European Wax Center misses Q2 revenue, beats adjusted net income estimates

Overview

• European Wax Center Q2 revenue falls 6.6%, missing analysts' expectations

• Adjusted net income rises 5.6%, beating estimates, per LSEG data

• Adjusted EBITDA increases 4.7%, surpassing analysts' forecasts, per LSEG data

Outlook

• Company sees fiscal 2025 system-wide sales of $940 mln to $950 mln

• European Wax Center expects fiscal 2025 revenue of $205 mln to $209 mln

• Company anticipates 28 to 50 net center closings in fiscal 2025

• European Wax Center projects fiscal 2025 adjusted EBITDA of $69 mln to $71 mln

Result Drivers

• SYSTEM-WIDE SALES DECLINE - Drop due to decrease in same day services and retail sales, partially offset by increased wax pass sales

• SG&A EXPENSES - Increase due to higher payroll and benefits, and absence of prior year's legal judgment gain

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the personal services peer group is "buy"

• Wall Street's median 12-month price target for European Wax Center Inc is $6.00, about 26.5% above its August 12 closing price of $4.41

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nGNX6NsXT5