Seeking Alpha
Editor's notes: Despite getting clipped after recent earnings, RGS's optimization strategy should aid a turnaround. As a leading player in a market less sensitive to the economy, the downside risks seem limited.

Regis Salons (RGS) has been a beaten down name over the last several years thanks to a bloated cost structure and weak same-store sales. The stock has been largely range-bound over the last couple of years oscillating between $16 and $19 per share. However, recently the shares broke through that range and also through the lower end of a longer range channel of $13.90 per share. The recent quarterly results sent the shares down another 10% to under $12 per share. Investors are now pricing in a perpetual decline in the operating results of the company. The transition is likely to take time and there are a confluence of variables that are coming together setting the stage for...

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