Guess who's coming in for its quarterly haircut? Yes, that's right, Regis
Regis now expects to earn between $0.45 and $0.48 per share, well below the $0.55 to $0.60 that the company had originally projected. Regis is also expecting profit for its quarter ending in June to come in below last year's fiscal-fourth-quarter showing.
Even though CEO Paul Finkelstein considers the factors making for a difficult retail environment to be "near-term in nature," you would be right to challenge that suggestion. Regis also warned in September that it would come up short, but back then it blamed hurricanes Rita and Katrina. Florida's devastating windstorms also seemed to cause a bad hair day at Regis in the fall of 2004.
Between the hurricane-related misses, you can go back to April of 2005, when Regis warned that it would miss its mark even then. Finklestein's response at the time was a now-familiar one: "We believe most of the incremental and unexpected third-quarter expenses are short-term in nature."
Short-term in nature? Either stop recycling the tired prognostications or give investors a little credit. My memory is neither near-term nor short-term in nature. And, sadly enough, neither are Regis' problems.
The perpetual hosedowns eventually got to Tom Gardner. He had recommended Regis to Motley Fool Stock Advisor newsletter subscribers two years ago and eventually suggested that investors sell -- at a meager profit -- in November of 2005 because Regis "continued its pattern of revising guidance down before issuing earnings."
Now that's the kind of juicy forecast that I can sink my teeth into.
Regis isn't necessarily broken so much as it is deluded in dismissing near-term woes as temporary. String a few of its disappointing quarters and the company's attendant excuses together, and you've got a thinking problem. Yes, Regis competes in a competitive market, but that isn't stopping chains like the male-friendly Sport Clips from growing. Until a company like iRobot comes out with a robotic stylist or we all go bald, Regis should be the same dependable producer of predictable operating results that it had been until it started stumbling nearly two years ago.
This was the same fragmented sector, after all, that Regis had capitalized on by frenetically acquiring smaller chains. No more excuses, Finkelstein. Or, at the very least, come up with a new one.
Longtime Fool contributor Rick Munarriz has gotten his hair snipped at a Regis' Supercuts in the past, and he'll do so again. iRobot is a Motley Fool Rule Breakers newsletter recommendation. Rick is part of the Rule Breakers research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story.The Fool has a disclosure policy.