XML 26 R17.htm IDEA: XBRL DOCUMENT
v3.22.1

SEGMENT INFORMATION | 9 Months Ended
--- | ---
Mar. 31, 2022
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION: Segment information is prepared on the same basis that the chief operating decision maker (CODM) reviews financial information for operational decision-making purposes. Beginning in fiscal year 2022, corporate costs are included within the Franchise segment to reflect how the CODM reviews the business. The Company re-assessed its CODM conclusion in the second quarter of fiscal year 2022 as part of the CEO transition. As of March 31, 2022, the Company concluded the Interim CEO was the chief operating decision maker. The Company's reportable operating segments consisted of the following salons:
|  | March 31, 2022 |  | June 30, 2021
FRANCHISE SALONS: |  |  |  |
SmartStyle/Cost Cutters in Walmart Stores |  | 1,667 |  |  | 1,666 |
Supercuts |  | 2,316 |  |  | 2,386 |
Portfolio Brands |  | 1,378 |  |  | 1,357 |
Total North American salons |  | 5,361 |  |  | 5,409 |
Total International salons (1) |  | 143 |  |  | 154 |
Total Franchise salons |  | 5,504 |  |  | 5,563 |
as a percent of total Franchise and Company-owned salons |  | 97.9 | % |  | 95.3 | %
COMPANY-OWNED SALONS: |  |  |  |
SmartStyle/Cost Cutters in Walmart Stores |  | 52 |  |  | 91 |
Supercuts |  | 19 |  |  | 35 |
Portfolio Brands |  | 46 |  |  | 150 |
Total Company-owned salons |  | 117 |  |  | 276 |
as a percent of total Franchise and Company-owned salons |  | 2.1 | % |  | 4.7 | %
OWNERSHIP INTEREST LOCATIONS: |  |  |  |
Equity ownership interest locations |  | 76 |  |  | 78 |
Grand Total, System-wide |  | 5,697 |  |  | 5,917 |
_______________________________________________________________________________ (1)Canadian and Puerto Rican salons are included in the North American salon totals. As of March 31, 2022, the Franchise operating segment is comprised primarily of Supercuts®, SmartStyle®, Cost Cutters®, First Choice Haircutters®, Magicuts®, and Roosters® concepts and the Company-owned operating segment is comprised primarily of SmartStyle®, Supercuts®, Cost Cutters®, and other regional trade names. Financial information concerning the Company's reportable operating segments is shown in the following tables:
|  | Three Months Ended March 31, 2022
|  | Franchise |  | Company-owned |  | Consolidated (1)
|  | (Dollars in thousands)
Revenues: |  |  |  |  |  |
Royalties |  | $ | 15,799 |  |  | $ | — |  |  | $ | 15,799 |
Fees |  | 3,364 |  |  | — |  |  | 3,364 |
Product sales to franchisees |  | 1,293 |  |  | — |  |  | 1,293 |
Advertising fund contributions |  | 8,078 |  |  | — |  |  | 8,078 |
Franchise rental income |  | 32,666 |  |  | — |  |  | 32,666 |
Company-owned salon revenue |  | — |  |  | 3,549 |  |  | 3,549 |
Total revenue |  | 61,200 |  |  | 3,549 |  |  | 64,749 |
Operating expenses: |  |  |  |  |  |
Cost of product sales to franchisees |  | 2,598 |  |  | — |  |  | 2,598 |
Inventory reserve (1) |  | — |  |  | — |  |  | 6,420 |
General and administrative |  | 14,934 |  |  | 635 |  |  | 15,569 |
Rent |  | 327 |  |  | 919 |  |  | 1,246 |
Advertising fund expense |  | 8,078 |  |  | — |  |  | 8,078 |
Franchise rent expense |  | 32,666 |  |  | — |  |  | 32,666 |
Company-owned salon expense |  | — |  |  | 5,292 |  |  | 5,292 |
Depreciation and amortization |  | 1,592 |  |  | 405 |  |  | 1,997 |
Long-lived asset impairment |  | 322 |  |  | 5 |  |  | 327 |
Goodwill impairment |  | 16,000 |  |  | — |  |  | 16,000 |
Total operating expenses |  | 76,517 |  |  | 7,256 |  |  | 90,193 |
Operating loss |  | $ | (15,317) |  |  | $ | (3,707) |  |  | $ | (25,444) |
_______________________________________________________________________________ (1)This charge, primarily related to reserving for personal protective equipment acquired as a result of the COVID-19 pandemic, relates to the wind down of our distribution centers and is reviewed separately from the segment results by the CODM. Consolidated results will not cross foot as the inventory reserve is not part of the Company's segments.
|  | Three Months Ended March 31, 2021
|  | Franchise |  | Company-owned |  | Consolidated
|  | (Dollars in thousands)
Revenues: |  |  |  |  |  |
Royalties |  | $ | 12,835 |  |  | $ | — |  |  | $ | 12,835 |
Fees |  | 5,120 |  |  | — |  |  | 5,120 |
Product sales to franchisees |  | 13,079 |  |  | — |  |  | 13,079 |
Advertising fund contributions |  | 5,580 |  |  | — |  |  | 5,580 |
Franchise rental income |  | 31,317 |  |  | — |  |  | 31,317 |
Company-owned salon revenue |  | — |  |  | 32,336 |  |  | 32,336 |
Total revenue |  | 67,931 |  |  | 32,336 |  |  | 100,267 |
Operating expenses: |  |  |  |  |  |
Cost of product sales to franchisees |  | 11,168 |  |  | — |  |  | 11,168 |
General and administrative |  | 23,057 |  |  | 1,525 |  |  | 24,582 |
Rent |  | 772 |  |  | 7,229 |  |  | 8,001 |
Advertising fund expense |  | 5,580 |  |  | — |  |  | 5,580 |
Franchise rent expense |  | 31,317 |  |  | — |  |  | 31,317 |
Company-owned salon expense |  | — |  |  | 33,707 |  |  | 33,707 |
Depreciation and amortization |  | 1,933 |  |  | 1,687 |  |  | 3,620 |
Long-lived asset impairment |  | 22 |  |  | 811 |  |  | 833 |
Total operating expenses |  | 73,849 |  |  | 44,959 |  |  | 118,808 |
Operating loss |  | $ | (5,918) |  |  | $ | (12,623) |  |  | $ | (18,541) |
|  | Nine Months Ended March 31, 2022
|  | Franchise |  | Company-owned |  | Consolidated (1)
|  | (Dollars in thousands)
Revenues: |  |  |  |  |  |
Royalties |  | $ | 48,526 |  |  | $ | — |  |  | $ | 48,526 |
Fees |  | 11,496 |  |  | — |  |  | 11,496 |
Product sales to franchisees |  | 11,729 |  |  | — |  |  | 11,729 |
Advertising fund contributions |  | 24,213 |  |  | — |  |  | 24,213 |
Franchise rental income |  | 100,200 |  |  | — |  |  | 100,200 |
Company-owned salon revenue |  | — |  |  | 16,597 |  |  | 16,597 |
Total revenue |  | 196,164 |  |  | 16,597 |  |  | 212,761 |
Operating expenses: |  |  |  |  |  |
Cost of product sales to franchisees |  | 14,129 |  |  | — |  |  | 14,129 |
Inventory reserve (1) |  | — |  |  | — |  |  | 6,420 |
General and administrative |  | 51,099 |  |  | 2,243 |  |  | 53,342 |
Rent |  | 3,359 |  |  | 2,778 |  |  | 6,137 |
Advertising fund expense |  | 24,213 |  |  | — |  |  | 24,213 |
Franchise rent expense |  | 100,200 |  |  | — |  |  | 100,200 |
Company-owned salon expense |  | — |  |  | 18,304 |  |  | 18,304 |
Depreciation and amortization |  | 4,718 |  |  | 1,128 |  |  | 5,846 |
Long-lived asset impairment |  | 450 |  |  | 92 |  |  | 542 |
Goodwill impairment |  | 16,000 |  |  | — |  |  | 16,000 |
Total operating expenses |  | 214,168 |  |  | 24,545 |  |  | 245,133 |
Operating loss |  | $ | (18,004) |  |  | $ | (7,948) |  |  | $ | (32,372) |
_______________________________________________________________________________ (1)This charge, primarily related to reserving for personal protective equipment acquired as a result of the COVID-19 pandemic, relates to the wind down of our distribution centers and is reviewed separately from the segment results by the CODM. Consolidated results will not cross foot as the inventory reserve is not part of the Company's segments.
|  | Nine Months Ended March 31, 2021
|  | Franchise |  | Company-owned |  | Consolidated
|  | (Dollars in thousands)
Revenues: |  |  |  |  |  |
Royalties |  | $ | 36,989 |  |  | $ | — |  |  | $ | 36,989 |
Fees |  | 9,600 |  |  | — |  |  | 9,600 |
Product sales to franchisees |  | 41,057 |  |  | — |  |  | 41,057 |
Advertising fund contributions |  | 14,804 |  |  | — |  |  | 14,804 |
Franchise rental income |  | 95,885 |  |  | — |  |  | 95,885 |
Company-owned salon revenue |  | — |  |  | 117,648 |  |  | 117,648 |
Total revenue |  | 198,335 |  |  | 117,648 |  |  | 315,983 |
Operating expenses: |  |  |  |  |  |
Cost of product sales to franchisees |  | 33,171 |  |  | — |  |  | 33,171 |
General and administrative |  | 70,483 |  |  | 6,936 |  |  | 77,419 |
Rent |  | 3,109 |  |  | 31,019 |  |  | 34,128 |
Advertising fund expense |  | 14,804 |  |  | — |  |  | 14,804 |
Franchise rent expense |  | 95,885 |  |  | — |  |  | 95,885 |
Company-owned salon expense |  | — |  |  | 110,261 |  |  | 110,261 |
Depreciation and amortization |  | 6,304 |  |  | 11,080 |  |  | 17,384 |
Long-lived asset impairment |  | 726 |  |  | 9,091 |  |  | 9,817 |
Total operating expenses |  | 224,482 |  |  | 168,387 |  |  | 392,869 |
Operating loss |  | $ | (26,147) |  |  | $ | (50,739) |  |  | $ | (76,886) |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration