European Wax Center, Inc. Reports Third Quarter Fiscal 2024 Financial Results
European Wax Center, Inc. (NASDAQ: EWCZ), the leading franchisor and operator of out-of-home waxing services in the United States, has announced its financial results for the third quarter of fiscal year 2024, which ended on October 5, 2024.
Key Financial Metrics
| Metric | Q3 FY2024 | Q3 FY2023 | YoY Change |
|---|---|---|---|
| Total Revenue | $55.4M | $55.7M | -0.5% |
| GAAP Net Income | $2.0M | $4.1M | -50.7% |
| Adjusted Net Income | $5.5M | $6.0M | -8.3% |
| Adjusted EBITDA | $18.4M | $19.3M | -4.4% |
European Wax Center's revenues and adjusted earnings slightly missed expectations, with a marginal 0.5% year-over-year decrease in total revenue. The company faced a significant decrease in GAAP net income, highlighting potential challenges in managing operating expenses and market conditions.
Revenue Performance by Segment
| Segment | Q3 FY2024 Revenue | Comments |
|---|---|---|
| System-wide Sales | $240.2M | Decreased 0.2% YoY from $240.7M |
| Same-store Sales | -0.5% | Reflects challenges with consistent growth |
The company's system-wide sales and same-store sales both saw slight declines, indicating stabilization challenges across its operational centers.
Operational Highlights
- Franchisees opened 12 new centers but closed 7, ending the quarter with 1,064 centers, a 3.7% increase year-over-year.
- Selling, general, and administrative expenses increased 21.6% due to factors like executive severance and return-to-office mandates.
Comments from Company Officers
David Berg, Executive Chairman and CEO of European Wax Center, emphasized the alignment of the results with revised expectations, focusing on strategies for growth and market adaptation. He highlighted initiatives geared towards enhancing unit economics and anticipating long-term value for stakeholders.
Dividends and Share Repurchase Program
- European Wax Center repurchased $20.1 million of its Class A Common Stock during the quarter, reaching total repurchases of $30.1 million under its $50 million authorization.
Forward Guidance
The company reiterated its fiscal 2024 financial outlook but updated its net new center guidance. The revised outlook anticipates 17 to 22 net new center openings, reduced from a previous range of 27 to 32.
Stock Price Movement
Post-earnings release, European Wax Center's stock experienced a decline of approximately 3.26%, reflecting investor reactions to the financial performance and adjusted forecasts.
Overall, European Wax Center continues to navigate the challenging market environment with a focus on steady operational and financial improvements.
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