on the revolving credit facility. 37 Table of Contents Financing Arrangements Financing activities are discussed in Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
Product Sales to Franchisees Product sales to franchisees decreased $2.3 million, or 82.1%, during fiscal year 2024, primarily due to the Company's shift in its product business to a third-party distribution model.
Product Sales to Franchisees Product sales to franchisees decreased $0.5 million, or 100.0%, during fiscal year 2025, due to the Company's shift in its product business to a third-party distribution model.
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, of which the latter two are not tested until September 30, 2024. See Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
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. The agreement was amended in December 2024 in connection with the Alline Acquisition (the December 2024 Amendment). See Note 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
If the Company's leverage ratio is less than 3.75 to 1.00, the margin rate is 8.50%. In either scenario, 4.5% of the margin is paid-in-kind (PIK) interest (added to the principal balance and thereafter accruing interest), and the remainder is paid currently in cash. The margin applicable to any letter of credit is 5.25% and paid currently in cash.
In either scenario, 4.5% of the margin is paid-in-kind (PIK) interest (added to the principal balance and thereafter accruing interest), and the remainder is paid currently in cash. The margin applicable to any letter of credit is 5.25% and paid currently in cash.
In fiscal year 2025, the Company expects additional proceeds related to salons migrating to Zenoti. The Zenoti migration was successfully completed in early first quarter, fiscal year 2025.
In fiscal year 2025, the Company received $8.5 million in additional proceeds related to salons migrating to Zenoti. The Zenoti migration was successfully completed in fiscal year 2025.
The decrease in the debt to capitalization ratio as of June 30, 2024, compared to June 30, 2023, was primarily due to extinguishment of long term debt during fiscal year 2024. 38 Table of Contents Contractual Obligations and Commercial Commitments On-Balance Sheet Obligations Our debt obligations are primarily composed of our credit agreement at June 30, 2024.
The decrease in the debt to capitalization ratio as of June 30, 2025, compared to June 30, 2024, was primarily due to higher total shareholder's equity as of June 30, 2025, as a result of earnings during the 2025 period. 38 Table of Contents Contractual Obligations and Commercial Commitments On-Balance Sheet Obligations Our debt obligations are primarily composed of our 2024 Credit Agreement, as amended, at June 30, 2025.
Advertising Fund Expense Advertising fund expense decreased $6.0 million, or 18.9%, during fiscal year 2024, primarily due to the decrease in franchise salon count and a decrease in advertising fund contribution rates. 32 Table of Contents Franchise Rent Expense During fiscal year 2024, franchise rent expense decreased $16.1 million, or 14.5%, primarily due to the decrease in franchise salon count.
Advertising Fund Expense Advertising fund expense decreased $3.8 million, or 14.8%, during fiscal year 2025, primarily due to the decrease in franchise salon count and a decrease in advertising fund contribution rates. 32 Table of Contents Franchise Rent Expense During fiscal year 2025, franchise rent expense decreased $18.7 million, or 19.6%, primarily due to the decrease in franchise salon count and franchisees signing their own leases.
Cost of Product Sales to Franchisees Cost of product sales to franchisees decreased $3.1 million, or 88.6%, primarily due to the Company's shift in its product business to a third-party distribution model.
Cost of Product Sales to Franchisees Cost of product sales to franchisees decreased $0.4 million, or 100.0%, as a result of the Company's shift in its product business to a third-party distribution model.
Income Tax (Expense) Benefit During fiscal year 2024, the Company recognized an income tax expense of $0.9 million, with a corresponding effective tax rate of 1.0%, compared to recognizing an income tax benefit of $0.7 million, with a corresponding effective tax rate of 5.5% during fiscal year 2023.
Income Tax Benefit (Expense) During fiscal year 2025, the Company recognized an income tax benefit of $115.5 million with a corresponding effective tax rate of (7,519.3)% primarily due to the partial release of the valuation allowance on our deferred tax assets, compared to recognizing an income tax expense of $0.9 million, with a corresponding effective tax rate of 1.0% during fiscal year 2024.
(2) Due to the reduction in company-owned salons, the Company cannot redistribute inventory from closed salons causing an increase to the reserve. 29 Table of Contents RESULTS OF OPERATIONS The Company reports its operations in two operating segments: franchise salons and company-owned salons. COVID-19 Impact: The global coronavirus pandemic (COVID-19) had an adverse impact on operations.
In fiscal year 2023, the Company experienced an inventory reserve charge of $1.2 million related to the exit of the distribution centers. 29 Table of Contents RESULTS OF OPERATIONS The Company reports its operations in two operating segments: franchise salons and company-owned salons. COVID-19 Impact: The global coronavirus pandemic (COVID-19) had an adverse impact on operations.
As of June 30, 2024, cash and cash equivalents were $10.1 million, with $9.4 million and $0.7 million within the United States and Canada, respectively. As of June 30, 2024, the Company's borrowing arrangements include a $105.0 million term loan and a $25.0 million revolving credit facility with a $10.0 million minimum liquidity covenant that expires in June 2029.
As of June 30, 2025, the Company's borrowing arrangements include a $118.9 million term loan, $5.4 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.
The margin applicable to the new term loan and revolving credit facility is subject to change based on the Company's total leverage ratio, remeasured at a specific point during the year. When the Company's total leverage ratio is greater than or equal to 3.75 to 1.00, the margin applicable to the new term loan and revolving credit facility is 9.00%.
When the Company's total leverage ratio is greater than or equal to 3.75 to 1.00, the margin applicable to the new term loan and revolving credit facility is 9.00%. If the Company's leverage ratio is less than 3.75 to 1.00, the margin rate is 8.50%.
Derivative activities are discussed in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk." The Company's financing arrangements consist of the following: Twelve months ended June 30, 2024 2023 2024 2023 (Cash interest rate %) (Dollars in thousands) Term loan (1) 9.68% 9.54% $ 105,000 $ 172,268 Deferred financing fees (14,244) (6,471) Term loan, net 90,756 165,797 Revolving credit facility (1) 9.68% 9.54% 10,237 10,000 Paid-in-kind interest 53 1,033 Fair value of warrants issued to lenders (Note 14) (1,501) — Total long-term debt, net $ 99,545 $ 176,830 _______________________________________________________________________________ (1) June 30, 2023 term loan and revolving credit facility had a maturity date of August 31, 2025.
Derivative activities are discussed in Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk." The Company's financing arrangements consist of the following: Twelve months ended June 30, 2025 2024 2025 2024 (Cash interest rate %) (Dollars in thousands) Term loan (1) 9.14% 9.68% $ 118,875 $ 105,000 Deferred financing fees (12,174) (14,244) Paid-in-kind interest 5,376 53 Term loan, net 112,077 90,809 Revolving credit facility (1) 9.14% 9.68% 1,030 10,237 Fair value of warrants issued to lenders (2,314) (1,501) Total debt, net $ 110,793 $ 99,545 less: Long-term debt, current portion (1,100) — Long-term debt, net $ 109,693 $ 99,545 _______________________________________________________________________________ (1) The term loan and revolving credit facility mature on June 24, 2029.
Advertising Fund Contributions Advertising fund contributions decreased $6.0 million, or 18.9%, during fiscal year 2024, primarily due to the decrease in franchise salon count and decrease in advertising fund contribution rates. Franchise Rental Income During fiscal year 2024, franchise rental income decreased $16.1 million, or 14.5%, primarily due to the decrease in franchise salon count.
Advertising Fund Contributions Advertising fund contributions decreased $3.8 million, or 14.8%, during fiscal year 2025, primarily due to the decrease in franchise salon count and a decrease in advertising fund contribution rates.
Cash Flows from Investing Activities During fiscal year 2024, cash provided by investing activities of $1.6 million was primarily related to $2.0 million received related to the sale of OSP.
Cash Flows from Investing Activities During fiscal year 2025, cash used in investing activities of $11.5 million was primarily related to $18.6 million used in the Alline Acquisition, partially offset by $8.5 million received related to the sale of OSP.
Fiscal Year Ended June 30, 2024, Compared with Fiscal Year Ended June 30, 2023 Company-Owned Salon Revenue Company-owned salon revenue declined $2.8 million in fiscal year 2024, primarily due to the closure of loss-generating company-owned salons, partially offset by the recognition of non-cash revenue of $1.3 million due to a change in estimate related to gift card breakage.
Fiscal Year Ended June 30, 2025, Compared with Fiscal Year Ended June 30, 2024 Company-Owned Salon Revenue Company-owned salon revenue improved $36.4 million in fiscal year 2025, primarily due to the Alline Acquisition, partially offset by the closure of loss-generating company-owned salons.
Income in fiscal year 2024 is primarily due to the receipt of $2.0 million sales proceeds related to the sale of OSP that had previously been held back for general indemnity provisions.
Income in fiscal year 2025 is due to proceeds from the sale of OSP related to the number of salons migrating to the Zenoti platform, partially offset by a non-cash income tax expense allocated to discontinued operations, and income in fiscal year 2024 is due to the receipt of sales proceeds related to the sale of OSP that had previously been held back for general indemnity provisions.
We believe the following accounting policies are most critical to aid in fully understanding and evaluating our reported financial condition and results of operations. Goodwill As of June 30, 2024, and 2023, the franchise reporting unit had $173.1 million and $173.8 million of goodwill, respectively, and the company-owned segment had no goodwill at either period.
We believe the following accounting policies are most critical to aid in fully understanding and evaluating our reported financial condition and results of operations.
Additionally, the net gain includes the write off of paid-in-kind interest accruals and the write off of unamortized debt financing fees. Other, Net Other, net declined $1.6 million in fiscal year 2024, primarily due to a $1.1 million grant received from the state of North Carolina related to COVID-19 relief and a class action settlement in fiscal year 2023.
Additionally, the net gain includes the write off of paid-in-kind interest accruals and the write off of unamortized debt financing fees. Other, Net Other, net improved $2.0 million in fiscal year 2025, primarily due to unclaimed property and corporate office sublease income.
The decrease in franchise revenue was primarily due to the decrease in franchise rental income and advertising fund collections as a result of lower salon count and the decrease in product sales to franchisees due to the Company's shift to a third-party distributor model.
The decrease in franchise revenue was primarily due to the decrease in franchise rental income, royalties, and advertising fund collections as a result of lower salon count, primarily driven by the Alline portfolio moving to the Company-owned segment. During fiscal year 2025, franchisees constructed (net of relocations) and closed 18 and 448 franchise salons, respectively.
The interest rate on the new agreement is based on secured overnight financing rate (SOFR) plus margin. The agreement utilizes an interest rate margin that is subject to change year-over-year.
The agreement utilizes an interest rate margin that is subject to change year-over-year. The margin applicable to the new term loan and revolving credit facility is subject to change based on the Company's total leverage ratio, remeasured at a specific point during the year.
Rent The decrease of $3.7 million, or 40.2%, in rent expense during fiscal year 2024 was primarily due to the net reduction in the number of company-owned salons.
Rent The increase of $5.0 million, or 90.9%, in rent expense during fiscal year 2025 was primarily due to Alline Acquisition salon rent expense.
See discussion within Part I, Item 1 of this Form 10-K. As part of the Company's strategic transition to a fully franchised model, the Company sold salons to franchisees.
See discussion within Part I, Item 1 of this Form 10-K. In December 2024, the Company acquired the Alline Salon Group (the Alline Acquisition), its largest franchisee, consisting of 314 salons.
Depreciation and Amortization The decrease of $3.8 million, or 49.4%, in depreciation and amortization during fiscal year 2024 was primarily due to a $2.6 million accelerated depreciation charge in the second quarter of fiscal year 2023 related to the consolidation of office space within the Company's corporate headquarters, partially offset by accelerated depreciation charges in the fourth quarter of fiscal year 2024 related to further consolidation of office space within the corporate headquarters and the net reduction in company-owned salon count.
Company-Owned Salon Expense Company-owned salon expense increased $26.0 million, or 509.8%, during fiscal year 2025, as a result of the strategic Alline Acquisition. Depreciation and Amortization The decrease of $0.9 million, or 23.1%, in depreciation and amortization during fiscal year 2025 was primarily due to company-owned salon closures, partially offset by the Alline Acquisition.
During fiscal year 2024, franchisees purchased 10 salons from the Company and constructed (net of relocations) and closed 15 and 429 franchise salons, respectively. Franchise Adjusted EBITDA During fiscal year 2024, franchise adjusted EBITDA totaled $26.3 million, an improvement of $3.5 million compared to fiscal year 2023.
Franchise Adjusted EBITDA During fiscal year 2025, franchise adjusted EBITDA totaled $28.4 million, an improvement of $0.6 million compared to fiscal year 2024.
The agreement includes typical provisions and financial covenants, including leverage and fixed-charge coverage ratio covenants, of which the latter two are not tested until September 30, 2024. As of June 30, 2024, the unused available credit under the revolving credit facility was $9.8 million and total liquidity per the agreement was $19.9 million.
On December 19, 2024, the Company amended the 2024 Credit Agreement for an additional $15.0 million term loan. The 2024 Credit Agreement, as amended, includes typical provisions and financial covenants, including leverage and fixed-charge coverage ratio covenants.
Company-Owned Salon Expense Company-owned salon expense decreased $3.7 million, or 42.0%, during fiscal year 2024, primarily due to the reduction in company-owned salon count and a decline in product sales.
Franchise Rental Income During fiscal year 2025, franchise rental income decreased $18.7 million, or 19.6%, primarily due to the decrease in franchise salon count and franchisees signing their own leases. Company-Owned Salon Revenue During fiscal year 2025, company-owned salon revenue increased $36.4 million, or 498.6%, due primarily to the Alline Acquisition.
Removed
The impact of these transactions is as follows: Fiscal Years 2024 2023 2022 (Dollars in thousands) Salons sold to franchisees 10 1 110 Cash proceeds received $ — $ — $ — Loss from sale of salon assets to franchisees, net $ — $ — $ (2,334) On June 30, 2022, the Company sold its Opensalon ® Pro (OSP) software-as-a-service solution to Soham Inc.
Added
The transaction provides Regis with a turn-key operating infrastructure and gets the Company closer to salon operations alongside franchisees, and the salon portfolio provides a testing ground for brand and operational initiatives. On June 30, 2022, the Company sold its Opensalon ® Pro (OSP) software-as-a-service solution to Soham Inc. (Zenoti).
Removed
In fiscal years 2024, 2023, and 2022, the Company experienced the following charges related to the exit of the distribution centers: Fiscal Years 2024 2023 2022 Financial Statement Caption (Dollars in thousands) Inventory reserve (1) Inventory reserve $ — $ 1,228 $ 7,655 Inventory valuation adjustment (2) Company-owned salon expense — — 2,823 ____________________________________________________________________________ (1) Includes charges in the third and fourth quarter of fiscal year 2022 associated with the liquidation of distribution center inventory, which primarily related to reserving for personal protective equipment acquired as a result of the COVID-19 pandemic.
Added
As a result, in fiscal year 2023, the Company received a $1.1 million grant from the state of North Carolina included in Other, net on the Consolidated Statements of Operations in Part II, Item 8, of this Form 10-K.
Removed
As a result, the Company received Canadian rent relief, Canadian wage relief, U.S. employee retention payroll tax credits and a grant from the state of North Carolina.
Added
In fiscal year 2025, a net 430 franchise salons, excluding any impact from the Alline Acquisition, have closed. An additional 314 salons were acquired as part of the Alline Acquisition, which will reduce future royalty income. The Alline Acquisition will increase future company-owned salon revenue and expenses.
Removed
In fiscal years 2024, 2023, and 2022, the Company received the following financial assistance: Fiscal Years 2024 2023 2022 Financial Statement Caption (Dollars in thousands) Canadian rent relief Rent $ — $ — $ 1,235 Canadian wage relief Company-owned salon expense — — 1,966 North Carolina COVID-19 grant Other, net — 1,106 — Additionally, in December 2022, the Company paid $2.5 million of social security contributions that had been deferred under the CARES Act.
Added
Fees During fiscal year 2025, fees decreased $0.5 million, or 4.9%, primarily due to salon closures and lower rebate fees from franchise product vendors, offset partially by terminated franchise fees related to the acquisition of the Alline salons.
Removed
In fiscal year 2024, a net 404 franchise salons have closed, which reduces future royalty income.
Added
General and Administrative The increase of $1.4 million, or 3.1%, in general and administrative expense during fiscal year 2025 was primarily due to acquisition related costs of $1.4 million, as well as operating expenses related to Alline, offset partially by company-wide cost saving measures.
Removed
This was partially offset by increased prices within our same store sales. Fees During fiscal year 2024, fees decreased $1.1 million, or 9.7%, primarily due to a decrease in terminated development agreements year over year.
Added
Company-Owned Salon Adjusted EBITDA During fiscal year 2025, company-owned salon adjusted EBITDA improved $3.5 million, primarily due to the Alline Acquisition, partially offset by the wind-down of underperforming company-owned stores.
Removed
Company-Owned Salon Revenue During fiscal year 2024, company-owned salon revenue decreased $2.8 million, or 27.7%, due to the decrease in company-owned salon count, partially offset by the recognition of non-cash revenue related to a change in estimate for gift card breakage.
Added
As of June 30, 2025, cash and cash equivalents were $17.0 million, with $16.0 million and $1.0 million within the United States and Canada, respectively.
Removed
General and Administrative The decrease of $5.4 million, or 10.6%, in general and administrative expense during fiscal year 2024 was primarily due to lower compensation resulting from headcount reductions, lower legal and professional fees and less technical education spend.
Added
Cash provided by operations improved year over year due primarily to an $8.4 million build in restricted ad fund cash, our lower cost structure, less cash used for working capital, and lower cash interest.
Removed
Income in fiscal year 2023 is primarily due to the receipt of $5.0 million sales proceeds offset by a $0.5 million transaction fee and other expenses from the sale of OSP.
Added
As of June 30, 2025, the unused available credit under the revolving credit facility was $19.0 million, outstanding letters of credit were $6.0 million, and total liquidity per the agreement was $25.9 million. The interest rate on the 2024 Credit Agreement is based on the secured overnight financing rate (SOFR) plus margin.
Removed
Company-Owned Salon Adjusted EBITDA During fiscal year 2024, company-owned salon adjusted EBITDA improved $1.5 million, primarily due to a change in estimate related to gift card breakage in addition to the closure of unprofitable salons. Fiscal year 2023 also benefited from a $1.1 million grant received from the state of North Carolina related to COVID-19 relief.
Added
Goodwill As of June 30, 2025, and 2024, the franchise reporting unit had $173.2 million and $173.1 million of goodwill, respectively, and the company-owned segment had $10.3 million goodwill relating to the Alline Acquisition as of June 30, 2025. See Note 5 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.
Removed
In February 2021, the Company filed a $150.0 million shelf registration and $50.0 million prospectus supplement with the Securities and Exchange Commission under which it had the ability to offer and sell, from time to time, up to $50.0 million worth of its common stock in "at-the-market" offerings.
Added
Significant changes to the valuation allowance that occurred during fiscal year 2025 are as follows: • We have determined that it is more likely than not that the majority of our U.S. federal and state deferred tax assets will be realizable as of June 30, 2025.
Removed
In fiscal year 2022, 464,781 shares were issued for $38.4 million under the prospectus. During fiscal years 2023 and 2024, the Company did not issue any shares under this prospectus. The share issuance program expired on February 10, 2024. Uses of Cash The Company closely manages its liquidity and capital resources.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
4 edited+0 added−0 removed6 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
4 edited+0 added−0 removed6 unchanged
2024 filing
2025 filing
Biggest changeDuring fiscal years 2024, 2023, and 2022, the Company recorded foreign currency losses of $0.5 million, $0.3 million, and $0.6 million in income (loss) from continuing operations, respectively, in the Consolidated Financial Statements. 44 Table of Contents
Biggest changeDuring fiscal years 2025, 2024, and 2023, the Company recorded foreign currency losses of $0.1 million, $0.5 million, and $0.3 million in income (loss) from continuing operations, respectively, in the Consolidated Financial Statements. 44 Table of Contents
Interest Rate Risk: The Company's interest payments are based on the SOFR, such that a hypothetical 100 basis point increase or decrease in the SOFR will have an impact on our annual cash flows of approximately $1.0 million annually.
Interest Rate Risk: The Company's interest payments are based on the SOFR, such that a hypothetical 100 basis point increase or decrease in the SOFR will have an impact on our annual cash flows of approximately $1.2 million annually.
As a result, the Company may engage in transactions involving various derivative instruments to hedge assets, liabilities and purchases denominated in foreign currencies. As of June 30, 2024, the Company did not have any derivative instruments to manage its foreign currency risk.
As a result, the Company may engage in transactions involving various derivative instruments to hedge assets, liabilities and purchases denominated in foreign currencies. As of June 30, 2025, the Company did not have any derivative instruments to manage its foreign currency risk.
As of June 30, 2024, the Company had outstanding variable rate debt of $115.3 million, and the Company did not have any outstanding interest rate swaps. SOFR variability does not impact our letters of credit, which are charged at a fixed rate of 5.25%. Foreign Currency Exchange Risk: Over 90% of the Company's operations are transacted in U.S. dollars.
As of June 30, 2025, the Company had outstanding variable rate debt of $125.3 million, and the Company did not have any outstanding interest rate swaps. SOFR variability does not impact our letters of credit, which are charged at a fixed rate of 5.25%. Foreign Currency Exchange Risk: Over 90% of the Company's operations are transacted in U.S. dollars.