On August 14, 2024, European Wax Center Inc (EWCZ, Financial) released its 8-K filing for the second quarter of fiscal year 2024. European Wax Center Inc is a franchisor and operator of out-of-home (OOH) waxing services, with product sales consisting of revenue earned from sales of proprietary wax.
Performance Overview
European Wax Center Inc (EWCZ, Financial) reported a total revenue of $59.9 million for Q2 FY2024, a 1.3% increase from $59.1 million in the same period last year, surpassing the analyst estimate of $59.11 million. The company also reported a GAAP net income of $6.0 million, a 7.3% increase from $5.6 million in the prior year period, exceeding the estimated net income of $5.8 million.
Key Financial Achievements
European Wax Center Inc (EWCZ, Financial) achieved several notable financial milestones:
- System-wide sales increased by 2.3% to $260.2 million.
- Same-store sales grew by 1.6%.
- Adjusted net income rose by 4.0% to $7.3 million.
- Adjusted EBITDA decreased by 2.6% to $20.6 million.
Income Statement Highlights
| Metric | Q2 FY2024 | Q2 FY2023 |
|---|---|---|
| Total Revenue | $59.9 million | $59.1 million |
| GAAP Net Income | $6.0 million | $5.6 million |
| Adjusted Net Income | $7.3 million | $7.1 million |
| Adjusted EBITDA | $20.6 million | $21.2 million |
Balance Sheet and Cash Flow
As of July 6, 2024, European Wax Center Inc (EWCZ, Financial) reported $55.7 million in cash and cash equivalents, $6.5 million in restricted cash, and $392.0 million in borrowings outstanding under its senior secured notes. Net cash provided by operating activities totaled $14.4 million during the quarter.
Challenges and Strategic Initiatives
Despite the positive financial performance, European Wax Center Inc (EWCZ, Financial) faces challenges due to the ongoing macroeconomic environment, which continues to pressure consumer spending and the company's ability to attract and retain new guests. The company has worked with franchise partners to reevaluate near-term development plans and extend the timeline of new center openings to improve overall performance.
David Berg, Executive Chairman and CEO of European Wax Center Inc, stated, "While the second quarter marked a period of top line growth, anchored by the consistency and stability of our core guests, the ongoing macroeconomic environment continues to pressure consumer spending and our ability to attract and retain new guests to our brand."
Fiscal 2024 Outlook
European Wax Center Inc (EWCZ, Financial) updated its fiscal 2024 outlook:
| Metric | Current Outlook | Previous Outlook |
|---|---|---|
| New Center Openings, Net | 27 to 32 | 75 to 80 |
| System-Wide Sales | $930 million to $950 million | $1,000 million to $1,025 million |
| Total Revenue | $216 million to $221 million | $225 million to $232 million |
| Same-Store Sales | (1.5)% to 0.5% | 2% to 5% |
| Adjusted Net Income | $19 million to $22 million | $22 million to $25 million |
| Adjusted EBITDA | $70 million to $74 million | $75 million to $80 million |
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from European Wax Center Inc for further details.
