European Wax Center Inc (NAS:EWCZ)
$ 8.28 -0.32 (-3.72%) Market Cap: 395.97 Mil Enterprise Value: 735.89 Mil PE Ratio: 31.88 PB Ratio: 4.66 GF Score: 49/100
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Q2 2024 European Wax Center Inc Earnings Call Transcript

Aug 14, 2024 / 12:00PM GMT
Release Date Price: $5.06 (-26.98%)

Key Points

Positve
  • European Wax Center Inc (EWCZ) reported a 2.3% increase in system-wide sales, reaching $260 million.
  • The company achieved an adjusted EBITDA of $20.6 million with a margin of 34.5%, demonstrating effective bottom-line management.
  • Gross margin improved by 180 basis points to 73.2%, primarily due to product cost savings.
  • The company has a robust pipeline of over 370 locations, indicating strong long-term growth potential.
  • European Wax Center Inc (EWCZ) continues to generate strong free cash flow, even in a challenging macroeconomic environment.
Negative
  • Top-line revenue was modestly below expectations, with total revenue just under $60 million.
  • The company is facing a challenging macroeconomic environment, affecting consumer spending and new guest growth.
  • European Wax Center Inc (EWCZ) has reduced its outlook for the second half of 2024 due to softer transaction volumes.
  • The company has lowered its unit growth outlook for 2024, delaying new center openings to address near-term challenges.
  • Certain geographies, particularly the West Coast, are facing increased rent and labor costs, impacting four-wall profitability.
Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to European Wax Center second quarter fiscal 2024 earnings call. (Operator Instructions) On the call today are David Berg, Chief Executive Officer; and Stacie Shirley, Chief Financial Officer.

I would now like to turn the conference over to Bethany Johns, Director of Investor Relation. Ma'am, you may begin.

Bethany Johns
European Wax Center Inc - IR

Thank you, and welcome to European Wax Center's second quarter fiscal 2024 earnings call. On today's call, David Berg will begin with a brief review of our second quarter performance and discuss our priorities for the balance of 2024. Then Stacy will provide additional details regarding our financial performance and updates to our fiscal 2024 outlook. Following the prepared remarks, the team will be available to take questions.

Before we start, I would like to remind you of our legal disclaimer. We'll make certain statements today which are forward-looking within the meaning of the Federal Securities Laws, including statements

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