European Wax Center, Inc. Reports Second Quarter Fiscal Year 2025 Results

Core Insights - European Wax Center, Inc. reported financial results for the second quarter of fiscal 2025, indicating a transitional year focused on strengthening the business foundation through data-driven strategies and disciplined execution [2][3] - The company aims to drive traffic and sales growth, improve profitability for franchisees, and pursue profitable expansion [3] Financial Performance - System-wide sales decreased by 1.0% to $257.6 million from $260.2 million in the prior year period, primarily due to a decline in same-day services and retail sales [6][7] - Total revenue for the quarter was $55.9 million, down 6.6% from $59.9 million in the prior year [6][7] - Same-store sales increased by 0.3% [6][7] - GAAP net income decreased by 9.0% to $5.4 million, while adjusted net income increased by 5.6% to $11.8 million [6][7] - Adjusted EBITDA rose by 4.7% to $21.6 million, with an adjusted EBITDA margin increase of 420 basis points to 38.7% [6][7] Year-to-Date Results - For the first half of fiscal 2025, system-wide sales increased by 0.4% to $483.5 million, driven by cash collected from wax pass sales [13] - Total revenue for the year-to-date period was $107.3 million, down 3.9% from the previous year [13] - Same-store sales increased by 0.5% [13] - Net income for the first half decreased by 16.9% to $8.0 million, while adjusted net income increased by 7.9% to $21.3 million [13] Balance Sheet and Cash Flow - The company ended the second quarter with $63.9 million in cash and cash equivalents and $388.0 million in borrowings outstanding [8] - Net cash provided by operating activities totaled $15.2 million during the quarter [8] Fiscal 2025 Financial Outlook - The company updated its fiscal 2025 outlook, projecting system-wide sales between $940 million and $950 million, total revenue between $205 million and $209 million, and same-store sales growth of 0.0% to 1.0% [9][11] - The adjusted net income outlook remains between $31 million and $33 million, with adjusted EBITDA also projected between $69 million and $71 million [11] Center Openings and Closures - Franchisees opened 2 centers and closed 5 during the second quarter, maintaining a total of 1,059 centers [6][7] - For fiscal 2025, the company estimates franchisees will open 10 to 12 new centers while closing 40 to 60 centers, resulting in a net closure of 28 to 50 centers [12]