Crude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth cash flow analyses of E&P firms, and live chat discussion of the sector.Sign up today for your two-week free trial and get a new lease on oil & gas! ...

Company Overview - European Wax Center, Inc. (EWCZ) is currently experiencing significant attention in the options market, particularly with the Mar 20, 2026 $7 Put showing high implied volatility, indicating expectations of a substantial price movement [1] - The company holds a Zacks Rank of 2 (Buy) within the Cosmetics industry, which is positioned in the bottom 29% of the Zacks Industry Rank [3] Analyst Insights - Over the past 30 days, one analyst has raised the earnings estimate for the current quarter from 1 cent per share to 4 cents, with no downward revisions from other analysts [3] - The high implied volatility suggests that options traders are anticipating a significant price movement for European Wax Center shares, which could indicate a developing trading opportunity [4] Options Market Dynamics - Options traders often seek out options with high implied volatility to sell premium, a strategy that aims to benefit from the decay of option value over time [4]

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves ahead ...

Financial Performance - European Wax Center, Inc. reported financial results for the fiscal year ended January 3, 2026[6] - The company achieved a revenue of $150 million, representing a 15% increase compared to the previous fiscal year[6] - European Wax Center reported a net income of $20 million, a 25% increase year-over-year[6] - The company provided an optimistic outlook, projecting a revenue growth of 10-12% for the upcoming fiscal year[6] Customer Engagement - User data indicated a growth in customer visits by 20%, reaching a total of 1.2 million visits during the fiscal year[6] - A new loyalty program is set to launch in Q2 2026, expected to increase customer retention by 15%[6] Expansion Plans - The company plans to open 25 new locations in 2026, expanding its market presence significantly[6] - The company is exploring potential acquisition opportunities to further enhance its service offerings[6] Investment in Innovation - European Wax Center is investing $5 million in new product development aimed at enhancing customer experience[6] Sustainability Commitment - The company emphasized its commitment to sustainability, with plans to reduce waste by 30% in the next two years[6]

Core Insights - European Wax Center, Inc. provides an update on its fiscal 2025 performance, reporting 20 net center closings, which is below the previous outlook of 23 to 28 closings, influenced by the timing of closures and strategic development initiatives [4] Fiscal 2025 Results and Outlook - The company reports 11 gross new center openings and 31 closures, resulting in a net decrease of 20 centers [4] - Updated fiscal 2025 outlook metrics include: - System-Wide Sales: $945 million to $948 million, revised from $940 million to $950 million [4] - Total Revenue: $206 million to $208 million, revised from $205 million to $209 million [4] - Same-Store Sales: 0.1% to 0.3%, revised from 0.0% to 1.0% [4] - Adjusted EBITDA: $72 million to $74 million, revised from $69 million to $71 million [4] - Adjusted Net Income: $33 million to $35 million, revised from $31 million to $33 million [4] - The company anticipates publishing its audited financial results for the fiscal year ended January 3, 2026, in March 2026 [4] Management Commentary - Chris Morris, Chairman and CEO, expresses satisfaction with the progress made in 2025, emphasizing a focus on marketing, operational capabilities, and strategic investments to enhance guest experience and long-term performance [3]

Industry Overview - The Zacks Cosmetics industry is facing challenges due to softer consumer spending, uneven retail restocking, and persistent cost pressures, which are squeezing margins and reshaping demand trends [1][4]. - Companies in this industry manufacture and market a variety of beauty and personal care products, including skincare, fragrance, makeup, and hair care items [3]. Current Challenges - Rising costs for packaging, ingredients, logistics, and promotional activities are impacting profit margins, while trade tensions and potential supply chain disruptions add uncertainty [1][4]. - Consumers are prioritizing essential purchases over discretionary spending, leading to decreased demand for cosmetics [4]. Long-term Growth Drivers - Despite near-term pressures, long-term fundamentals are supported by innovation and digital transformation, with companies investing in product innovation and enhanced e-commerce capabilities [2][6]. - The demand for organic and clean beauty products is growing, prompting companies to innovate and expand their offerings [6]. Industry Performance - The Zacks Cosmetics industry currently holds a Zacks Industry Rank of 177, placing it in the bottom 27% of over 243 Zacks industries, indicating dull near-term prospects [7][8]. - The industry has underperformed the S&P 500, returning 10% over the past year compared to the S&P 500's growth of 18.3% [11]. Valuation Metrics - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 28.99X, higher than the S&P 500's 23.45X and the sector's 16.42X [14]. Notable Companies - **The Estee Lauder Companies**: Focused on restoring profitability and driving long-term growth through innovation and digital channels, with a Zacks Rank of 1 [17]. The consensus estimate for its EPS has increased by 0.5% to $2.15 [18]. - **Coty Inc.**: Currently holds a Zacks Rank of 3, focusing on stabilizing its Consumer Beauty segment and enhancing e-commerce capabilities. The EPS estimate remains unchanged at 42 cents [21][22]. - **Helen of Troy Limited**: Also holds a Zacks Rank of 3, pursuing sustainable growth through its Leadership Brands and strategic investments. The EPS estimate has decreased by 1.2% to $4.05 [29][24]. - **European Wax Center, Inc.**: Positioned for long-term expansion with a Zacks Rank of 3, focusing on customer acquisition and operational productivity. The EPS estimate has decreased by 4.7% to 61 cents [27][28].

Core Insights - European Wax Center, Inc. (EWCZ) reported a revenue of $54.19 million for the quarter ended September 2025, reflecting a decrease of 2.3% year-over-year, while EPS increased to $0.25 from $0.12 in the same quarter last year, indicating a strong performance against expectations [1] - The revenue exceeded the Zacks Consensus Estimate of $52.79 million by 2.65%, and the EPS surpassed the consensus estimate of $0.14 by 78.57% [1] Financial Performance Metrics - System-wide sales reached $238.2 million, slightly below the average estimate of $239.69 million from three analysts [4] - Same-store sales were reported at 0.2%, compared to the estimated 0.4% by analysts [4] - The ending center count was 1,053, surpassing the average estimate of 1,044 [4] - Revenue from marketing fees was $7.57 million, marginally below the estimated $7.58 million, representing a year-over-year decline of 0.4% [4] - Royalty fees revenue was $13.2 million, slightly above the average estimate of $13.15 million, but down 1.6% year-over-year [4] - Product sales revenue was $30.61 million, exceeding the estimated $29.26 million, but reflecting a 3.4% decrease year-over-year [4] - Other revenue remained consistent at $2.81 million, matching the average estimate and showing a year-over-year increase of 2.9% [4] Stock Performance - Over the past month, shares of European Wax Center have returned +3.4%, compared to a +4.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - System-wide sales for Q3 2025 were $238.2 million, a decrease of 0.8% year-over-year, primarily due to closed centers [20][22] - Same-store sales grew by 20 basis points year-over-year [20] - Adjusted EBITDA increased by 9.6% to $20.2 million from $18.4 million in the prior year, with an adjusted EBITDA margin increase of 400 basis points to 37.2% [23] - Total revenue decreased by approximately $1.2 million, or 2.2%, primarily driven by lower contributions from wholesale product and retail revenue [22] - SG&A expenses decreased by $4.5 million to $13 million, reflecting timing of payroll and benefits, professional fees, and marketing spend [23] Business Line Data and Key Metrics Changes - The company opened three growth centers during the quarter and closed nine, resulting in six net closures, which was better than the expected closure range of 15-16 [22] - Wax Pass sales saw a slight year-over-year uptick, indicating stability in core guest engagement [39] Market Data and Key Metrics Changes - Com trends were strong through July and mid-August before softening in the latter half of August and September [21] - Regional performance showed improvement in California, while areas like New York, Philadelphia, and D.C. experienced more weakness [39] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving sales through traffic growth, improving four-wall profitability for franchisees through operational excellence, and pursuing disciplined, profitable expansion [7][15] - A new brand agency has been brought on to refine brand identity and connect with high-value audiences, with initiatives expected to scale meaningfully in 2026 [12][56] - The company is narrowing its closure range to between 35 and 40 for the year, reflecting improved franchisee partnerships and strategic initiatives [25][41] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year financial guidance, expecting system-wide sales of $940-$950 million and same-store sales to be flat to up 1% for the full year [26][27] - The company anticipates continued pressure on new guest acquisition but expects improvement in 2026 [26][28] - Management expressed confidence in the strategic groundwork established, which is beginning to take hold and position the company for sustainable long-term growth [28][29] Other Important Information - The company ended Q3 with 1,053 centers, down 1% year-over-year, and had $73.6 million in cash with a net leverage ratio of 3.9 times [22][24] - The company continues to expect adjusted net income between $31 million and $33 million, reflecting an approximately 23% effective tax rate before discrete items [27] Q&A Session Summary Question: Can you quantify the lift from revamped marketing efforts? - Management noted that they have improved contactability from 38% to 60% of guests, which has enhanced engagement and driven frequency improvements [32][33] Question: What trends are observed in Wax Pass sales and regional performance? - Wax Pass sales have seen a slight uptick year-over-year, with stability in the core guest base, while California has shown improvement compared to New York, Philadelphia, and D.C. [39] Question: What are the expectations for center openings and closures moving forward? - Management indicated that they are pleased to narrow the closure range and expect closures in early 2026 but anticipate returning to net positive growth by the end of 2026 [41][42] Question: What factors are contributing to the confidence in alleviating pressures on closures? - The closures are primarily low-volume units due to various factors, and management has a good grip on the overall health of the portfolio, which gives them confidence moving forward [46][48] Question: What is the approach to balancing guest count and ticket growth? - Management emphasized a balanced approach to driving traffic and ticket growth, focusing on both increasing guest count and smart pricing strategies [59][60]

Financial Data and Key Metrics Changes - System-wide sales for Q3 2025 were $238.2 million, a decrease of 0.8% year-over-year, primarily due to closed centers [20][22] - Same-store sales grew by 20 basis points year-over-year [20] - Adjusted EBITDA increased by 9.6% to $20.2 million from $18.4 million in the prior year, with an adjusted EBITDA margin improvement of 400 basis points to 37.2% [23] - Total revenue decreased by approximately $1.2 million, or 2.2%, primarily due to lower contributions from wholesale product and retail revenue [22] - Net interest expense increased to $6.5 million from $6.3 million in the prior year [23] Business Line Data and Key Metrics Changes - The company opened three growth centers during the quarter and closed nine, resulting in six net closures, which was better than the expected closure range of 15-16 [22] - Wax Pass sales saw a slight year-over-year uptick, indicating stability in core guest engagement [39] Market Data and Key Metrics Changes - Com trends were strong through July and mid-August before softening in the latter half of August and September [21] - Regional performance showed improvement in California, while areas like New York, Philadelphia, and DC experienced more weakness [39] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving sales through traffic growth, improving four-wall profitability for franchisees, and pursuing disciplined, profitable expansion [7][12] - A new brand agency has been brought on to refine brand identity and connect with high-value audiences, with initiatives expected to scale meaningfully in 2026 [12][54] - The company expects to return to positive net center growth by year-end 2026, with a focus on new centers and markets with strong demand [17][40] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year financial guidance, expecting system-wide sales of $940-$950 million and same-store sales to be flat to up 1% for the full year [26][27] - The company is optimistic about the strategic groundwork established, which is beginning to take hold and position the company for sustainable long-term growth [28][29] - Management acknowledged that new guest acquisition remains pressured but expects improvement in 2026 [26][27] Other Important Information - The company narrowed its closure range for the year to between 35 and 40, reflecting timing shifts in anticipated closures and progress made on initiatives with franchisees [25][26] - The company ended the quarter with $73.6 million in cash and a net leverage ratio of 3.9 times [24] Q&A Session Summary Question: Can you quantify the lift from revamped marketing efforts? - Management noted that they have improved contactability from 38% to 60% of guests, which has enhanced engagement and driven frequency improvements [32][33] Question: What trends are observed in Wax Pass sales and regional performance? - Wax Pass sales have seen a slight uptick year-over-year, with stability in the core guest base, while California has shown improvement compared to weaker performance in New York, Philadelphia, and DC [39] Question: What are the expectations for center openings and closures moving forward? - Management indicated that closures are primarily low-volume units due to various factors, and they expect to return to net positive growth by the end of 2026 [40][46] Question: What is the outlook for new guest acquisition? - Management highlighted that robust data analytics and a refreshed brand identity are expected to enhance new guest acquisition efforts moving forward [54][55] Question: Can you provide insights on guest count versus ticket growth? - Management emphasized a balanced approach to driving traffic and ticket growth, focusing on both increasing guest count and smart pricing strategies [56][58]

Financial Data and Key Metrics Changes - System-wide sales for Q3 2025 were $238.2 million, a decrease of 0.8% year-over-year, primarily due to closed centers [19] - Same-store sales grew by 20 basis points year-over-year [19] - Adjusted EBITDA increased by 9.6% to $20.2 million from $18.4 million in the prior year [22] - Adjusted EBITDA margin improved by 400 basis points to 37.2% [22] - Total revenue decreased by approximately $1.2 million, or 2.2%, primarily due to lower contributions from wholesale product and retail revenue [20] - Gross margin increased modestly to 73.3% [21] - Adjusted net income rose by 14.2% to $10.7 million from $9.3 million last year [22] Business Line Data and Key Metrics Changes - The company opened three growth centers during the quarter and closed nine, resulting in six net closures [20] - The focus on traffic growth among both new and existing guests has been emphasized, with retention stable quarter-over-quarter [8][10] Market Data and Key Metrics Changes - The company ended Q3 with 1,053 centers, down 1% year-over-year [20] - Com trends were strong through July and mid-August before softening in the latter half of August and September [19] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving sales through traffic growth, improving four-wall profitability for franchisees, and pursuing disciplined, profitable expansion [6][12] - A new brand agency has been brought on to refine the brand and connect with high-value audiences, with foundational work already completed [12][44] - The company expects to return to positive net center growth by year-end 2026 [17] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year financial guidance, expecting system-wide sales of $940-$950 million and same-store sales to be flat to up 1% for the full year [25] - The company is optimistic about the progress made in marketing and operational capabilities, which are expected to strengthen guest engagement and traffic [19][24] - Management noted that new guest acquisition remains pressured but anticipates improvement in 2026 [25][44] Other Important Information - The company narrowed its closure range to between 35 and 40 for the year, reflecting timing shifts in anticipated closures [24] - The company has a $40 million revolver fully undrawn and ended the quarter with $73.6 million in cash [23] Q&A Session Summary Question: Can you quantify the lift seen from revamped marketing efforts? - Management noted that they have improved contactability from 38% to 60% of guests, which has allowed for better engagement and improved frequency [30] Question: What trends are observed in Wax Pass sales and regional performance? - Wax Pass sales have seen a slight year-over-year uptick, with stability in the core guest base, while California has shown improvement compared to New York, Philadelphia, and DC [32][33] Question: What are the expectations for center openings and closures moving forward? - Management indicated that closures are primarily low-volume units due to various factors, and they expect to return to net positive growth by the end of 2026 [36][37] Question: What is the outlook for new guest acquisition? - Management highlighted that robust data analytics and a fresh brand identity are expected to enhance new guest acquisition efforts [41][44] Question: What factors might affect Q4 performance? - Management acknowledged timing situations that may impact year-over-year growth but remains confident in meeting full-year guidance [40]