European Wax Center, Inc. Reports First Quarter Fiscal Year 2025 Results

Reiterates fiscal 2025 outlook

First Quarter Fiscal 2025 versus 2024

   -- Net new centers increased 1.0% to 1,062 total centers in 45 states 
 
   -- System-wide sales of $225.9 million increased 2.1% 
 
   -- Total revenue of $51.4 million decreased 0.9% 
 
   -- Same-store sales increased 0.7% 
 
   -- GAAP net income of $2.6 million decreased 29.7% 
 
   -- Adjusted Net Income, as now defined, of $9.5 million increased 10.3% 
 
   -- Adjusted EBITDA of $18.8 million increased 7.2% 

PLANO, Texas, May 14, 2025 (GLOBE NEWSWIRE) -- Today, European Wax Center, Inc. (NASDAQ: EWCZ), the leading franchisor and operator of out-of-home waxing services in the United States, reports financial results for the 13 weeks ended April 5, 2025 as compared to the 13 weeks ended April 6, 2024.

Chris Morris, Chairman and CEO of European Wax Center, Inc. stated, "During the first quarter, we made meaningful progress against our strategic priorities and delivered solid financial performance, enabling us to reiterate our full-year outlook. We continue to advance our enhanced, data-rich marketing engine, and guest research is generating valuable insights that will shape our traffic-driving strategies. We're also strengthening our corporate infrastructure to better support franchisees through enhanced tools, resources and action plans, all while maintaining our focus on long-term network health and our goal of achieving net unit growth by the end of 2026."

Mr. Morris continued, "My first 100 days have only amplified my conviction in the European Wax Center brand and our leading market position. At the same time, we continue to navigate a dynamic macroeconomic environment and are taking a disciplined, strategic approach to managing our supply chain with franchisee success top of mind. Alongside my executive team, we are taking quick action to drive near-term results while sharpening a clear vision for the future that is anchored in driving sales, improving four-wall profitability and reigniting long-term unit growth."

Results for the First Quarter of Fiscal 2025 versus Fiscal 2024

   -- Franchisees opened 5 and closed 10 centers. We ended the quarter with 
      1,062 centers, representing a 1.0% increase versus 1,051 centers in the 
      prior year period. 
 
   -- System-wide sales of $225.9 million increased 2.1%from $221.4 million in 
      the prior year period, primarily driven by increased spend by guests at 
      existing centers and net new centers opened over the past twelve months. 
 
   -- Total revenue of $51.4 million decreased 0.9% from $51.9 million in the 
      prior year period. 
 
   -- Same-store sales increased 0.7%. 
 
   -- Selling, general and administrative expenses ("SG&A") of $15.3 million 
      increased 13.9% from $13.5 million in the prior year period. SG&A as a 
      percent of total revenue increased 380 basis points to 29.8% from 26.0% 
      primarily driven by increased stock based compensation and executive 
      severance expense, partially offset by a decrease in annual franchisee 
      conference expenses. 
 
   -- Interest expense, net of $6.6 million increased from $6.3 million in the 
      prior year period. 
 
   -- Income tax expense increased to $1.4 million from $1.2 million in the 
      prior year period. The effective tax rate increased to 35.0% from 24.9% 
      in the prior year period, primarily due to the impact of nondeductible 
      officer compensation in the current year. 
 
   -- Net income of $2.6 million decreased 29.7% from $3.7 million, and 
      Adjusted Net Income of $9.5 million increased 10.3% from $8.6 million in 
      the prior year period.  Net income margin decreased 200 basis points to 
      5.0% from 7.0%. 
 
   -- Adjusted EBITDA of $18.8 million increased 7.2% from $17.5 million in the 
      prior year period. Adjusted EBITDA Margin increased 280 basis points to 
      36.5% from 33.7%. 
 
   -- The Company repurchased approximately 0.2 million shares of its Class A 
      Common Stock during the period for $1.1 million, bringing cumulative 
      repurchases under the Company's current $50 million authorization to 
      $41.2 million. 

Balance Sheet and Cash Flow

The Company ended the quarter with $58.3 million in cash and cash equivalents, $6.5 million in restricted cash, $389.0 million in borrowings outstanding under its senior secured notes and no outstanding borrowings under its revolving credit facility. Net cash provided by operating activities totaled $12.7 million during the quarter.

Fiscal 2025 Financial Outlook

The Company reiterates the following financial outlook for fiscal year 2025:

 
                                                    Fiscal 2025 Outlook 
System-Wide Sales                               $940 million to $960 million 
Total Revenue                                   $210 million to $214 million 
Same-Store Sales                                        0.0% to 2.0% 
Adjusted Net Income(1) , as previously defined   $16 million to $18 million 
Adjusted Net Income(1) , as now defined          $31 million to $33 million 
Adjusted EBITDA                                  $69 million to $71 million 
____________________ 
(1) Adjusted Net Income outlook assumes an effective 
 tax rate of approximately 23% for fiscal 2025 computed 
 by applying our estimated blended statutory tax rate 
 and incorporating the effect of nondeductible and 
 other rate impacting adjustments. See Disclosure Regarding 
 Non-GAAP Financial Measures for additional information 
 regarding the change in definition for Adjusted Net 
 Income. 
 
 

Fiscal 2025 Net New Center Outlook

The Company currently estimates that franchisees will open 10 to 12 new centers and close 40 to 60 centers, translating to 28 to 50 net center closings in fiscal 2025. The Company expects 7 to 8 net center closings during the second quarter. As of May 13, 2025, 1 center has opened and 2 have closed in the second quarter.

See "Disclosure Regarding Non-GAAP Financial Measures" and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.

Webcast and Conference Call Information

European Wax Center, Inc. will host a conference call to discuss first quarter fiscal 2025 results today, May 14, 2025, at 8:00 a.m. ET/7:00 a.m. CT. To access the conference call dial-in information, analysts should click here to register online at least 15 minutes before the start of the call. All other participants are asked to access the earnings webcast via https://investors.waxcenter.com. A replay of the webcast will be available two hours after the call and archived on the same web page for one year.

About European Wax Center, Inc.

European Wax Center, Inc. (NASDAQ: EWCZ) is the leading franchisor and operator of out-of-home waxing services in the United States. European Wax Center locations perform more than 23 million services per year, providing guests with an unparalleled, professional personal care experience administered by highly trained wax specialists within the privacy of clean, individual waxing suites. The Company continues to revolutionize the waxing industry with its innovative Comfort Wax$(R)$ formulated with the highest quality ingredients to make waxing a more efficient and relatively painless experience, along with its collection of proprietary products to help enhance and extend waxing results. By leading with its values -- We Care About Each Other, We Do the Right Thing, We Delight Our Guests, and We Have Fun While Being Awesome -- the Company is proud to be Certified$(TM)$ by Great Place to Work(R). European Wax Center, Inc. was founded in 2004 and is headquartered in Plano, Texas. Its network, which includes more than 1,000 centers in 45 states, generated sales of $951 million in fiscal 2024. For more information, including how to receive your first wax free, please visit: https://waxcenter.com.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include but are not limited to European Wax Center, Inc.'s strategy, outlook and growth prospects, its operational and financial outlook for fiscal 2025, expected center openings and closures, its capital allocation strategy, including the share repurchase program and its long-term targets and algorithm, including but not limited to statements under the headings "Fiscal 2025 Financial Outlook" and "Fiscal 2025 Net New Center Outlook" and statements by European Wax Center's chief executive officer. Words including "anticipate," "believe," "continue," "could," "estimate," "expect," "likely," "intend," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "will," or "would," or, in each case, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

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