Regis Corp.’s (RGS) fourth quarter 2010 earnings fell short of the Zacks Consensus Estimate, due to a decline in revenues. Slower traffic and limited new product introduction due to economic concerns remain a drag on same-store sales.
Moreover, same-store sales are unlikely to be positive before second half of 2011, as consumer behavior has changed in this difficult economic scenario. Consumers across the globe are cutting back on expenditure, resulting in a slowdown in spending and longer recesses between salon visits. The company also faces lingering risks from fashion changes.
Strategic alternatives are currently being evaluated; however, with no further update, we see limited near-term growth catalysts. Hence, we downgraded our rating from Neutral to Underperform.
REGIS CORP/MN (RGS): Free Stock Analysis Report
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