UPDATE 1-Regis Q2 rev below Street; comp sales disappoint

Jan 9 (Reuters) - Hair salon operator Regis Corp (RGS.N) reported second-quarter revenue below Wall Street estimates and said same-store sales fell short of its expectations on lower consumer spending amid weak U.S. economic conditions.

"Consumer cut backs have impacted our service business more than we had expected, especially in the month of December," Chief Executive Paul Finkelstein said in a statement.

For the quarter ended Dec. 31, the company said sales at stores open at least a year fell 5.4 percent, below its prior outlook range of a fall of 1 percent to a rise of 1 percent.

While same-store sales at Regis' retail division fell 10.8 percent, comparable-store sales at its service unit fell 3.1 percent.

In the latest second quarter, consolidated revenue fell 4.0 percent to $655 million. Analysts on average were expecting the company to earn revenue of $693.4 million, according to Reuters Estimates.

Deconsolidation of the European franchise salon operations reduced revenue in the quarter by about $17 million, the company said. In early 2008, Regis merged its continental European franchise salon operations with the Franck Provost Salon Group.

The company, which earns 70 percent of its revenue from the service division, said it expects to be profitable in the second quarter and for the financial year despite current economic conditions.

Shares of Minneapolis-based Regis closed at 14.49 on Thursday on the New York Stock Exchange. (Reporting by Archana Shankar in Bangalore; Editing by Pratish Narayanan)