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

Rhea-AI Summary

European Wax Center (NASDAQ: EWCZ) reported its Q1 FY2025 results with mixed performance. The company saw system-wide sales increase 2.1% to $225.9 million and same-store sales growth of 0.7%. However, total revenue decreased 0.9% to $51.4 million. The company's network expanded to 1,062 centers across 45 states, a 1.0% increase year-over-year. While GAAP net income declined 29.7% to $2.6 million, Adjusted EBITDA increased 7.2% to $18.8 million. For fiscal 2025, EWCZ expects system-wide sales of $940-960 million and projects 28-50 net center closings. The company maintains a strong balance sheet with $58.3 million in cash and continues its share repurchase program, having used $41.2 million of its $50 million authorization.

Positive

• System-wide sales increased 2.1% to $225.9 million
• Same-store sales grew 0.7%
• Adjusted EBITDA increased 7.2% to $18.8 million
• Adjusted Net Income rose 10.3% to $9.5 million
• Strong cash position with $58.3 million in cash and cash equivalents

Negative

• Total revenue decreased 0.9% to $51.4 million
• GAAP net income declined 29.7% to $2.6 million
• SG&A expenses increased 13.9% to $15.3 million
• Net income margin decreased 200 basis points to 5.0%
• Projecting 28-50 net center closings in fiscal 2025

Insights

Financial Analyst

EWCZ delivered modest Q1 growth with increasing profits despite revenue decline, but forecasts significant net center closures in 2025.

European Wax Center's Q1 results reveal a mixed performance with some encouraging metrics alongside concerning indicators. Same-store sales increased 0.7%, showing modest improvement in existing locations, while system-wide sales grew 2.1% to $225.9 million. However, total revenue declined slightly by 0.9% to $51.4 million.

The company's profitability metrics tell an interesting story. While GAAP net income decreased significantly by 29.7% to $2.6 million, Adjusted EBITDA increased 7.2% to $18.8 million with margin improvement of 280 basis points to 36.5%. This divergence suggests effective cost management in core operations despite higher expenses in certain areas.

The concerning center growth dynamics deserve attention. With only 5 openings versus 10 closures in Q1, and a forecast of 10-12 openings versus 40-60 closures for the full year 2025, EWCZ is projecting significant network contraction of 28-50 net center closings. This suggests deeper challenges in franchisee economics despite management's stated goal of achieving net unit growth by end of 2026.

The SG&A expense increase of 13.9% warrants scrutiny, particularly as it's attributed to increased stock-based compensation and executive severance. These higher corporate costs during a period of center contraction raise questions about operational efficiency.

The company maintains a substantial debt position of $389 million in senior secured notes, though its $58.3 million cash balance and unused revolving credit facility provide adequate liquidity. The share repurchase program continues with $1.1 million spent in Q1, bringing total repurchases to $41.2 million of the $50 million authorization.

Management's commentary acknowledges the "dynamic macroeconomic environment" while emphasizing strategic priorities around marketing, franchisee support, and network health. CEO Chris Morris, seemingly new to the role based on the "first 100 days" reference, expresses confidence in the brand while acknowledging challenges.

The unchanged full-year guidance suggests management believes Q1 performance aligns with their annual targets, though the projected center closures indicate significant network rationalization is underway. This will be a pivotal year for EWCZ as it attempts to stabilize its franchise network while maintaining financial performance.

Reiterates fiscal 2025 outlook

First Quarter Fiscal 2025 versus 2024

• Net new centers increased 1.0% to 1,062 total centers in 45 states
• System-wide sales of $225.9 million increased 2.1%
• Total revenue of $51.4 million decreased 0.9%
• Same-store sales increased 0.7%
• GAAP net income of $2.6 million decreased 29.7%
• Adjusted Net Income, as now defined, of $9.5 million increased 10.3%
• Adjusted EBITDA of $18.8 million increased 7.2%
  

PLANO, Texas, May 14, 2025 (GLOBE NEWSWIRE) -- Today, European Wax Center, Inc. (NASDAQ: EWCZ), the leading franchisor and operator of out-of-home waxing services in the United States, reports financial results for the 13 weeks ended April 5, 2025 as compared to the 13 weeks ended April 6, 2024.

Chris Morris, Chairman and CEO of European Wax Center, Inc. stated, “During the first quarter, we made meaningful progress against our strategic priorities and delivered solid financial performance, enabling us to reiterate our full-year outlook. We continue to advance our enhanced, data-rich marketing engine, and guest research is generating valuable insights that will shape our traffic-driving strategies. We're also strengthening our corporate infrastructure to better support franchisees through enhanced tools, resources and action plans, all while maintaining our focus on long-term network health and our goal of achieving net unit growth by the end of 2026.”

Mr. Morris continued, “My first 100 days have only amplified my conviction in the European Wax Center brand and our leading market position. At the same time, we continue to navigate a dynamic macroeconomic environment and are taking a disciplined, strategic approach to managing our supply chain with franchisee success top of mind. Alongside my executive team, we are taking quick action to drive near-term results while sharpening a clear vision for the future that is anchored in driving sales, improving four-wall profitability and reigniting long-term unit growth.”

Results for the First Quarter of Fiscal 2025 versus Fiscal 2024

• Franchisees opened 5 and closed 10 centers. We ended the quarter with 1,062 centers, representing a 1.0% increase versus 1,051 centers in the prior year period.
• System-wide sales of $225.9 million increased 2.1%from $221.4 million in the prior year period, primarily driven by increased spend by guests at existing centers and net new centers opened over the past twelve months.
• Total revenue of $51.4 million decreased 0.9% from $51.9 million in the prior year period.
• Same-store sales increased 0.7%.
• Selling, general and administrative expenses (“SG&A”) of $15.3 million increased 13.9% from $13.5 million in the prior year period. SG&A as a percent of total revenue increased 380 basis points to 29.8% from 26.0% primarily driven by increased stock based compensation and executive severance expense, partially offset by a decrease in annual franchisee conference expenses.
• Interest expense, net of $6.6 million increased from $6.3 million in the prior year period.
• Income tax expense increased to $1.4 million from $1.2 million in the prior year period. The effective tax rate increased to 35.0% from 24.9% in the prior year period, primarily due to the impact of nondeductible officer compensation in the current year.
• Net income of $2.6 million decreased 29.7% from $3.7 million, and Adjusted Net Income of $9.5 million increased 10.3% from $8.6 million in the prior year period.  Net income margin decreased 200 basis points to 5.0% from 7.0%.
• Adjusted EBITDA of $18.8 million increased 7.2% from $17.5 million in the prior year period. Adjusted EBITDA Margin increased 280 basis points to 36.5% from 33.7%.
• The Company repurchased approximately 0.2 million shares of its Class A Common Stock during the period for $1.1 million, bringing cumulative repurchases under the Company’s current $50 million authorization to $41.2 million.

Balance Sheet and Cash Flow
The Company ended the quarter with $58.3 million in cash and cash equivalents, $6.5 million in restricted cash, $389.0 million in borrowings outstanding under its senior secured notes and no outstanding borrowings under its revolving credit facility. Net cash provided by operating activities totaled $12.7 million during the quarter.

Fiscal 2025 Financial Outlook
The Company reiterates the following financial outlook for fiscal year 2025:

	Fiscal 2025 Outlook
System-Wide Sales	$940 million to $960 million
Total Revenue	$210 million to $214 million
Same-Store Sales	0.0% to 2.0%
Adjusted Net Income(1), as previously defined	$16 million to $18 million
Adjusted Net Income(1), as now defined	$31 million to $33 million
Adjusted EBITDA	$69 million to $71 million
____________________
(1) Adjusted Net Income outlook assumes an effective tax rate of approximately 23% for fiscal 2025 computed by applying our estimated blended statutory tax rate and incorporating the effect of nondeductible and other rate impacting adjustments. See Disclosure Regarding Non-GAAP Financial Measures for additional information regarding the change in definition for Adjusted Net Income.

Fiscal 2025 Net New Center Outlook
The Company currently estimates that franchisees will open 10 to 12 new centers and close 40 to 60 centers, translating to 28 to 50 net center closings in fiscal 2025. The Company expects 7 to 8 net center closings during the second quarter. As of May 13, 2025, 1 center has opened and 2 have closed in the second quarter.

See “Disclosure Regarding Non-GAAP Financial Measures” and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.

Webcast and Conference Call Information
European Wax Center, Inc. will host a conference call to discuss first quarter fiscal 2025 results today, May 14, 2025, at 8:00 a.m. ET/7:00 a.m. CT. To access the conference call dial-in information, analysts should click here to register online at least 15 minutes before the start of the call. All other participants are asked to access the earnings webcast via https://investors.waxcenter.com. A replay of the webcast will be available two hours after the call and archived on the same web page for one year.

About European Wax Center, Inc.
European Wax Center, Inc. (NASDAQ: EWCZ) is the leading franchisor and operator of out-of-home waxing services in the United States. European Wax Center locations perform more than 23 million services per year, providing guests with an unparalleled, professional personal care experience administered by highly trained wax specialists within the privacy of clean, individual waxing suites. The Company continues to revolutionize the waxing industry with its innovative Comfort Wax® formulated with the highest quality ingredients to make waxing a more efficient and relatively painless experience, along with its collection of proprietary products to help enhance and extend waxing results. By leading with its values – We Care About Each Other, We Do the Right Thing, We Delight Our Guests, and We Have Fun While Being Awesome – the Company is proud to be Certified™ by Great Place to Work®. European Wax Center, Inc. was founded in 2004 and is headquartered in Plano, Texas. Its network, which includes more than 1,000 centers in 45 states, generated sales of $951 million in fiscal 2024. For more information, including how to receive your first wax free, please visit: https://waxcenter.com.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include but are not limited to European Wax Center, Inc.’s strategy, outlook and growth prospects, its operational and financial outlook for fiscal 2025, expected center openings and closures, its capital allocation strategy, including the share repurchase program and its long-term targets and algorithm, including but not limited to statements under the headings “Fiscal 2025 Financial Outlook” and “Fiscal 2025 Net New Center Outlook” and statements by European Wax Center’s chief executive officer. Words including “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “likely,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or “would,” or, in each case, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

These forward-looking statements are based on current expectations and beliefs. These statements are neither promises nor guarantees, and involve known and unknown risks, uncertainties and other important factors that may cause the Company’s actual results, performance or achievements to be materially different than the results, performance or achievements expressed or implied by the forward-looking statements. Some of the key factors that could cause actual results to differ from the Company's expectations include, but are not limited to, the following risks related to its business: the operational and financial results of franchisees; the ability of its franchisees to enter new markets, select appropriate sites for new centers or open new centers; the effectiveness of the Company’s marketing and advertising programs and the active participation of franchisees in enhancing the value of its brand; the failure of its franchisees to participate in and comply with its agreements, business model and policies; the Company’s and its franchisees’ ability to attract and retain guests; the effect of social media on the Company’s reputation; the Company’s ability to compete with other industry participants and respond to market trends and changes in consumer preferences; the effect of the Company’s planned growth on its management, employees, information systems and internal controls; the Company’s ability to retain and effectively respond to a loss of key executives; recruitment efforts; a significant failure, interruptions or security breach of the Company’s computer systems or information technology; the Company and its franchisees’ ability to attract, train, and retain talented wax specialists and managers; changes in the availability or cost of labor; the Company’s ability to retain its franchisees and to maintain the quality of existing franchisees; failure of the Company’s franchisees to implement business development plans; the ability of the Company’s limited key suppliers, including international suppliers, and distribution centers to deliver their products; changes in supply costs and decreases in the Company’s product sourcing revenue, including due to the imposition of tariffs; the Company’s ability to adequately protect its intellectual property; the Company’s substantial indebtedness; the impact of paying some of the Company’s pre-IPO owners for certain tax benefits the Company may claim; changes in general economic and business conditions, including changes due to tariff policy and geopolitical tensions; the Company’s and its franchisees’ ability to comply with existing and future health, employment and other governmental regulations; complaints or litigation that may adversely affect the Company’s business and reputation; the seasonality of the Company’s business resulting in fluctuations in its results of operations; the impact of global crises on the Company’s operations and financial performance; the impact of inflation and rising interest rates on the Company’s business; the Company’s access to sources of liquidity and capital to finance its continued operations and growth strategy and the other important factors discussed under the caption “Risk Factors” under Item 1A in the Company’s Annual Report on Form 10-K for the year ended January 4, 2025 filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in its other filings with the SEC, accessible on the SEC’s website at www.sec.gov and Investors Relations section of the Company’s website at www.waxcenter.com.

These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise.

Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has included certain non-GAAP financial measures in this release, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Net Leverage Ratio. Management believes these non-GAAP financial measures are useful because they enable management, investors, and others to assess the operating performance of the Company.

We define EBITDA as net income (loss) before interest, taxes, depreciation and amortization. We believe that EBITDA, which eliminates the impact of certain expenses that we do not believe reflect our underlying business performance, provides useful information to investors to assess the performance of our business.

We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization, adjusted for the impact of certain additional non-cash and other items that we do not consider in our evaluation of ongoing performance of our core operations. These items include non-cash equity-based compensation expense, non-cash gains and losses on remeasurement of our tax receivable agreement liability, contractual cash interest on our tax receivable agreement liability, transaction costs and other one-time expenses and/or gains.

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue.

We define Adjusted Net Income (Loss) as net income (loss) adjusted for the impact of certain additional non-cash and other items that we do not consider in our evaluation of ongoing performance of our core operations. These items include non-cash equity-based compensation expense, amortization of intangible assets, debt extinguishment costs, non-cash gains and losses on remeasurement of our tax receivable agreement liability, contractual cash interest on our tax receivable agreement liability, transaction costs and other one-time expenses and/or gains. Previously, the Company did not include amortization of intangible assets in the calculation. However, the Company revised the definition in the first quarter of 2025 as a result of a change in the way management reviews Adjusted Net Income (Loss) in order to remove the impact of the non-cash amortization of intangible assets which management does not view as part of our core operations. Management believes excluding this enables investors to evaluate more clearly and consistently the Company's core operating performance in the same manner that management evaluates its core operating performance. The comparative period was also adjusted based on the revised definition. In addition, see following tables for Adjusted Net Income (Loss) for the thirteen weeks and year ended January 4, 2025 using the revised definition.

We define Net Leverage Ratio as the total principal balance of our outstanding debt (“total debt”) less cash and cash equivalents, then divided by Adjusted EBITDA for the trailing twelve months.

Please refer to the reconciliations of non-GAAP financial measures to their GAAP equivalents located at the end of this release. This release includes forward-looking guidance for certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income. These measures will differ from net income (loss), determined in accordance with GAAP, in ways similar to those described in the reconciliations at the end of this release. We are not able to provide, without unreasonable effort, guidance for net income (loss), determined in accordance with GAAP, or a reconciliation of guidance for Adjusted EBITDA and Adjusted Net Income (Loss) to the most directly comparable GAAP measure because the Company is not able to predict with reasonable certainty the amount or nature of all items that will be included in net income (loss).

Glossary of Terms for Our Key Business Metrics
System-Wide Sales. System-wide sales represent sales from same day services, retail sales and cash collected from wax passes for all centers in our network, including both franchisee-owned and corporate-owned centers. While we do not record franchised center sales as revenue, our royalty revenue is calculated based on a percentage of franchised center sales, which are 6.0% of sales, net of retail product sales, as defined in the franchise agreement. This measure allows us to better assess changes in our royalty revenue, our overall center performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by net new center openings as well as increases in same-store sales.

Same-Store Sales. Same-store sales reflect the change in sales over a comparable 52-week period year over year from services performed and retail sales for the same-store base. We define the same-store base to include those centers open for at least 52 full weeks. If a center is closed for greater than six consecutive days, the center is deemed a closed center and is excluded from the calculation of same-store sales until it has been reopened for a continuous 52 full weeks. This measure highlights the performance of existing centers, while excluding the impact of new center openings and closures. We review same-store sales for corporate-owned centers as well as franchisee-owned centers. Same-store sales growth is driven by increases in the number of transactions and average transaction size.

EUROPEAN WAX CENTER, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share amounts)
		April 5, 2025				January 4, 2025
ASSETS
Current assets:
Cash and cash equivalents		$	58,326			$	49,725
Restricted cash			6,454				6,469
Accounts receivable, net			7,808				7,283
Inventory, net			18,593				19,070
Prepaid expenses and other current assets			4,127				5,292
Total current assets			95,308				87,839
Property and equipment, net			6,884				2,313
Operating lease right-of-use assets			3,476				3,313
Intangible assets, net			427,327				432,160
Goodwill			39,112				39,112
Deferred income taxes			139,858				140,315
Other non-current assets			1,830				2,015
Total assets		$	713,795			$	707,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	16,532			$	17,354
Long-term debt, current portion			4,000				4,000
Tax receivable agreement liability, current portion			9,353				9,353
Deferred revenue, current portion			4,005				4,149
Operating lease liabilities, current portion			1,229				1,255
Total current liabilities			35,119				36,111
Long-term debt, net			373,630				373,246
Tax receivable agreement liability, net of current portion			195,469				194,917
Deferred revenue, net of current portion			5,551				5,836
Operating lease liabilities, net of current portion			2,467				2,318
Deferred tax liability			738				738
Other long-term liabilities			2,309				2,309
Total liabilities			615,283				615,475
Commitments and contingencies
Stockholders’ equity:
Preferred stock ($0.00001 par value, 100,000,000 shares authorized, none issued and outstanding as of April 5, 2025 and January 4, 2025, respectively)			—				—
Class A common stock ($0.00001 par value, 600,000,000 shares authorized, 51,936,348 and 51,713,132 shares issued and 43,305,826 and 43,323,183 shares outstanding as of April 5, 2025 and January 4, 2025, respectively)			—				—
Class B common stock ($0.00001 par value, 60,000,000 shares authorized, 11,865,546 and 12,005,172 shares issued and outstanding as of April 5, 2025 and January 4, 2025, respectively)			—				—
Treasury stock, at cost 8,630,522 and 8,389,949 shares of Class A common stock as of April 5, 2025 and January 4, 2025, respectively			(81,212	)			(80,148	)
Additional paid-in capital			250,346				244,611
Accumulated deficit			(98,681	)			(100,416	)
Total stockholders’ equity attributable to European Wax Center, Inc.			70,453				64,047
Noncontrolling interests			28,059				27,545
Total stockholders’ equity			98,512				91,592
Total liabilities and stockholders’ equity		$	713,795			$	707,067

EUROPEAN WAX CENTER, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands)
	For the Thirteen Weeks Ended
	April 5, 2025				April 6, 2024
REVENUE
Product sales	$	28,871			$	29,498
Royalty fees		12,428				12,436
Marketing fees		7,203				7,096
Other revenue		2,925				2,844
Total revenue		51,427				51,874
OPERATING EXPENSES
Cost of revenue		13,276				13,524
Selling, general and administrative		15,340				13,466
Advertising		7,248				8,688
Depreciation and amortization		4,981				5,095
Gain on sale of center		—				(81	)
Total operating expenses		40,845				40,692
Income from operations		10,582				11,182
Interest expense, net		6,633				6,336
Other income		(2	)			(20	)
Income before income taxes		3,951				4,866
Income tax expense		1,381				1,212
NET INCOME	$	2,570			$	3,654
Less: net income attributable to noncontrolling interests		835				889
NET INCOME ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC.	$	1,735			$	2,765
Net income per share
Basic - Class A Common Stock	$	0.04			$	0.06
Diluted - Class A Common Stock	$	0.04			$	0.06
Weighted average shares outstanding
Basic - Class A Common Stock		43,300,933				48,555,134
Diluted - Class A Common Stock		43,421,246				48,633,413

EUROPEAN WAX CENTER, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
	For the Thirteen Weeks Ended
	April 5, 2025				April 6, 2024
Cash flows from operating activities:
Net income	$	2,570			$	3,654
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,981				5,095
Amortization of deferred financing costs		1,471				1,377
Provision for inventory obsolescence		—				(30	)
Provision for bad debts		73				9
Deferred income taxes		1,281				1,125
Remeasurement of tax receivable agreement liability		(2	)			(20	)
Gain on sale of center		—				(81	)
Equity compensation		2,564				1,382
Changes in assets and liabilities:
Accounts receivable		(600	)			1,035
Inventory, net		478				(1,537	)
Prepaid expenses and other assets		1,545				1,160
Accounts payable and accrued liabilities		(945	)			(1,184	)
Deferred revenue		(429	)			(1,029	)
Other long-term liabilities		(280	)			(232	)
Net cash provided by operating activities		12,707				10,724
Cash flows from investing activities:
Purchases of property and equipment		(660	)			(30	)
Cash received for sale of center		—				135
Net cash (used in) provided by investing activities		(660	)			105
Cash flows from financing activities:
Principal payments on long-term debt		(1,000	)			(1,000	)
Distributions to EWC Ventures LLC members		(1,228	)			(1,180	)
Repurchase of Class A common stock		(1,064	)			—
Taxes on vested restricted stock units paid by withholding shares		(159	)			(319	)
Dividend equivalents to holders of EWC Ventures units		(10	)			(687	)
Net cash used in financing activities		(3,461	)			(3,186	)
Net increase in cash, cash equivalents and restricted cash		8,586				7,643
Cash, cash equivalents and restricted cash, beginning of period		56,194				59,228
Cash, cash equivalents and restricted cash, end of period	$	64,780			$	66,871
Supplemental cash flow information:
Cash paid for interest	$	5,439			$	5,490
Cash paid for income taxes	$	143			$	40
Non-cash investing activities:
Property purchases included in accounts payable and accrued liabilities	$	89			$	—
Property purchases included in additional paid-in capital	$	3,968			$	—
Right-of-use assets obtained in exchange for operating lease obligations	$	446			$	592

Reconciliation of Net Income to Adjusted Net Income:

		For the Thirteen Weeks Ended												For the Year Ended
		April 5, 2025				April 6, 2024				January 4, 2025				January 4, 2025
(in thousands)
Net income		$	2,570			$	3,654			$	3,073			$	14,681
Share-based compensation(1)			2,564				1,382				945				5,150
Remeasurement of tax receivable agreement liability (2)			(2	)			(20	)			4,864				5,399
Gain on sale of center (3)			—				(81	)			—				(81	)
Gain from legal judgment proceeds (4)			—				(80	)			15				(724	)
Executive severance(5)			465				—				—				1,548
Reorganization costs (6)			160				—				140				630
Terminated debt offering costs(7)			—				—				(3	)			941
Tax effect of adjustments to net income (8)			(158	)			(118	)			(916	)			(1,930	)
Adjusted Net Income, as previously defined		$	5,599			$	4,737			$	8,118			$	25,614
Amortization of intangible assets (9)			4,834				4,834				4,834				19,335
Tax effect of adjustments to net income (8)			(962	)			(985	)			(1,092	)			(4,003	)
Adjusted Net Income, as now defined		$	9,471			$	8,586			$	11,860			$	40,946
(1) Represents non-cash equity-based compensation expense.
(2) Represents non-cash adjustments related to the remeasurement of our tax receivable agreement liability.
(3) Represents gain on the sale of a corporate-owned center.
(4) Represents the collection of cash proceeds from a legal judgment.
(5) Represents cash severance paid or payable to our former chief financial officer.
(6) Represents costs associated with the Company's return-to-office mandate.
(7) Represents costs related to a debt offering the Company was previously evaluating and subsequently decided to terminate.
(8) Represents the estimated income tax impact of non-GAAP adjustments computed by applying our estimated blended statutory tax rate to our share of the identified items and incorporating the effect of nondeductible and other rate impacting adjustments.
(9) Represents the amortization of franchisee relationships and reacquired rights.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA:

		For the Thirteen Weeks Ended								Trailing Twelve Months Ended
		April 5, 2025				April 6, 2024				April 5, 2025
(in thousands)
Net income		$	2,570			$	3,654			$	13,597
Interest expense, net			6,633				6,336				25,789
Income tax expense			1,381				1,212				2,359
Depreciation and amortization			4,981				5,095				20,166
EBITDA		$	15,565			$	16,297			$	61,911
Share-based compensation(1)			2,564				1,382				6,332
Remeasurement of tax receivable agreement liability(2)			(2	)			(20	)			5,416
Gain on sale of center(3)			—				(81	)			—
Gain from legal judgment proceeds(4)			—				(80	)			(644	)
Executive severance(5)			465				—				2,013
Reorganization costs(6)			160				—				790
Terminated debt offering costs(7)			—				—				941
Adjusted EBITDA		$	18,752			$	17,498			$	76,759
Total revenue		$	51,427			$	51,874			$	216,469
Net income margin			5.0	%			7.0	%			6.3	%
Adjusted EBITDA Margin			36.5	%			33.7	%			35.5	%
(1) Represents non-cash equity-based compensation expense.
(2) Represents non-cash adjustments related to the remeasurement of our tax receivable agreement liability.
(3) Represents gain on the sale of a corporate-owned center.
(4) Represents the collection of cash proceeds from a legal judgment.
(5) Represents cash severance paid or payable to our former chief financial officer.
(6) Represents costs associated with the Company's return-to-office mandate.
(7) Represents costs related to a debt offering the Company was previously evaluating and subsequently decided to terminate.

Reconciliation of Total Debt to Net Leverage Ratio:

		Trailing Twelve Months
		April 5, 2025
(in thousands)
Total debt		$	389,000
Less: Cash and cash equivalents			(58,326	)
Net Debt		$	330,674
Adjusted EBITDA			76,759
Net Leverage Ratio			4.3		x

Investor Contact
European Wax Center, Inc.
Bethany Johns
Bethany.Johns@myewc.com
469-270-6888

Media Contact
Zeno Group
Sophia Tortorella
sophia.tortorella@zenogroup.com
312-752-6851

FAQ

What were European Wax Center's (EWCZ) Q1 2025 earnings results?

EWCZ reported Q1 2025 system-wide sales of $225.9M (+2.1% YoY), total revenue of $51.4M (-0.9% YoY), and net income of $2.6M (-29.7% YoY). Adjusted EBITDA increased 7.2% to $18.8M.

How many centers does European Wax Center (EWCZ) operate as of Q1 2025?

European Wax Center operates 1,062 centers across 45 states, representing a 1.0% increase from 1,051 centers in the prior year period.

What is European Wax Center's (EWCZ) guidance for fiscal 2025?

EWCZ expects system-wide sales of $940-960M, total revenue of $210-214M, same-store sales growth of 0-2%, and Adjusted EBITDA of $69-71M for fiscal 2025.

What is European Wax Center's (EWCZ) net center growth outlook for 2025?

EWCZ expects 10-12 new center openings and 40-60 center closures in fiscal 2025, resulting in 28-50 net center closings.

How much cash does European Wax Center (EWCZ) have on its balance sheet?

As of Q1 2025, EWCZ had $58.3M in cash and cash equivalents, $6.5M in restricted cash, and $389.0M in borrowings outstanding under senior secured notes.