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    William Charters • Sabal Capital Management

    William Charters's questions to Regis Corp (RGS) leadership

    William Charters's questions to Regis Corp (RGS) leadership • Q3 2025

    Question

    William Charters of Sabal Capital Management asked for clarification on the accounting for the Alline acquisition and its impact on company-owned EBITDA, inquired about the drivers behind the quarterly store count decline, questioned the same-store sales lift from remodels, and sought details on capital allocation priorities for the company's growing cash balance.

    Answer

    CFO Kersten Zupfer confirmed that the Alline acquisition shifts revenue from franchise royalties to company-owned salon EBITDA. President and CEO Matthew Doctor explained that the modest Q3 Alline contribution was due to integration timing, wage pressures, and weather, with strategic changes implemented at the end of March showing positive April results. He noted store closures are proceeding as expected and will lessen in magnitude, with formal guidance being considered for future quarters. Doctor also mentioned that while remodels have shown a modest 5% lift at SmartStyle, targeted corporate remodels have yielded over 20% sustained price increases, a theory they will explore further. Regarding capital, he prioritized contractually obligated debt paydown, maintaining liquidity, and then funding high-ROI internal growth initiatives, ruling out broad franchisee acquisitions for now.

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    William Charters's questions to Regis Corp (RGS) leadership • Q3 2025

    Question

    The analyst inquired about the accounting and financial performance of the recent Alline acquisition, the pace of store closures and future guidance, the sales impact of store remodels, and the company's capital allocation strategy for its growing cash balance.

    Answer

    The executives confirmed the accounting treatment for the Alline acquisition, explaining that lower royalty revenue is offset by higher company-owned salon EBITDA. The modest initial contribution from Alline was attributed to integration timing, seasonal weakness, and wage pressures, with improvements seen after strategic changes were implemented. They reiterated that store closures are proceeding as expected and will slow down, and that formal guidance is being considered for a future quarter. Store remodels have shown a modest lift, with more significant potential being explored. Capital allocation priorities are debt paydown, maintaining liquidity, and reinvesting in strategic initiatives, with no plans for further large-scale acquisitions.

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