(RTTNews) - Beauty salons operator Regis Corp. (RGS: News ) Thursday reported a sharp decline in profit for the first quarter, hurt mainly certain non-operating items as well as a 4.5% decline in comps that reflected the negative impact of the weak economy on customer visitation patterns. On an adjusted basis, earnings per share topped analysts' estimates.

Net income for the quarter almost halved to $7.77 million or $0.14 per share from $14.49 million or $0.34 per share last year. Income from continuing operations plunged to $4.61 million or $0.09 per share from $16.09 million or $0.37 per share in the same quarter last year.

Latest quarter results included non-operational charges of $21.6 million related to the pre-payment of debt and the undertaking of a store closing initiative in the U.K. Additionally, a $3.2 million is reported within discontinued operations primarily related to additional tax benefit from the sale of the Trade Secret business.

According to Regis, non-operational items reduced reported earnings by $0.16 per share on a net overall basis. Excluding the items, operational earnings were $0.30 per share, down from $0.39 per share in the year-ago quarter.

On an average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share. Analysts' estimates typically exclude special items.

Quarterly revenues declined 1.3% to $605.55 million from $613.53 million in the year ago quarter. Seven analysts estimated revenues of $597.83 million. Consolidated total same-store sales declined 4.5%.
Commenting on the results, Paul Finkelstein, chairman and chief executive officer, said, "First quarter same-store sales were slightly ahead of plan but remained challenging due to overall macro level economic conditions which have impacted our customer visitation patterns. However, we are very pleased with our first quarter operating results due to our continued focus on expense control."

Service revenues for the quarter were $449.28 million, down from $469.04 million in the previous year. Product revenues declined to $126.19 million from $134.18 million a year ago. Revenues from royalties and fees edged down to $10.12 million from $10.31 million in the previous year.

Revenues from product sold to Premier Salons Beauty, Inc. were $19.96 million. Premier purchased Trade Secret, Inc. from Regis on February 16. The agreement included a provision that Regis will supply products to Premier at cost for a transition period of nearly six months following the date of the sale, with possible extension to not more than eleven months.

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