SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION:

Segment information is prepared on the same basis that the chief operating decision maker 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 chief operating decision maker reviews the business. The Company re-assessed its chief operating decision maker conclusion in the second quarter of fiscal year 2022 as part of the CEO transition. The Company concluded the Interim CEO was the chief operating decision maker.

The Company's reportable operating segments consisted of the following salons:

	December 31, 2021		June 30, 2021
FRANCHISE SALONS:
SmartStyle/Cost Cutters in Walmart Stores	1,676		1,666
Supercuts	2,345		2,386
Portfolio Brands	1,386		1,357
Total North American salons	5,407		5,409
Total International salons (1)	146		154
Total Franchise salons	5,553		5,563
as a percent of total Franchise and Company-owned salons	97.4	%	95.3	%
COMPANY-OWNED SALONS:
SmartStyle/Cost Cutters in Walmart Stores	63		91
Supercuts	22		35
Portfolio Brands	65		150
Total Company-owned salons	150		276
as a percent of total Franchise and Company-owned salons	2.6	%	4.7	%
OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations	76		78
Grand Total, System-wide	5,779		5,917

_______________________________________________________________________________

(1)Canadian and Puerto Rican salons are included in the North American salon totals.

As of December 31, 2021, 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 December 31, 2021
	Franchise		Company-owned		Consolidated
	(Dollars in thousands)
Revenues:
Royalties	$	16,125	$	—	$	16,125
Fees	4,867		—		4,867
Product sales to franchisees	2,428		—		2,428
Advertising fund contributions	8,021		—		8,021
Franchise rental income	33,772		—		33,772
Company-owned salon revenue	—		5,043		5,043
Total revenue	65,213		5,043		70,256
Operating expenses:
Cost of product sales to franchisees	3,419		—		3,419
General and administrative	14,922		1,062		15,984
Rent	1,355		1,733		3,088
Advertising fund expense	8,021		—		8,021
Franchise rent expense	33,772		—		33,772
Company-owned salon expense	—		5,067		5,067
Depreciation and amortization	1,503		477		1,980
Long-lived asset impairment	128		(76)		52
Total operating expenses	63,120		8,263		71,383
Operating income (loss)	$	2,093	$	(3,220)	$	(1,127)

	Three Months Ended December 31, 2020
	Franchise		Company-owned		Consolidated
	(Dollars in thousands)
Revenues:
Royalties	$	12,749	$	—	$	12,749
Fees	2,438		—		2,438
Product sales to franchisees	14,236		—		14,236
Advertising fund contributions	4,715		—		4,715
Franchise rental income	32,285		—		32,285
Company-owned salon revenue	—		37,897		37,897
Total revenue	66,423		37,897		104,320
Operating expenses:
Cost of product sales to franchisees	11,324		—		11,324
General and administrative	24,255		2,435		26,690
Rent	1,058		11,844		12,902
Advertising fund expense	4,715		—		4,715
Franchise rent expense	32,285		—		32,285
Company-owned salon expense	—		33,611		33,611
Depreciation and amortization	2,077		4,311		6,388
Long-lived asset impairment	94		3,066		3,160
Total operating expenses	75,808		55,267		131,075
Operating loss	$	(9,385)	$	(17,370)	$	(26,755)

	Six Months Ended December 31, 2021
	Franchise		Company-owned		Consolidated
	(Dollars in thousands)
Revenues:
Royalties	$	32,726	$	—	$	32,726
Fees	8,132		—		8,132
Product sales to franchisees	10,436		—		10,436
Advertising fund contributions	16,136		—		16,136
Franchise rental income	67,534		—		67,534
Company-owned salon revenue	—		13,048		13,048
Total revenue	134,964		13,048		148,012
Operating expenses:
Cost of product sales to franchisees	11,532		—		11,532
General and administrative	36,165		1,608		37,773
Rent	3,032		1,859		4,891
Advertising fund expense	16,136		—		16,136
Franchise rent expense	67,534		—		67,534
Company-owned salon expense	—		13,011		13,011
Depreciation and amortization	3,125		724		3,849
Long-lived asset impairment	128		87		215
Total operating expenses	137,652		17,289		154,941
Operating loss	$	(2,688)	$	(4,241)	$	(6,929)

	Six Months Ended December 31, 2020
	Franchise		Company-owned		Consolidated
	(Dollars in thousands)
Revenues:
Royalties	$	24,154	$	—	$	24,154
Fees	4,480		—		4,480
Product sales to franchisees	27,978		—		27,978
Advertising fund contributions	9,224		—		9,224
Franchise rental income	64,568		—		64,568
Company-owned salon revenue	—		85,312		85,312
Total revenue	130,404		85,312		215,716
Operating expenses:
Cost of product sales to franchisees	22,003		—		22,003
General and administrative	47,426		5,411		52,837
Rent	2,337		23,790		26,127
Advertising fund expense	9,224		—		9,224
Franchise rent expense	64,568		—		64,568
Company-owned salon expense	—		76,554		76,554
Depreciation and amortization	4,371		9,393		13,764
Long-lived asset impairment	704		8,280		8,984
Total operating expenses	150,633		123,428		274,061
Operating loss	$	(20,229)	$	(38,116)	$	(58,345)