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 [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]

Company Overview - European Wax Center is the largest and fastest-growing provider of out-of-home waxing services[8] - The company performed over 23 million waxing services via 15+ million guest visits in FY 2023[8] - As of January 6, 2024, the company has 1,044 centers[11, 14] - The company is approximately 6x larger than the next largest waxing-focused competitor by center count and ~11x larger by system-wide sales[14] Financial Performance - FY 2023 system-wide sales were $955 million[12] - FY 2023 revenue was $221 million[11] - FY 2023 Adjusted EBITDA margin was 344%[11] - FY 2023 Free Cash Flow was $55 million[12] Growth and Future Outlook - The company anticipates opening 27-32 net new centers in FY 2024[52] - The company expects $930M – $950M system-wide sales and $216M – $221M EWC Revenue in FY2024[52] - The company has a strong multi-year development pipeline with 370+ locations[31, 34]

Financial Data and Key Metrics Changes - System wide sales for Q1 2025 reached $225.9 million, a 2.1% increase from $221.4 million in Q1 2024, driven by the shift in the Easter holiday and payment timing [23][6] - Same store sales grew by 70 basis points, but adjusting for the Easter shift, it would have been approximately flat [23][6] - Adjusted EBITDA increased by 7.2% to $18.8 million from $17.5 million in the prior year, with an adjusted EBITDA margin rising to 36.5% from 33.7% [25][26] - Adjusted net income rose by 10.3% to $9.5 million from $8.6 million in the previous year [26] Business Line Data and Key Metrics Changes - Total revenue decreased by approximately $400,000 or 90 basis points to $51.4 million, primarily due to lower retail and wholesale product revenue [24] - SG&A expenses increased by $1.9 million to $15.3 million, driven by higher stock-based compensation and executive severance costs [25] - Advertising expenses decreased by $1.4 million due to the timing of spend within the fiscal year [25] Market Data and Key Metrics Changes - The company ended Q1 with 1,062 centers, representing a 1% growth year over year, with five gross openings and ten closures resulting in five net center closures [22] - The company expects 10 to 12 gross openings and 40 to 60 center closures for the year, leading to 28 to 50 net center closures [29] Company Strategy and Development Direction - The company aims to focus on driving sales, improving four wall profitability, and reigniting unit growth as critical components for revitalizing long-term growth [10][19] - A data-rich digital-first marketing engine is being developed to enhance guest engagement and drive new guest acquisition [11][12] - The company is implementing a more sophisticated development approach focused on thoughtful, profitable expansion, identifying underpenetrated trade areas for future growth [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain consumer backdrop and supply chain environment but emphasizes strong fundamentals and proactive management [7][6] - The outlook for 2025 is reiterated, assuming a stable consumer environment, with expectations for system wide sales between $940 million and $960 million [28][30] - Management is confident in their ability to manage tariff impacts and maintain guidance despite macroeconomic challenges [31][34] Other Important Information - The company has made substantial progress in assembling a team of seasoned leaders to execute strategic priorities for 2025 and beyond [19][20] - The company is actively exploring alternative sourcing options to mitigate tariff impacts on product costs [31][44] Q&A Session Summary Question: Can you talk about the game plan going forward and the potential tariff impact? - Management is pleased with progress and sees stability in the business, with no material changes in promotional activity expected [39][41] - They are actively exploring all options to manage tariff exposure, including alternative sourcing [44] Question: What are you hearing from franchisees regarding center closures? - Franchisees are passionate about the brand, but the past few years have been tough, leading to underperforming centers [48][50] Question: Can you provide insight into the cost to build and return to net unit growth? - The increase in capital investment is attributed to inflationary pressures, with a focus on optimizing costs and operations [57] Question: What are the key themes for the upcoming franchise convention? - The convention will cover a full situation assessment, opportunities, and a plan to maximize potential [60] Question: How do you prioritize marketing, franchisee execution, and other factors? - The primary focus is on the marketing funnel and franchisee execution, followed by waxer consistency and consumer value [96][98] Question: What is the performance of underperforming stores versus healthy stores? - Underperforming stores are primarily an AUV issue, with various factors contributing to their performance [65][100]