0000716643FALSE2024FYP3YP3YP3YP3YP1YP5Y0.05P1YP1YP1YP1YP1YP3YP1YP5YP6YP6YP3YP3YP1YP1YP3Yiso4217:USDxbrli:sharesiso4217:USDxbrli:sharesrgs:segmentrgs:salonrgs:distributionCenterxbrli:purergs:leasergs:hour00007166432023-07-012024-06-300000716643us-gaap:CommonStockMember2023-07-012024-06-300000716643us-gaap:PreferredStockMember2023-07-012024-06-3000007166432023-12-3100007166432024-08-2300007166432024-06-3000007166432023-06-300000716643us-gaap:RoyaltyMember2023-07-012024-06-300000716643us-gaap:RoyaltyMember2022-07-012023-06-300000716643us-gaap:RoyaltyMember2021-07-012022-06-300000716643rgs:FeesMember2023-07-012024-06-300000716643rgs:FeesMember2022-07-012023-06-300000716643rgs:FeesMember2021-07-012022-06-300000716643rgs:FranchiseesProductsMember2023-07-012024-06-300000716643rgs:FranchiseesProductsMember2022-07-012023-06-300000716643rgs:FranchiseesProductsMember2021-07-012022-06-300000716643us-gaap:AdvertisingMember2023-07-012024-06-300000716643us-gaap:AdvertisingMember2022-07-012023-06-300000716643us-gaap:AdvertisingMember2021-07-012022-06-3000007166432022-07-012023-06-3000007166432021-07-012022-06-300000716643rgs:CompanyOwnedSalonProductsAndServicesMember2023-07-012024-06-300000716643rgs:CompanyOwnedSalonProductsAndServicesMember2022-07-012023-06-300000716643rgs:CompanyOwnedSalonProductsAndServicesMember2021-07-012022-06-300000716643rgs:NonFranchiseLeaseMember2023-07-012024-06-300000716643rgs:NonFranchiseLeaseMember2022-07-012023-06-300000716643rgs:NonFranchiseLeaseMember2021-07-012022-06-300000716643us-gaap:FranchisorMember2023-07-012024-06-300000716643us-gaap:FranchisorMember2022-07-012023-06-300000716643us-gaap:FranchisorMember2021-07-012022-06-300000716643us-gaap:CommonStockMember2021-06-300000716643us-gaap:AdditionalPaidInCapitalMember2021-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000716643us-gaap:RetainedEarningsMember2021-06-3000007166432021-06-300000716643us-gaap:RetainedEarningsMember2021-07-012022-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012022-06-300000716643us-gaap:CommonStockMember2021-07-012022-06-300000716643us-gaap:AdditionalPaidInCapitalMember2021-07-012022-06-300000716643us-gaap:CommonStockMember2022-06-300000716643us-gaap:AdditionalPaidInCapitalMember2022-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000716643us-gaap:RetainedEarningsMember2022-06-3000007166432022-06-300000716643us-gaap:RetainedEarningsMember2022-07-012023-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012023-06-300000716643us-gaap:AdditionalPaidInCapitalMember2022-07-012023-06-300000716643us-gaap:CommonStockMember2022-07-012023-06-300000716643us-gaap:CommonStockMember2023-06-300000716643us-gaap:AdditionalPaidInCapitalMember2023-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300000716643us-gaap:RetainedEarningsMember2023-06-300000716643us-gaap:RetainedEarningsMember2023-07-012024-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012024-06-300000716643us-gaap:AdditionalPaidInCapitalMember2023-07-012024-06-300000716643us-gaap:CommonStockMember2024-06-300000716643us-gaap:AdditionalPaidInCapitalMember2024-06-300000716643us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300000716643us-gaap:RetainedEarningsMember2024-06-300000716643rgs:FranchiseSegmentMember2023-06-300000716643rgs:FranchiseSegmentMember2024-06-300000716643rgs:FranchiseSegmentMember2023-07-012024-06-300000716643rgs:CompanyownedSegmentMember2023-06-300000716643rgs:CompanyownedSegmentMember2024-06-300000716643rgs:CompanyownedSegmentMember2023-07-012024-06-3000007166432022-12-012022-12-3100007166432021-12-012021-12-310000716643rgs:InventoryReserveMember2021-07-012022-06-300000716643rgs:CompanyOwnedSalonExpenseMember2021-07-012022-06-300000716643srt:MaximumMemberus-gaap:BuildingImprovementsMember2024-06-300000716643srt:MinimumMemberus-gaap:EquipmentMember2024-06-300000716643srt:MinimumMemberus-gaap:ComputerSoftwareIntangibleAssetMember2024-06-300000716643srt:MinimumMemberus-gaap:FurnitureAndFixturesMember2024-06-300000716643srt:MaximumMemberus-gaap:EquipmentMember2024-06-300000716643srt:MaximumMemberus-gaap:ComputerSoftwareIntangibleAssetMember2024-06-300000716643srt:MaximumMemberus-gaap:FurnitureAndFixturesMember2024-06-300000716643srt:MinimumMemberus-gaap:SoftwareDevelopmentMember2024-06-300000716643srt:MaximumMemberus-gaap:SoftwareDevelopmentMember2024-06-300000716643srt:MinimumMember2024-06-300000716643srt:MaximumMember2024-06-300000716643rgs:FranchiseReportingUnitMember2024-06-300000716643rgs:FranchiseReportingUnitMember2023-06-300000716643rgs:CompanyOwnedReportingUnitMember2024-06-300000716643rgs:CompanyOwnedReportingUnitMember2023-06-300000716643us-gaap:MeasurementInputDiscountRateMember2022-07-012023-06-3000007166432022-01-012022-03-310000716643us-gaap:MeasurementInputDiscountRateMember2021-07-012022-06-300000716643rgs:OpensalonProMember2021-07-012022-06-3000007166432023-11-290000716643us-gaap:ShippingAndHandlingMember2021-07-012022-06-300000716643us-gaap:ShippingAndHandlingMember2022-07-012023-06-300000716643us-gaap:ShippingAndHandlingMember2023-07-012024-06-300000716643rgs:TermLoanMemberus-gaap:LineOfCreditMember2024-06-242024-06-240000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-06-242024-06-240000716643us-gaap:LineOfCreditMember2024-06-242024-06-240000716643us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2024-06-242024-06-2400007166432023-11-292023-11-290000716643us-gaap:TransferredOverTimeMember2023-07-012024-06-300000716643rgs:GiftCardsMember2024-04-012024-06-300000716643rgs:GiftCardsMember2024-06-300000716643rgs:GiftCardsMember2023-06-300000716643rgs:FranchiseFeesOpenedSalonsMember2024-06-300000716643rgs:FranchiseFeesOpenedSalonsMember2023-06-300000716643rgs:FranchiseFeesUnopenedSalonsMember2024-06-300000716643rgs:FranchiseFeesUnopenedSalonsMember2023-06-300000716643rgs:FranchiseFeesMember2023-07-012024-06-300000716643rgs:FranchiseFeesMember2022-07-012023-06-300000716643rgs:FranchiseFeesMember2021-07-012022-06-3000007166432024-07-012024-06-3000007166432025-07-012024-06-3000007166432026-07-012024-06-3000007166432027-07-012024-06-3000007166432028-07-012024-06-3000007166432029-07-012024-06-300000716643rgs:OpensalonProMember2022-06-012022-06-300000716643rgs:OpensalonProMember2022-07-012023-06-300000716643rgs:OpensalonProMember2023-07-012024-06-300000716643us-gaap:BuildingAndBuildingImprovementsMember2024-06-300000716643us-gaap:BuildingAndBuildingImprovementsMember2023-06-300000716643rgs:EquipmentFurnitureAndLeaseholdImprovementsMember2024-06-300000716643rgs:EquipmentFurnitureAndLeaseholdImprovementsMember2023-06-300000716643us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-06-300000716643us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-06-300000716643rgs:BrandAssetsAndTradeNamesMember2024-06-300000716643rgs:BrandAssetsAndTradeNamesMember2023-06-300000716643us-gaap:FranchiseRightsMember2024-06-300000716643us-gaap:FranchiseRightsMember2023-06-300000716643rgs:OtherFiniteLivedIntangibleAssetsMember2024-06-300000716643rgs:OtherFiniteLivedIntangibleAssetsMember2023-06-300000716643rgs:FranchiseSegmentMember2022-06-300000716643rgs:FranchiseSegmentMember2022-07-012023-06-300000716643rgs:FranchiseLeaseMember2023-07-012024-06-300000716643rgs:FranchiseLeaseMember2022-07-012023-06-300000716643us-gaap:OperatingSegmentsMemberrgs:FranchiseSegmentMember2024-06-300000716643us-gaap:OperatingSegmentsMemberrgs:CompanyownedSegmentMember2024-06-300000716643us-gaap:CorporateNonSegmentMember2024-06-300000716643us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-07-012024-06-300000716643us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-07-012023-06-300000716643us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2021-07-012022-06-300000716643rgs:TermLoanMemberus-gaap:LineOfCreditMember2024-06-300000716643rgs:TermLoanMemberus-gaap:LineOfCreditMember2023-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2023-06-300000716643us-gaap:LineOfCreditMember2024-06-3000007166432024-06-012024-06-300000716643us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2024-06-302024-06-300000716643us-gaap:LineOfCreditMember2024-06-012024-06-300000716643rgs:TermLoanMemberus-gaap:LineOfCreditMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-06-012024-06-300000716643rgs:TermLoanMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-06-240000716643us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrMemberrgs:VariableRateComponentOneMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrMemberrgs:VariableRateComponentTwoMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberrgs:VariableRateComponentTwoMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrMemberrgs:VariableRateComponentThreeMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberrgs:VariableRateComponentThreeMember2024-06-012024-06-300000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:BaseRateMember2024-06-012024-06-3000007166432022-06-152022-06-150000716643us-gaap:DomesticCountryMember2024-06-300000716643us-gaap:StateAndLocalJurisdictionMember2024-06-300000716643us-gaap:ForeignCountryMemberus-gaap:CanadaRevenueAgencyMember2024-06-300000716643us-gaap:ForeignCountryMemberus-gaap:HerMajestysRevenueAndCustomsHMRCMember2024-06-300000716643us-gaap:DomesticCountryMember2023-07-012024-06-300000716643us-gaap:StateAndLocalJurisdictionMember2023-07-012024-06-300000716643us-gaap:CapitalLossCarryforwardMember2024-06-300000716643rgs:RegisRetirementSavingsPlanMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2023-07-012024-06-300000716643us-gaap:DeferredProfitSharingMember2023-07-012024-06-300000716643us-gaap:EmployeeStockMemberrgs:StockPurchasePlanMember2023-07-012024-06-300000716643us-gaap:EmployeeStockMemberrgs:StockPurchasePlanMember2024-06-300000716643us-gaap:AccruedLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2024-06-300000716643us-gaap:AccruedLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2023-06-300000716643us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2024-06-300000716643us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2023-06-300000716643us-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2024-06-300000716643us-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMember2023-06-300000716643us-gaap:GeneralAndAdministrativeExpenseMemberrgs:FormerViceChairmanMember2024-06-300000716643us-gaap:GeneralAndAdministrativeExpenseMemberrgs:FormerViceChairmanMember2023-06-300000716643us-gaap:GeneralAndAdministrativeExpenseMemberrgs:FormerViceChairmanMember2022-06-300000716643us-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMemberrgs:FormerViceChairmanMember2023-07-012024-06-300000716643us-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMemberrgs:FormerViceChairmanMember2022-07-012023-06-300000716643us-gaap:AccruedLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMemberrgs:FormerViceChairmanMember2024-06-300000716643us-gaap:AccruedLiabilitiesMemberus-gaap:DeferredCompensationArrangementWithIndividualByTypeOfCompensationPensionAndOtherPostretirementBenefitsMemberrgs:FormerViceChairmanMember2023-06-300000716643us-gaap:CommonStockMember2022-07-012023-06-300000716643us-gaap:CommonStockMember2021-07-012022-06-300000716643rgs:EquityBasedCompensationAwardsMember2023-07-012024-06-300000716643rgs:EquityBasedCompensationAwardsMember2022-07-012023-06-300000716643rgs:EquityBasedCompensationAwardsMember2021-07-012022-06-300000716643rgs:A2018LongTermIncentivePlanMember2024-06-300000716643rgs:A2018LongTermIncentivePlanMember2023-07-012024-06-300000716643us-gaap:StockAppreciationRightsSARSMember2023-07-012024-06-300000716643us-gaap:StockAppreciationRightsSARSMember2022-07-012023-06-300000716643us-gaap:StockAppreciationRightsSARSMember2021-07-012022-06-300000716643us-gaap:RestrictedStockUnitsRSUMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMember2022-07-012023-06-300000716643us-gaap:RestrictedStockUnitsRSUMember2021-07-012022-06-300000716643srt:MinimumMember2023-07-012024-06-300000716643srt:MaximumMember2023-07-012024-06-300000716643srt:MinimumMember2022-07-012023-06-300000716643srt:MaximumMember2022-07-012023-06-300000716643srt:MinimumMember2021-07-012022-06-300000716643srt:MaximumMember2021-07-012022-06-300000716643us-gaap:EmployeeStockOptionMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMember2022-07-012023-06-300000716643us-gaap:EmployeeStockOptionMember2021-07-012022-06-300000716643rgs:A2018Plan2016PlanAnd2004PlanMemberus-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2023-07-012024-06-300000716643rgs:A2018Plan2016PlanAnd2004PlanMemberus-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2023-07-012024-06-300000716643rgs:A2018Plan2016PlanAnd2004PlanMemberus-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2023-07-012024-06-300000716643us-gaap:StockAppreciationRightsSARSMemberrgs:A2018Plan2016PlanAnd2004PlanMember2023-07-012024-06-300000716643rgs:A2018Plan2016PlanAnd2004PlanMemberus-gaap:StockAppreciationRightsSARSMembersrt:MinimumMember2023-07-012024-06-300000716643rgs:A2018Plan2016PlanAnd2004PlanMemberus-gaap:StockAppreciationRightsSARSMembersrt:MaximumMember2023-07-012024-06-300000716643us-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-07-012023-06-300000716643us-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-07-012023-06-300000716643us-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2022-07-012023-06-300000716643us-gaap:StockAppreciationRightsSARSMemberrgs:FormerChiefExecutiveOfficerMember2022-07-012023-06-300000716643us-gaap:StockAppreciationRightsSARSMember2023-06-300000716643us-gaap:StockAppreciationRightsSARSMember2024-06-300000716643us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMembersrt:MinimumMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMembersrt:MaximumMember2023-07-012024-06-300000716643us-gaap:EmployeeStockOptionMemberrgs:NonEmployeeDirectorsMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberrgs:GrantDateAnniversaryMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMemberrgs:GrantDateAnniversaryMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberrgs:PeriodAfterGrantDateMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMembersrt:MedianMemberrgs:PeriodAfterGrantDateMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMemberrgs:PeriodAfterGrantDateMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMemberrgs:NonEmployeeDirectorsMember2023-07-012024-06-300000716643us-gaap:RestrictedStockUnitsRSUMember2023-06-300000716643us-gaap:RestrictedStockUnitsRSUMember2024-06-3000007166432024-06-2400007166432024-06-242024-06-240000716643rgs:ShelfRegistrationMember2021-02-012021-02-280000716643rgs:ProspectusSupplementMember2021-02-012021-02-280000716643rgs:AtTheMarketOfferingMember2021-02-012021-02-2800007166432000-05-3100007166432003-08-3100007166432005-05-3100007166432007-04-3000007166432015-04-3000007166432015-09-3000007166432016-01-3100007166432018-08-310000716643us-gaap:OperatingSegmentsMemberrgs:FranchiseSegmentMember2023-07-012024-06-300000716643us-gaap:OperatingSegmentsMemberrgs:FranchiseSegmentMember2022-07-012023-06-300000716643us-gaap:OperatingSegmentsMemberrgs:FranchiseSegmentMember2021-07-012022-06-300000716643us-gaap:OperatingSegmentsMemberrgs:CompanyownedSegmentMember2023-07-012024-06-300000716643us-gaap:OperatingSegmentsMemberrgs:CompanyownedSegmentMember2022-07-012023-06-300000716643us-gaap:OperatingSegmentsMemberrgs:CompanyownedSegmentMember2021-07-012022-06-300000716643us-gaap:OperatingSegmentsMemberrgs:ReportableSegmentsMember2023-07-012024-06-300000716643us-gaap:OperatingSegmentsMemberrgs:ReportableSegmentsMember2022-07-012023-06-300000716643us-gaap:OperatingSegmentsMemberrgs:ReportableSegmentsMember2021-07-012022-06-300000716643us-gaap:OperatingSegmentsMember2023-07-012024-06-300000716643us-gaap:OperatingSegmentsMember2022-07-012023-06-300000716643us-gaap:OperatingSegmentsMember2021-07-012022-06-300000716643country:US2023-07-012024-06-300000716643country:US2024-06-300000716643country:US2022-07-012023-06-300000716643country:US2023-06-300000716643country:US2021-07-012022-06-300000716643country:US2022-06-300000716643us-gaap:NonUsMember2023-07-012024-06-300000716643us-gaap:NonUsMember2024-06-300000716643us-gaap:NonUsMember2022-07-012023-06-300000716643us-gaap:NonUsMember2023-06-300000716643us-gaap:NonUsMember2021-07-012022-06-300000716643us-gaap:NonUsMember2022-06-300000716643us-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMember2024-08-280000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMember2024-07-012024-08-280000716643us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMember2024-08-2300007166432024-04-012024-06-30

(Exact name of registrant as specified in its charter)

Minnesota

41-0749934

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3701 Wayzata Boulevard,

Minneapolis

Minnesota

55416

(Address of principal executive offices)

(Zip Code)

(952) 947-7777

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ☐  No ☒

The aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which common equity was last sold as of the last business day of the registrant's most recently completed second fiscal quarter, December 31, 2023, was approximately $21,386,022. The registrant has no non-voting common equity.

As of August 23, 2024, the registrant had 2,279,948 shares of Common Stock, par value $0.05 per share, issued and outstanding.

Portions of the registrant's definitive Proxy Statement for the annual fiscal 2024 meeting of shareholders (the "2024 Proxy Statement") (to be filed pursuant to Regulation 14A within 120 days after the registrant's fiscal year-end of June 30, 2024) are incorporated by reference into Part III.

This annual report, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission (the SEC) and information contained in written material, press releases and oral statements issued by or on behalf of the Company contains or may contain "forward-looking statements" within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management's best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, "may," "believe," "project," "forecast," "expect," "estimate," "anticipate," and "plan." In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These uncertainties include a potential material adverse impact on our business and results of operations as a result of changes in consumer shopping trends and changes in manufacturer distribution channels; laws and regulations could require us to modify current business practices and incur increased costs including increases in minimum wages; changes in general economic environment; changes in consumer tastes, hair product innovation, fashion trends and consumer spending patterns; compliance with Nasdaq listing requirements; reliance on franchise royalties and overall success of our franchisees’ salons; our salons' dependence on a third-party supplier agreement for merchandise; our franchisees' ability to attract, train and retain talented stylists and salon leaders; the success of our franchisees, which operate independently; data security and privacy compliance and our ability to manage cyber threats and protect the security of potentially sensitive information about our guests, franchisees, employees, vendors or Company information; the ability of the Company to maintain a satisfactory relationship with Walmart; marketing efforts to drive traffic to our franchisees' salons; our ability to maintain and enhance the value of our brands; reliance on information technology systems; reliance on external vendors; the use of social media; the effectiveness of our enterprise risk management program; ability to generate sufficient cash flow to satisfy our debt service obligations; compliance with covenants in our financing arrangement; premature termination of agreements with our franchisees; the continued ability of the Company to implement cost reduction initiatives and achieve expected cost savings; continued ability to compete in our business markets; reliance on our management team and other key personnel; the continued ability to maintain an effective system of internal control over financial reporting; changes in tax exposure; the ability of our Tax Preservation Plan to protect the future availability of the Company's tax assets; potential litigation and other legal or regulatory proceedings; or other factors not listed above. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A of this Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K, 10-Q, and 8-K and Proxy Statements on Schedule 14A.

Regis Corporation franchises and owns hair care salons. The Company is listed on the Nasdaq Global Market under the ticker symbol "RGS." Unless the context otherwise provides, when we refer to the "Company," "we," "our," or "us," we are referring to Regis Corporation, the Registrant, together with its subsidiaries.

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. Salons also sell a variety of hair care and other beauty products. We earn royalty revenue based on service and product sales at our franchise locations and earn revenue for services and products sold at our company-owned salons. 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.

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. The remaining 17 company-owned salons will be sold or closed when the related leases expire or terminate.

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. 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.

At the individual salon level, barriers to entry are low; however, barriers exist for chains to expand nationally due to the need to establish systems and infrastructure, the ability to recruit franchisees, experienced field and salon management and stylists, and to lease quality sites. 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.

General.    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.    The Company does not control the day-to-day operations of its franchisees, including employment, benefits and wage determination, prices charged for products and services, business hours, personnel management, and capital expenditure decisions. However, the franchise agreements afford certain rights to the Company, such as the right to approve locations, suppliers, and the sale of a franchise. Additionally, franchisees are required to conform to the Company's established operational policies and procedures relating to quality of service, training, salon design, and decor and trademark usage. The Company's field personnel make periodic visits to franchised salons to ensure they are operating in conformity with the standards for each franchising program. All the rights afforded to the Company with regard to franchised operations allow the Company to protect its brands, but do not allow the Company to control day-to-day franchise operations or make decisions that have a significant impact on the success of the franchised salons. The Company's franchise agreements do not give the Company any right, ability or potential to determine or otherwise influence any terms and/or conditions of employment of franchisees' employees (except for those, if any, that are specifically related to quality of service, training, salon design, decor and trademark usage), including, but not limited to, franchisees' employees' wages and benefits, hours of work, scheduling, leave programs, seniority rights, promotional or transfer opportunities, layoff/recall arrangements, grievance and dispute resolution procedures, and/or discipline and discharge.

Franchise Terms.    Pursuant to a franchise agreement with the Company, each franchisee pays an initial fee for each store and ongoing royalties to the Company. In addition, for most brands, the Company collects advertising funds from franchisees and administers the funds on behalf of the brands. Franchisees are responsible for the costs of leasehold improvements, furniture, fixtures, equipment, supplies, inventory, payroll costs and certain other items, including initial working capital. The majority of franchise agreements provide the Company a right of first refusal if the store is to be sold and the franchisee must obtain the Company's approval in all instances where there is a sale of a franchise location.

Additional information regarding each of the major franchised brands is listed below:

Supercuts franchise agreements have a perpetual term, subject to termination of the underlying lease agreement or termination of the franchise agreement by either the Company or the franchisee. All new franchisees enter into development agreements, which give them the right to enter into a defined number of franchise agreements. These franchise agreements are site specific. The development agreement provides limited territorial protection for the stores developed under those franchise agreements. Older franchisees have grandfathered expansion rights, which allow them to develop stores outside of development agreements and provide them with greater territorial protections in their markets. The Company has a comprehensive impact policy that resolves potential conflicts among Supercuts franchisees and/or the Company's Supercuts locations regarding proposed store sites.

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.

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. The majority of Magicuts franchise agreements have a term equal to the greater of five years or the current initial term of the lease agreement with an option to renew for two additional five-year periods. The current franchise agreement is site specific. Franchisees may enter into development agreements with the Company, which provide limited territorial protection.

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. 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.

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. We believe the ability to serve walk-in appointments and minimize guest wait times are essential elements in delivering an efficient guest experience. Our mobile applications and online check-in capabilities allow us to capitalize on our guests' desire for convenience by allowing for future check-ins with optional stylist selection, and offering predicted wait times for guests who wish to walk in. Our franchisees continue to focus on stylist staffing and retention, optimizing schedules, balancing variable labor hours with guest traffic, and managing guest wait times. Our franchise salons are located in high-traffic strip centers and Walmart Supercenters with guest parking and easy access to offer guests a variety of convenient ways to fulfill their beauty needs.

Stylists. Our Company depends on the stylists in our system to help deliver great guest experiences. We believe in the importance of the ongoing development of stylists' craft. We aim to be an industry leader in stylist training, including the utilization of both live and digital training. We believe stylists deliver a superior experience for guests when they are well-trained technically and through years of experience. We employ trainers who provide new hire training for stylists joining the Company and train franchisee trainers. We supplement internal training with targeted vendor training and external trainers that bring specialized expertise to stylists in our system. We utilize training materials to help all levels of field employees navigate the operation of a salon and essential elements of guest service training within the context of brand positions.

Affordability. The Company strives to offer an exceptional value for its services. In the value category, our guests expect outstanding service at competitive prices. 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. The top selling brands within the Company’s retail assortment include: L'Oreal Professional Brands and John Paul Mitchell. Stylists are compensated and regularly trained to sell hair care and beauty products to their guests. Additionally, guests are encouraged to purchase products after stylists demonstrate their efficacy by using them in the styling of our guests' hair.

Marketing. Our marketing is brand specific and funded primarily from contractual contributions, based on sales, to the brand's cooperative advertising funds. These funds are used largely in support of advertising and other efforts to increase guest traffic to our salons, grow online booking usage, and improve overall awareness of and affinity for our brands. A portion of our marketing funds are used in support of stylist recruitment and training to grow the number of active stylists in our system.

Technology. In fiscal year 2022, we sold our proprietary back-office salon management system, Opensalon® Pro to a third party, Soham Inc. (Zenoti). 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. 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. Salon Support is primarily located in Minneapolis, Minnesota while allowing for hybrid and remote work.

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.    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.    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 1,232 franchised and 8 company-owned SmartStyle and Cost Cutters salons located in Walmart Supercenter locations throughout North America.

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, Cool Cuts for Kids, Style America, Famous Hair, Magicuts, Holiday Hair, and TGF, 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. 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. 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.

The tables below set forth the number of system-wide locations (franchised and company-owned) and activity within the various salon concepts.

						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.

(2)During fiscal years 2024, 2023, and 2022, the Company sold 10, 1, and 110 salon locations, respectively, to franchisees.

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. 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. 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.

The Company holds numerous trademarks, both in the United States and in many foreign countries. The most recognized trademarks are "SmartStyle®," "Supercuts®," "Regis Salons®," "Cost Cutters®," "First Choice Haircutters®," "Roosters®" and "Magicuts®."

We are committed to our purpose of Unleashing the Beauty of Potential, which is supported by our four core values:

Foster Trust.    Create powerful relationships by acting with empathy and integrity.

Create Community.    Connect and collaborate with all your partners. Share the challenges as much as you celebrate the wins.

Be Brave.    Dream big and courageously challenge the status quo.

Own It.    You are empowered. Take responsibility and own your role and your results.

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.

As of June 30, 2024, the Company employed 275 employees. The Company offers flexible work arrangements such as hybrid and remote work.

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. Additionally, 68% of the Company's leadership positions are held by women.

Over one hundred years ago, the Company began as a family business and its support of families continues today. It offers up to 16 weeks of parental leave, including adoption, up to 12 of which are paid, so that parents have time to focus on their newest family members. It also offers flexible work arrangements, including full-time telecommuting. Additionally, the Company offers flexible paid time off, which allows employees to control their time away from work based on individual needs, not years of service.

The Company also takes care of its people by offering competitive compensation and benefits packages that are designed to support the total well-being and promote the full potential of our employees and their families. These include short- and long-term incentive packages, an employee stock purchase plan, retirement plans, health, dental, and vision benefits, basic life insurance, long-term disability coverage, and wellness and employee assistance programs. The Company analyzes market trends and monitors its own compensation practices to attract, retain, and promote employees and reduce turnover and associated costs. 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.

We continued our investment in learning and development by adding more content to the Learning Hub and the Beauty of Series. In fiscal year 2024, we included content on diversity, equity, and inclusion to further this commitment, raise awareness, and enhance engagement through inclusivity.

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. The Company also specifically condemns human trafficking and abuse of child labor.

The Company is subject to various federal, state, local and provincial laws affecting its business, as well as a variety of regulatory provisions relating to the conduct of its beauty-related business, including health and safety. 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. We monitor state and local regulations carefully to ensure the safety of our stylists and guests.

In the United States, the Company's franchise operations are subject to the Federal Trade Commission's Trade Regulation Rule on Franchising (the FTC Rule) and to state laws and administrative regulations that regulate various aspects of franchise operations and sales. The Company's franchises are offered to franchisees by means of a disclosure document containing specified disclosures in accordance with the FTC Rule and the laws and regulations of certain states. The Company has registered its offering of franchises with the regulatory authorities of those states in which it offers franchises and where registration is required. State laws that regulate the franchisee/franchisor relationship presently exist in a substantial number of states and, in certain cases, apply substantive standards to this relationship. Such laws may, for example, require that the franchisor deal with the franchisee in good faith, prohibit interference with the right of free association among franchisees, and limit termination of franchisees without payment of reasonable compensation. The Company believes that the current trend is for government regulation of franchising to increase over time. However, such laws have not had, and the Company does not expect such laws to have, a significant effect on the Company's operations.

In Canada, the Company's franchise operations are subject to franchise laws and regulations in the provinces of Ontario, Alberta, Manitoba, New Brunswick, Prince Edward Island and British Columbia. The offering of franchises in Canada occurs by way of a disclosure document, which contains certain disclosures required by the applicable provincial laws. The provincial franchise laws and regulations primarily focus on disclosure requirements, although each requires certain relationship requirements, such as a duty of fair dealing and the right of franchisees to associate and organize with other franchisees.

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. 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. 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.

Financial information about foreign and North American operations is incorporated herein by reference to Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 and segment information in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

The Company is subject to the informational requirements of the Securities and Exchange Act of 1934, as amended (Exchange Act). The Company therefore files periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). All our reports, proxy and information statements and other information are available on the SEC's internet site (www.sec.gov).

Financial and other information can be accessed in the Investor Relations section of the Company's website at www.regiscorp.com. 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.

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. Previously, he served as Executive Vice President and Chief Technology Officer from October 2021 to July 2022. Prior to joining the Company, Mr. 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.

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. DeVore served as a consultant at StudioMDV, LLC, an advertising services company, from March 2019 to August 2022, as Vice President E-commerce Marketing at Aerus, LLC, an air and surface purification manufacturer, from October 2017 to March 2019, and she directed digital transformation and growth in a variety of roles and as a consultant focused on brand strategy, digital innovation and e-commerce.

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. 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.

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. 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. 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.

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. 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. 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. 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. 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.

Kersten Zupfer was appointed to Executive Vice President and Chief Financial Officer in November 2019. 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. 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.

Our salons are partly dependent on the volume of customer foot traffic around their locations to generate both service and product revenues. Because many of our salons are located in shopping centers, customer foot traffic may be adversely affected by changing consumer shopping trends that favor internet-based shopping or alternative shopping methods or locations.

In addition, we are experiencing a proliferation of alternative channels of distribution, such as blow dry bars, booth rental facilities, discount brick-and-mortar and online professional product retailers, as well as manufacturers selling directly to consumers online, all of which may negatively affect our product and service revenue. 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.

In our U.S. markets, numerous laws and regulations at the federal, state, and local levels can affect our business. Legal requirements are frequently changed and subject to interpretations, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. 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.

A number of U.S. states, Canadian provinces, and municipalities in which we do business have recently increased, or are considering increasing, the minimum wage, with increases generally phased over several years depending upon the size of the employer. Increases in minimum wages, employment taxes and overtime pay result in an increase in salon operating costs, and the salons' ability to offset these increases through price increases may be limited. In fact, increases in minimum wages have increased salon operating costs over the last five years. In addition, a growing number of states, provinces and municipalities have passed, or are considering passing, requirements for paid sick leave, family leave, predictive scheduling (which imposes penalties for changing an employee's shift as it nears), and other requirements that increase the administrative complexity and cost of managing a workforce. Increases in costs for our franchisees could lead to reduced profitability of salons, which may lead to salon closures. Finally, changes in labor laws designed to facilitate union organizing, could increase the likelihood of stylists being subjected to greater organized labor influence. If a significant portion of stylists were to become unionized, it would have an adverse effect on salon operations which adversely impacts our business and financial results.

If the National Labor Relations Board (NLRB) were to decide to treat our franchisees as "joint employers" with us or if our franchisees are classified as large employers under minimum wage statutes because of their affiliations with us, this could have an adverse impact on our business. In addition, we and our franchisees must comply with state employment laws, including the California Labor Code, which has stringent requirements and penalties for non-compliance.

Various state and federal laws govern our relationships with our franchisees and our potential sale of a franchise. If we fail to comply with these laws, we may subject the Company and our personnel to claims lodged by our franchisees, as well as federal and state government agencies, and those claims may include, among others, fraud, misrepresentation, unfair business practices and wrongful terminations. As a result of those claims, we could be liable for fines, damages, stop orders or other penalties. A franchisee or government agency may bring legal action against us based on the franchisee/franchisor relationship. Also, under the franchise business model, we may face claims and liabilities based on vicarious liability, joint-employer liability or other theories or liabilities. All such legal actions could not only result in changes to laws and interpretations, which could make it more difficult to appropriately support our franchisees and, consequently, impact our performance, but could also result in expensive litigation with our franchisees, third parties or government agencies, which could adversely affect both our profits and our important relationships with our franchisees. In addition, other regulatory or legal developments may result in changes to laws or to the franchisee/franchisor relationship that could negatively impact the franchise business model and, accordingly, our profits.

We are also subject to federal statutes and regulations, including the rules promulgated by the U.S. Federal Trade Commission, as well as certain state laws governing the offer and sale of franchises. Many state franchise laws impose substantive requirements on franchise agreements, including limitations on non-competition provisions and on provisions concerning the termination or non-renewal of a franchise. Some states require that certain materials be filed for a franchisor to be registered and approved before franchises can be offered or sold in that state. The failure to obtain or retain licenses or approvals to sell franchises could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition to employment and franchise laws, we are also subject to a wide range of federal, state, provincial, and local laws and regulations in the jurisdictions in which we operate, including those affecting public companies, product manufacturing and sale and those governing the franchisee/franchisor relationship. Compliance with new, complex, and changing laws may cause our expenses to increase. 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.

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. In particular, visitation patterns to our salons can be adversely impacted by increases in unemployment rates and decreases in discretionary income levels.

Our success depends, in part, on our ability to anticipate, gauge and react in a timely manner to changes in consumer tastes, hair product innovation, fashion trends and consumer spending patterns. If we do not timely identify and properly respond to evolving trends and changing consumer demands for hair care or services, salon sales may decline. 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.

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. 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. 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. 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.

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. This may also cause the market price of our common stock to further decline.

Our success is substantially dependent on franchise royalties and the overall success of our franchisees' salons. Many franchisees have seen a decline in revenues in recent years which reduces their profitability. As a result, franchise salon closures have increased, which reduces our royalty income. In addition, franchisees may be unable to pay their royalties which could decrease cash collections. Some franchisees have stopped paying rents as they come due, reduced operating hours, or closed before the lease end date, which are violations of the lease agreements and may result in penalties depending on the lease, which may increase our cash outflows when the franchisee subleases from us, or we guarantee the lease. Franchisees who decide to close their salons when there is not another franchisee willing to take over their business decreases the size of our fleet and our royalty revenues.

To support and enhance our franchisees' businesses, we may need to invest in certain unanticipated new capabilities and/or services, and we will need to determine the appropriate amount of investment to optimize the success of our franchisees, while ensuring that the level of investment supports our expected return on those investments. 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 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.

In fiscal year 2023, we entered into a preferred supplier agreement with a supplier. 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. 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.

Guest loyalty is strongly dependent upon the stylists who serve our guests and the customer experience in our salons. Qualified, trained stylists are key to a memorable guest experience that creates loyal customers. In order to profitably grow our business, it is important for our salons to attract, train and retain talented stylists and salon leaders and to adequately staff our salons. 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. In 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. 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. If the cosmetology school industry sustains further declines in enrollment or some schools close entirely, or if stylists leave the beauty industry, we expect that we and our franchisees would have increased difficulty staffing our salons in some markets. We are making significant investments in programs to attract and retain stylists. 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.

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.

We have limited control over how our franchisees' businesses are operated. Though we have established operational standards and guidelines, franchisees own, operate, and oversee the daily operations of their salon, including employee-related matters and pricing. If franchisees do not successfully operate their salons in compliance with our standards, our brand reputation and image could be harmed, and our financial results could be affected. Additionally, if franchisees do not price their goods and services competitively, the franchisee may fail to maximize the financial performance of their salon. We could experience greater risks as the scale of our franchised salons increases.

In addition, our franchisees are subject to the same general economic risks as our Company, and their results are influenced by competition for both guests and stylists, market trends, price competition and disruptions in their markets and business operations due to public health issues, including pandemics, severe weather, and other external events. Like us, they rely on external vendors for some critical functions and to protect their company data. They may also be limited in their ability to open new locations by an inability to secure adequate financing, especially because many of them are small businesses with much more limited access to financing than our Company or by the limited supply of favorable real estate for new salon locations. They may also experience financial distress because of over-leveraging, which could negatively affect our operating results due to delayed or non-payments to us. The bankruptcy, default, abandonment, or breach by or of a franchisee could also expose us to lease liability due to our lease guarantees or subleases as explained previously.

A deterioration in the financial results of our franchisees, a failure of our franchisees to renew their franchise agreements or closure of locations adversely affects our operating results through decreased royalty payments and fees. We also must continue to attract qualified franchisees and work with them to make their businesses successful.

In addition, challenges in supporting our franchise system could cause our operating results to suffer. If we are unable to effectively select and train new franchisees and support our growing franchisee base, it could affect our brand standards, cause disputes between us and our franchisees, and potentially lead to material liabilities.

Our business is dependent on franchisees continuing to operate. When a franchisee exits the franchise system, and we are unable to recruit an existing or new franchisee to run that salon location, our salon count and revenues decline. A decline in salon count could also reduce the value of our brands. Additionally, we are dependent on our franchisees to grow their business in order for our business to grow. However, franchisees may not have access to capital, labor, etc., to support their growth.

The normal operations of our business and our investments in technology involve processing, transmitting and storing potentially sensitive personal information about our guests, employees, franchisees, vendors and our Company, all of which require the appropriate and secure utilization of such information and subjects us to increased focus regarding our data security compliance. Cyber-attacks, including ransomware, designed to gain access to sensitive information by breaching mission critical systems of large organizations (and their third-party vendors) are constantly evolving and high-profile electronic security breaches leading to unauthorized release of sensitive information have occurred at a number of large U.S. companies in recent years. Furthermore, there has been heightened legislative and regulatory focus on data security in the U.S. and abroad, including requirements for varying levels of customer notification in the event of a data breach. These laws are changing rapidly and vary among jurisdictions. We will continue our efforts to meet any applicable privacy and data security obligations; however, it is possible that certain new obligations may be difficult to meet and could increase our costs. We rely on commercially available systems, software, and tools to provide security for processing, transmitting, and storing of sensitive information. As the risk of cyber-attacks increases, our related insurance premiums may also increase. Despite the security measures and processes we have in place, our efforts (and those of our third-party vendors) to protect sensitive guest, employee, franchisee, vendor, and Company information may not be successful in preventing a breach in our systems or detecting and responding to a breach on a timely basis. We have, from time to time, experienced threats to, and incidents involving, our systems and information, none of which have been material to date. As a result of a security incident or breach in our systems, our systems could be interrupted or damaged, and/or sensitive information could be accessed by third parties. If that occurred, our guests could lose confidence in our ability to protect their information, which could cause them to stop visiting our salons altogether or our franchisees could exit the system due to lack of confidence. Such events could also lead to lost future sales and adversely affect our results of operations. In addition, as the regulatory environment relating to retailers and other companies' obligations to protect sensitive data becomes stricter, a material failure on our part to comply with applicable regulations could potentially subject us to fines, penalties, other regulatory sanctions, or lawsuits with the possibility of substantial damages. The costs to remediate security incidents or breaches that may occur could be material. Also, as cyber-attacks become more frequent, intense, and sophisticated, the costs of proactive defensive measures may increase. Furthermore, while our franchisees are independently responsible for data security at their franchised salon locations, a security incident or breach at a franchised salon location could negatively affect public perception of our brands. More broadly, our incident response preparedness and disaster recovery planning efforts may be inadequate or ill-suited for a security incident and we could suffer disruption of operations or adverse effects to our operating results.

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. 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. Furthermore, Walmart has the right to (a) close up to 100 salons per year for any reason, upon payment of certain buyout fees; (b) terminate lease agreements for breach, such as if we failed to conform with required operating hours, subject to a notice and cure period; (c) non-renew the lease agreements if salons fail to reach certain sales thresholds; (d) impose penalties for failing to meet required operation hours; and (e) terminate the lease if the Walmart store is closed. Future franchising activity is dependent upon a continued relationship between us and Walmart, as well as Walmart's approval of our proposed franchisee on a location-by-location basis. Further, Walmart may attempt to impose changes to the terms and conditions of our agreements, which may be contrary to our economic interests. 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. 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.

Our future growth and profitability may depend on the effectiveness, efficiency and spending levels of our marketing and advertising efforts to drive awareness and traffic to our salons. In addition, delivering a quality guest experience is crucial to drive repeat visits to our salons. We are focusing on improving guest experiences to provide brand differentiation and preference as well as ensure our guests' needs are met. If our marketing, advertising, and improved guest experience efforts do not generate sufficient customer traffic and repeat visits to our salons, our business, financial condition, and results of operations may be adversely affected. 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, in large part, on our ability to maintain and enhance the value of our brands, our customers' connection to our brands and a positive relationship with our franchisees. 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. Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity, including via social media or if they result in litigation. Some of these incidents may relate to the way we manage our relationships with our franchisees, our growth strategies, our development efforts, or the ordinary course of our or our franchisees' business. Other incidents may arise from events that may be beyond our control and may damage our brands, such as actions taken (or not taken) by one or more franchisees or their employees relating to health, safety, welfare, social issues or otherwise, litigation and claims, security breaches or other fraudulent activities associated with our back-office management or payment systems, and illegal activity targeted at us or others. Consumer demand for our products and services and our brands' value could diminish significantly if any such incidents or other matters erode consumer confidence in us or our products or services. This could result in lower sales and, ultimately, lower royalty income, which could materially and adversely affect our business and operating results.

The efficient operation of our business is dependent on our management information systems. We rely heavily on our management information systems to collect daily sales information and guest demographics, monitor salon performance, generate payroll information, and other functions. Such systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, hacker attempts, security breaches and natural disasters. 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. The failure of our management information systems to perform as we anticipate, to meet the continuously evolving needs of our business, or to provide an affordable long-term solution, could disrupt our business operations and result in other negative consequences, including remediation costs, loss of revenue and reputational damage. Further, if our external vendors fail to adequately provide technical support for any one of our key existing management information systems or if new or updated components are not integrated smoothly, we could experience service disruptions that could result in the loss of important data, increase our expenses, decrease our revenues and generally harm our business, reputation and brands. Any such conduct with respect to our franchisees could also result in litigation.

We, along with our franchisees, rely on external vendors for the manufacture, supply, and distribution of retail products we sell, and products we use during salon services, such as color and chemical treatments. We also rely on external vendors for various services critical to our operations and the security of certain Company data. Our dependence upon vendors exposes us to operational, reputational, financial and compliance risk.

If salon product offerings do not meet guests' expectations regarding safety and quality, we could experience lost sales, increased costs, and exposure to legal and reputational risk. All our vendors must comply with applicable product safety laws, and we are dependent on them to ensure that the products and packages we buy, for either use on a guest during a service or resale to the public, comply with all safety and quality standards. Events that give rise to actual, potential, or perceived product safety concerns or mislabeling could expose us to government enforcement action and/or private litigation and result in costly product recalls and other liabilities.

Our vendors are also responsible for the security of certain Company data, as discussed above. 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.

Our reputation is critical to our ability to compete and succeed. However, our reputation may be damaged by negative publicity on social media or other channels regarding the quality of products or services we provide. There has been a substantial increase in the use of social media platforms, which allow individuals to be heard by a broad audience of consumers and other interested persons. Negative or false commentary regarding our brands or the products or services we offer may be posted on social media platforms at any time. Customers value readily available information and may act on information without further investigation or regard to its accuracy. The harm to our reputation may be immediate, without affording us an opportunity for redress or correction. Our reputation may also be damaged by factors that are mostly or entirely out of our control, including actions by a franchisee or a franchisee's employee.

We also use social media platforms as marketing tools. As laws and regulations rapidly evolve to govern the use of these platforms, the failure by us, our employees, franchisees or third parties acting at our direction, to abide by applicable laws and regulations in the use of these platforms could adversely affect our business, financial condition, and revenues.

We maintain an enterprise risk management program that is designed to identify, assess, mitigate, and monitor the risks that we face. There can be no assurance that our frameworks or models for assessing and managing known risks, compliance with applicable laws and related controls will effectively mitigate risk and limit losses in all market environments or against all types of risk in our business. If conditions or circumstances arise that expose flaws or gaps in our risk management or compliance programs, the performance and value of our business could be adversely affected.

Insurance and other traditional risk-shifting tools may be held by, or made available to, us in order to manage certain types of risks, but they are subject to terms such as deductibles, retentions, limits and policy exclusions, as well as risk of denial of coverage, default or insolvency. If we suffer unexpected or uncovered losses, or if any of our insurance policies or programs are terminated for any reason or are not effective in mitigating our risks, we may incur losses that are not covered or that exceed our coverage limits and could adversely impact our results of operations, cash flows and financial position.

Our franchise agreements require each franchisee to maintain specified insurance coverages and levels. Certain extraordinary hazards, however, may not be covered, and insurance may not be available (or may be available only at prohibitively expensive rates) with respect to many other risks. 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.

Our ability to make interest payments and comply with debt covenants associated with our indebtedness depends on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. Specifically, our interest payments are based on the secured overnight financing rate (SOFR), such that an increase in the SOFR will have a negative impact on our cash flows.

If we fail to comply with the terms in our existing financing arrangements, such a failure may cause a default under our financing arrangement, which could limit our ability to obtain new replacement financing or additional financing under our existing credit facility, require us to pay higher levels of interest or accelerate our obligation to repay our indebtedness. 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.

Our franchise agreements may be subject to premature termination in certain circumstances, such as failure of a franchisee to cure a default, monetary or otherwise, a franchisee bankruptcy, voluntary termination, or abandonment of the franchise. If terminations occur for these or other reasons, we may need to enforce our right to damages for breach of contract and related claims, which could cause us to incur significant legal fees and expenses and/or to take back and operate such salons as company-owned salons. Any damages we ultimately collect could be less than the projected future value of the fees and other amounts we would have otherwise collected under the franchise agreement. In addition, with many of our brands, we remain liable under the lease and, therefore, will be obligated to pay rent or enter a settlement with the landlord, and we may not be made whole by the franchisee. A significant loss of franchisee agreements due to premature terminations could hurt our financial performance or our ability to grow our business.

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.

Competition on a market-by-market basis remains challenging as many smaller chain competitors are franchise systems with local operating strength in certain markets and the hair salon industry, as a whole, is fragmented and highly competitive for customers, stylists and prime locations. Therefore, our ability to attract guests, raise prices and secure suitable locations in certain markets can be adversely impacted by this competition. Our strategies for competing are complicated by the fact that we have multiple brands in multiple segments, which compete on different factors. We also face significant competition for prime real estate, particularly in strip malls. We compete for lease locations not only with other hair salons, but with a wide variety of businesses looking for similar square footage and high-quality locations. If we are unable to successfully compete, we may lose market share and our ability to grow same-store sales and increase our revenue and earnings may be impaired.

We depend on the skills, working relationships and continued services of key personnel, including our management team and others throughout our Company. We are also dependent on our ability to attract and retain qualified personnel, for whom we compete with other companies both inside and outside our industry. We may be required to increase wages and/or benefits to attract and retain qualified personnel or risk considerable turnover. Our business, financial condition or results of operations may be adversely impacted by the unexpected loss of any of our management team or other key personnel, or more generally if we fail to identify, recruit, train and/or retain talented personnel. In addition, our business may be harmed if we lose too many individuals with institutional knowledge. 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. 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.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and effectively prevent and detect material fraud. If we cannot provide reliable financial reports or prevent or detect material fraud, our operating results could be materially misstated. There can be no assurances that we will be able to prevent control deficiencies from occurring, which could cause us to incur unforeseen costs, reduce investor confidence, cause the market price of our common stock to decline or have other potential adverse consequences. Commencing with our fiscal 2023 audit, and as a result of our smaller reporting company status, we are not required to obtain, nor did we obtain, an audit of our system of internal controls over financial reporting.

We are subject to income taxes in the U.S. and other foreign jurisdictions. Significant judgment is required in determining our tax provision for income taxes. 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. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for income taxes and payroll tax accruals. There can be no assurances as to the outcome of these examinations. 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. 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.

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.

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. Generally, an "ownership change” occurs if the percentage of the Company’s stock owned by one or more "five percent stockholders” increases by more than fifty percentage points over the lowest percentage of stock owned by such stockholders at any time during the prior three-year period or, if sooner, since the last "ownership change” experienced by the Company. In the event of such an "ownership change,” Section 382 imposes an annual limitation on the amount of post-change taxable income a corporation may offset with pre-change Tax Assets. Similar rules apply in various U.S. state and local jurisdictions. 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 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. 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. 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. The Plan is intended to make it more difficult for the Company to undergo an ownership change by deterring any person from acquiring 4.95% or more of the outstanding shares of stock without the approval of the Board of Directors. However, there can be no assurance that the Plan will prevent an "ownership change” from occurring for purposes of Section 382, and events outside of our control and which may not be subject to the Plan, such as sales of our stock by certain existing shareholders, may result in such an "ownership change” in the future. 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.

Although the Plan is not principally intended to prevent a takeover, it may have an anti-takeover effect because an “acquiring person” thereunder may be diluted upon the occurrence of a triggering event. Accordingly, the Plan may complicate or discourage a merger, tender offer, accumulations of substantial blocks of our stock, or assumption of control by a substantial holder of our securities. The Plan, however, should not interfere with any merger or other business combination approved by the Board of Directors. Because the Board of Directors may consent to certain transactions, the Plan gives our Board of Directors significant discretion to act in the best interests of shareholders.

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. Litigation to defend ourselves against claims by third parties, or to enforce any rights that we may have against third parties, may be necessary, which could require significant time commitments from our management team and result in substantial costs and diversion of our resources, which may cause an adverse effect on our business, financial condition and revenues. We establish accruals for potential liabilities arising from litigation and other legal or regulatory proceedings or claims when potential liabilities are probable, and the amount of the loss can be reasonably estimated based on currently available information. We may still incur legal costs for a matter even if we have not accrued a liability. In addition, actual losses may be higher than the amount accrued for a certain matter or in the aggregate. Any resolution of litigation or other legal or regulatory proceedings as well as claims could adversely affect our business, financial condition, or revenues.

None.

We have defined policies and procedures for cybersecurity incident detection, containment, response, and remediation and have adopted physical, technological, and administrative cybersecurity and data privacy controls. The 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. Critical systems are periodically audited against industry standards.

Key elements of our cybersecurity risk management program include, but are not limited to, the following:

•Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

•A security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

•The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;

•Cybersecurity awareness training of our employees;

•A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and

•A third-party risk management process for service providers based on our assessment of their criticality to our operations and respective risk profile.

Our CDO directs, coordinates, plans, and organizes information security activities throughout the Company, including leading the development of our cybersecurity risk management strategy.

We have not historically been materially impacted by risks from cybersecurity threats and as of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business.

The Company leases its corporate headquarters in Minneapolis, Minnesota, and the lease expires in 2030. We lease four floors at our corporate headquarters. We currently sublease three of the four floors through sublease arrangements which expire in 2030.

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.

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. Remaining franchisees who do not enter into sublease arrangements with the Company negotiate and enter into leases on their own behalf. As leases renew, the Company intends for franchisees to sign the non-Walmart leases directly so it will no longer be the primary tenant.

The 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.

None of the Company's salon leases are individually material to the operations of the Company, and the Company expects that it will be able to renew its leases on satisfactory terms as they expire or identify and secure other suitable locations. See Note 6 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has been faced with allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company faces allegations of non-payment of rent and associated charges. Further, similar to other large retail employers, the Company has been faced with allegations of purported class-wide consumer and wage and hour violations. Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period. See Note 9 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The Company's common stock is listed and traded on the Nasdaq Global Market under the symbol "RGS."

As of August 23, 2024, the Company had approximately 266 shareholders of record. The closing stock price was $23.06 per share on August 23, 2024.

In accordance with its capital allocation policy, the Company does not pay cash dividends.

The Company issued the following common stock through its share issuance program:

In May 2000, the Company's Board of Directors (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. 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 Company does not anticipate repurchasing shares of common stock for the foreseeable future.

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results.

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. 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. 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. (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. 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. As a result of the sale, the Company classified the OSP business as discontinued operations in the financial statements as discussed in Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The Company shifted its product business from a wholesale model to a third-party distribution model as part of its asset-light transformation. In fiscal year 2022, the Company exited its distribution centers and ceased selling products to franchisees. Franchisees source product from a third-party distribution partner and the Company receives a royalty payment based on franchisee purchases. This change has significantly decreased both the Company's franchise product revenue and general and administrative expense, including the franchise distribution costs discussed in Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. 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.

(2)Due to the reduction in company-owned salons, the Company cannot redistribute inventory from closed salons causing an increase to the reserve.

The Company reports its operations in two operating segments: franchise salons and company-owned salons.

The global coronavirus pandemic (COVID-19) had an adverse impact on operations. 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. 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.

Our results are impacted by our system-wide sales, which include sales by all points of distribution, whether owned by our franchisees or the Company. While we do not record sales by franchisees as revenue, and such sales are not included in our Consolidated Financial Statements, we believe that this operating measure is important in obtaining an understanding of our financial performance. We believe system-wide sales information aids in understanding how we derive royalty revenue and in evaluating performance. In fiscal year 2024, a net 404 franchise salons have closed, which reduces future royalty income.

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. System-wide same-store sales are the sum of the system-wide same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. System-wide same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.

The following table sets forth, for the periods indicated, certain information derived from our Consolidated Statements of Operations. The percentages are computed as a percent of total consolidated revenues, except as otherwise indicated, and the increase (decrease) is measured in basis points. Variances calculated on amounts shown in millions may result in rounding differences.

						Fiscal 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.

(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.

(3)Computed as a percent of income (loss) from continuing operations before income taxes. 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.

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. This was partially offset by increased prices within our same store sales.

During fiscal year 2024, fees decreased $1.1 million, or 9.7%, primarily due to a decrease in terminated development agreements year over year.

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.

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.

During fiscal year 2024, franchise rental income decreased $16.1 million, or 14.5%, primarily due to the decrease in franchise salon count.

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.

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.

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.

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.

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.

During fiscal year 2024, franchise rent expense decreased $16.1 million, or 14.5%, primarily due to the decrease in franchise salon count.

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.

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.

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.

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.

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.

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. See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The Company recorded income from discontinued operations of $2.0 million and $4.0 million in fiscal years 2024 and 2023, respectively. 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 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. See Note 3 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

Based on our internal management structure, we report two segments: franchise salons and company-owned salons. See Note 15 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. Significant results of continuing operations are discussed below with respect to each of these segments.

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.

(2)Franchise same-store sales are calculated as the total change in sales for franchise locations that were open on a specific day of the week during the current period and the corresponding prior period. Year-to-date franchise same-store sales are the sum of the franchise same-store sales computed on a daily basis. 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.

Franchise revenue decreased $27.5 million during fiscal year 2024. 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. During fiscal year 2024, franchisees purchased 10 salons from the Company and constructed (net of relocations) and closed 15 and 429 franchise salons, respectively.

During fiscal year 2024, franchise adjusted EBITDA totaled $26.3 million, an improvement of $3.5 million compared to fiscal year 2023. The improvement is primarily due to a decrease in general and administrative expense.

						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.

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.

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.

Recent accounting pronouncements are discussed in Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

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. 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.

Funds generated by operating activities, available cash and cash equivalents and our borrowing agreements are our most significant sources of liquidity. The Company believes it has sufficient liquidity, cash on hand, and borrowing capacity to meet its obligations in the next twelve months and until maturity of the credit agreement in June 2029.

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, 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.

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. The Company has a disciplined approach to capital allocation, which focuses on ensuring we can meet our interest obligations and investing in key priorities to support the Company's strategic plan as discussed within Part I, Item 1. Additional information about the Company's current use of cash is described under "Sources of Liquidity."

The Company's most significant contractual cash requirements as of June 30, 2024, were lease commitments and interest payments. See Notes 6 and 8 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K for further detail.

During fiscal year 2024, cash used in operating activities was $2.0 million. Cash used in operations improved due to lower general and administrative expense and less cash used for working capital. Cash used in fiscal year 2023 included a $2.5 million payment of previously deferred social security contributions.

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.

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.

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. 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.

(2)June 30, 2024 term loan and revolving credit facility matures on June 24, 2029.

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. 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. 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 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%. 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. See additional discussion in Note 8 to the Consolidated Financial Statements 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.

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.

Our debt obligations are primarily composed of our credit agreement at June 30, 2024.

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. See Note 4 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

Operating leases primarily represent long-term obligations for the rental of salons, including leases for company-owned locations, as well as salon franchisee lease obligations, which are reimbursed to the Company by franchisees. Regarding franchisee subleases, we generally retain the right to the related salon assets, net of any outstanding obligations, in the event of a default by a franchise owner. Declines in system-wide revenue in certain brands over the past few years have increased the risk of default by franchisees, which may be material.

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. We are not able to reasonably estimate the amount by which the liabilities will increase or decrease over time; however, at this time, we do not expect a significant payment related to these obligations within the next fiscal year. See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

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.

We are a party to a variety of contractual agreements that we may be obligated to indemnify the other party for certain matters, which indemnities may be secured by operation of law or otherwise, in the ordinary course of business. These contracts primarily relate to our commercial contracts, operating leases and other real estate contracts, financial agreements, agreements to provide services and agreements to indemnify officers, directors, and employees in the performance of their work. While our aggregate indemnification obligation could result in a material liability, we are not aware of any current matter that we expect will result in a material liability.

We do not have any unconditional purchase obligations or significant other commercial commitments such as standby repurchase obligations.

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. 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.

The Company has not declared a quarterly dividend payment since December 2013.

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. 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 Company does not anticipate repurchasing shares of common stock for the foreseeable future.

The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States. In preparing the Consolidated Financial Statements, we are required to make various judgments, estimates and assumptions that could have a significant impact on the results reported in the Consolidated Financial Statements. We base these estimates on historical experience and other assumptions believed to be reasonable under the circumstances. Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Changes in these estimates could have a material effect on our Consolidated Financial Statements.

Our significant accounting policies can be found in Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. We believe the following accounting policies are most critical to aid in fully understanding and evaluating our reported financial condition and results of operations.

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. 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.

In applying the goodwill impairment assessment, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less than its carrying value (Step 0). Qualitative factors may include, but are not limited to, economic, market and industry conditions, cost factors, and overall financial performance of the reporting unit. If after assessing these qualitative factors, the Company determines it is more likely than not that the carrying value is less than the fair value, then performing Step 1 of the goodwill impairment assessment is unnecessary.

The carrying value of each reporting unit is based on the assets and liabilities associated with the operations of the reporting unit, including allocation of shared or corporate balances among reporting units. Allocations are generally based on the number of salons in each reporting unit as a percent of total salons or expenses of the reporting unit as a percentage of total company expenses.

The Company calculates estimated fair values of the reporting units based on discounted cash flows utilizing estimates in annual revenue, fixed expense rates, allocated corporate overhead, franchise and company-owned salon counts, and long-term growth rates for determining terminal value. Where available and as appropriate, comparative market multiples are used in conjunction with the results of the discounted cash flows. The Company engages third-party valuation consultants to assist in evaluating the Company's estimated fair value calculations. See Note 1 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The Company follows the guidance in ASC 360, Property, Plant, and Equipment and applies the guidance to property, plant, and equipment as well as right of use (ROU) assets. 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. As a result, management assessed underperforming salon asset groups, which included the related ROU assets, for impairment in accordance with ASC 360.

The second step of the long-lived asset impairment test requires that the fair value of the asset group be estimated when determining the amount of any impairment loss. For the salon asset groups that failed the recoverability test, an impairment loss was measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company applied the fair value guidance within ASC 820-10 to determine the fair value of the asset group from the perspective of a market-participant considering, among other things, appropriate discount rates, multiple valuation techniques, the most advantageous market, and assumptions about the highest and best use of the asset group. To determine the fair value of the salon asset groups, the Company utilized market-participant assumptions rather than the Company's own assumptions about how it intends to use the asset group. The significant judgments and assumptions utilized to determine the fair value of the salon asset groups include the market rent of comparable properties and a discount rate. 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.

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. The impairment loss for each salon asset group that was recognized was allocated among the long-lived assets of the group on a pro-rata basis using their relative carrying amounts. Additionally, the impairment losses did not reduce the carrying amount of an individual asset below its fair value, including the ROU assets included in the salon asset groups. Assessing the long-lived assets for impairment requires management to make assumptions and to apply judgment which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses to calculate impairment losses for its long-lived assets, including its ROU assets. If actual results are not consistent with the estimates and assumptions used in the calculations, the Company may be exposed to future impairment losses that could be material.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. The Company evaluates all evidence, including recent financial performance, the existence of cumulative year losses and our forecast of future taxable income, to assess the need for a valuation allowance against our deferred tax assets. 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. The decline in fiscal year 2024 is primarily due to utilization of its U.S. net operating loss and a reduction to the corresponding valuation allowance. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make necessary adjustments to the deferred tax asset valuation, which would reduce the provision for income taxes.

The Company reserves for unrecognized tax benefits, interest, and penalties related to anticipated tax audit positions in the U.S. and other tax jurisdictions based on an estimate of whether additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of these liabilities would result in tax benefits being recognized in the period in which it is determined that the liabilities are no longer necessary. If the estimate of unrecognized tax benefits, interest, and penalties proves to be less than the ultimate assessment, additional expenses would result.

See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K.

The primary market risk exposure of the Company relates to changes in interest rates in connection with its credit agreement, which bears interest at variable rates based on SOFR plus an applicable borrowing margin. Additionally, the Company is exposed to foreign currency translation risk related to changes in the Canadian dollar, and to a lesser extent, the British pound. The Company has established policies and procedures that govern the management of these exposures through the use of derivative financial instrument contracts. By policy, the Company does not enter into such contracts for the purpose of speculation. The following details the Company's policies and use of financial instruments.

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. 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%.

Over 90% of the Company's operations are transacted in U.S. dollars. However, because a portion of the Company's operations consist of activities outside of the U.S., the Company has transactions in other currencies, primarily the Canadian dollar, and to a lesser extent, the British pound. In preparing the Consolidated Financial Statements, the Company is required to translate the financial statements of its foreign subsidiaries from the currency in which they keep their accounting records, generally the local currency, into U.S. dollars. Different exchange rates from period to period impact the amounts of reported income and the amount of foreign currency translation recorded in accumulated other comprehensive income (AOCI). As part of its risk management strategy, the Company frequently evaluates its foreign currency exchange risk by monitoring market data and external factors that may influence exchange rate fluctuations. 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.

During 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.

Board of Directors and Shareholders

Regis Corporation

We have audited the accompanying consolidated balance sheets of Regis Corporation (a Minnesota corporation) and subsidiaries (the “Company”) as of June 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity (deficit), and cash flows for each of the three years in the period ended June 30, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023 and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2020.

Minneapolis, Minnesota

August 28, 2024

______________________________________________________________________________

_____________________________________________________________________________

(1)Includes cost of service and product sold to guests in our company-owned salons. Excludes general and administrative expense, rent and depreciation and amortization related to company-owned salons.

(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.

_______________________________________________________________________________