In This Article:
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System-wide Sales: USD225.9 million, a 2.1% increase from USD221.4 million.
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Same-Store Sales Growth: 70 basis points positive growth.
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Adjusted EBITDA: USD18.8 million, a 7.2% increase from USD17.5 million.
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Total Revenue: USD51.4 million, a decrease of approximately 0.9%.
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Gross Margin: Increased to 74.2%.
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SG&A Expenses: Increased by USD1.9 million to USD15.3 million.
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Net Income: Adjusted net income increased 10.3% to USD9.5 million.
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Store Locations: Ended Q1 with 1,062 centers, a net closure of 5 centers.
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Cash and Debt: USD58.3 million in cash and USD389 million in senior secured notes.
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Free Cash Flow: Net cash provided by operating activities was USD12.7 million.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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European Wax Center Inc (NASDAQ:EWCZ) reported solid first quarter results with USD225.9 million in system-wide sales and USD18.8 million in adjusted EBITDA.
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The company experienced a 70 basis points increase in same-store sales growth, indicating positive momentum.
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New guest trends have shown improvement each month on a two-year basis, suggesting effective marketing strategies.
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The company is modernizing its marketing engine to drive sales and improve guest engagement, leveraging data to lower cost per acquisition.
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European Wax Center Inc (NASDAQ:EWCZ) is focusing on operational excellence and franchisee support to enhance profitability and performance across centers.
Negative Points
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The consumer backdrop and supply chain environment remain uncertain, posing potential risks to future performance.
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The company experienced 5 net center closures in the first quarter, highlighting challenges in maintaining unit growth.
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Total revenue decreased by approximately 90 basis points due to lower retail and wholesale product revenue.
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Transaction growth remains pressured, indicating challenges in driving consistent customer traffic.
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Increased tariffs on product costs could impact profitability, although the company is working to mitigate these effects.
Q & A Highlights
Q: Can you talk about what changed this quarter, the outlook for the second quarter, and the frequency of the wax pass customers? Also, what is the potential tariff impact? A: Chris Morris, CEO: We are pleased with the progress made since our team was assembled. Our strategies are expected to benefit more in the second half of the year. There hasn't been any material change in promotional activity, and we don't expect any. Regarding tariffs, we are exploring all options to manage exposure, including sourcing alternatives for some medical equipment, but not for our wax formula.