Loading...
01/10 16:56
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: while adjusted EBITDA and net income show growth, total revenue and unit closures raise concerns. The Q&A session reveals stable consumer behavior and regional performance, but management's reluctance to provide specific metrics and defer guidance introduces uncertainty. The company’s confidence in future growth and improved franchisee partnerships is positive, yet the lack of clear guidance and continued unit closures balance this optimism. Given the absence of a market cap, the overall sentiment remains neutral.
System-wide sales $238.2 million, a decrease of 0.8% year-over-year, primarily driven by the impact of closed centers.
Same-store sales 20 basis points growth year-over-year, reflecting stable transaction trends.
Adjusted EBITDA $20.2 million, an increase of 9.6% from $18.4 million in the prior year period, driven by cost discipline and operational efficiency.
Total revenue $54.2 million, a decrease of 2.2% year-over-year, primarily due to lower contributions from wholesale product and retail revenue as a percentage of system-wide sales.
Gross margin 73.3%, a modest increase due to a higher mix of royalty, marketing fees, and product margin improvements.
SG&A expenses $13 million, a decrease of $4.5 million year-over-year, driven by timing of payroll and benefits, professional fees, and marketing spend.
Advertising expense Decreased by $0.8 million year-over-year due to the timing of spend within the fiscal year.
Adjusted net income $10.7 million, an increase of 14.2% from $9.3 million in the prior year period, reflecting improved profitability.
Net interest expense $6.5 million, an increase from $6.3 million in the prior year.
Income tax expense $2 million, an increase from $0.8 million in the prior year.
Cash and cash equivalents $73.6 million at quarter end, reflecting a strong cash position.
Net leverage ratio 3.9x, or approximately 3.7x excluding $16.1 million in stock buybacks executed over the trailing 12 months.
New guest acquisition: Continued focus on improving new guest acquisition through enhanced data insights, regional marketing pilots, and a revamped influencer strategy. The influencer strategy showed a 75% improvement in efficiency, and a campaign delivered 75 million impressions with a 53% lift in unique website visitors.
Expansion plans: 12 gross openings expected in 2025, with 23 to 28 net center closures. The company aims to return to positive net center growth by the end of 2026, focusing on markets with strong demand and solid unit economics.
Operational excellence: Focus on improving 4-wall profitability for franchisees through enhanced in-center operations, training, and technology. A new COO is driving initiatives to elevate guest experience and improve profitability.
Franchisee support: Expanded in-center coaching and training resources, and introduced new franchisee reporting tools to improve guest frequency and operational performance.
Marketing optimization: Refined marketing tactics to eliminate underperforming strategies and focus on high-performing ones. Improved guest contactability via SMS and email, enabling personalized communication to drive engagement.
Data-driven decision-making: Enhanced data insights are being used to identify opportunities, refine processes, and improve traffic and sales performance.
New Guest Acquisition: The company is not seeing the levels of new guest growth desired, which is critical for sustainable traffic growth. This is attributed to an evolving macro environment and challenges in effectively targeting and attracting new guests.
Center Closures: The company expects 35 to 40 closures for the year, reflecting challenges in maintaining underperforming centers. While progress has been made, closures still pose a risk to overall network health and financial performance.
Guest Visit Frequency: Visit frequency among existing guests remains a significant growth opportunity, indicating a challenge in converting less frequent guests into high-frequency visitors.
Operational Challenges in Centers: There are gaps in training, infrastructure, and operational consistency across centers, which impact franchisee profitability and guest experience.
Economic and Macro Environment: The evolving macroeconomic environment is impacting new guest acquisition and overall traffic growth, posing a risk to revenue and profitability.
Supply Chain and Tariffs: While the company has taken steps to diversify sourcing and manage costs, tariffs and supply chain pressures remain a potential risk to maintaining EBITDA outlook.
Franchisee Engagement and Support: The need for enhanced franchisee engagement and operational support highlights challenges in ensuring consistent performance and reducing closure risks.
Full Year Financial Guidance: Reaffirmed financial guidance for fiscal 2025, including system-wide sales of $940 million to $950 million, same-store sales flat to up 1%, adjusted EBITDA of $69 million to $71 million, and full-year revenue of $205 million to $209 million.
Unit Expectations: Narrowed closure range to 35-40 centers for 2025, with 12 gross openings expected, resulting in 23-28 net center closures for the year.
New Guest Acquisition: Continued focus on improving new guest acquisition, with significant progress expected in 2026. Efforts include enhanced data insights, regional marketing pilots, and a revamped influencer strategy.
Marketing and Guest Engagement: Investments in data-driven marketing and personalized communication to improve guest retention and frequency. Enhanced reporting tools for franchisees to drive actionable insights and improve performance.
Operational Excellence: Focus on improving 4-wall profitability for franchisees through operational support, training, and technology. Comprehensive operational strategy for 2026 to enhance field support and franchisee engagement.
Development Plans for 2026: Refining development plans to achieve positive net center growth by year-end 2026. Prioritizing new centers in markets with strong demand and solid unit economics.
Share Repurchase Authorization: As of quarter end, we had $4.1 million remaining under our current $50 million share repurchase authorization. Our net leverage ratio at quarter end was 3.9x and would have been approximately 3.7x, excluding the $16.1 million in stock buybacks executed over the trailing 12 months, which includes $0.4 million in excise tax related to 2024 buybacks.
The earnings call presents a mixed picture: while adjusted EBITDA and net income show growth, total revenue and unit closures raise concerns. The Q&A session reveals stable consumer behavior and regional performance, but management's reluctance to provide specific metrics and defer guidance introduces uncertainty. The company’s confidence in future growth and improved franchisee partnerships is positive, yet the lack of clear guidance and continued unit closures balance this optimism. Given the absence of a market cap, the overall sentiment remains neutral.
The earnings call shows a mix of positives and negatives. Gross margin increased and adjusted net income rose by 5.6%, but SG&A expenses and net interest expenses also increased. The Q&A highlighted cautious optimism, with potential for growth and challenges in unit expansion and closures. Management's conservative guidance and lack of specifics on new unit maturity and closure pace add uncertainty. The lack of a market cap and specific partnership announcements further supports a neutral sentiment, indicating a likely stock price movement between -2% and 2% over the next two weeks.
The earnings call presents a mixed picture. Financial performance shows some positives, like increased adjusted EBITDA and gross margin, but also negatives, such as a slight revenue decline and increased SG&A expenses. The guidance remains stable, but the high number of expected center closures and lack of clear strategy for underperforming stores are concerns. Share repurchases are a positive, but not enough to offset other issues. The Q&A reveals uncertainties, particularly in dealing with franchisee challenges and cost pressures, which leads to a neutral sentiment.
The earnings call reveals several concerns: underperforming centers, rising costs due to tariffs, and economic uncertainties. Despite some positive financial metrics like gross margin improvement and adjusted net income growth, the guidance remains weak with expected closures and flat same-store sales. The Q&A section highlights management's avoidance of specifics on key issues, and a lack of clear strategy on tariffs. Although stock buybacks are positive, the overall outlook appears cautious, leading to a negative sentiment rating.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
