European Wax Center Reports 4.7% Revenue Decline and 19.2% Drop in Net Income for Fiscal Year Ending January 3, 2026

European Wax Center, Inc. reported a decline in financial performance for the fiscal year ending January 3, 2026, with total revenue decreasing by 4.7% to $206.6 million, down from $216.9 million in the previous year. The company attributed this decline to reduced product sales, royalty fees, and other revenue streams. Specifically, product sales fell by 7.3% to $112.6 million, primarily due to decreased transactions at existing centers and the removal of a surcharge that had been implemented during the COVID-19 pandemic. Royalty fees also saw a slight decrease of 1.3%, totaling $52.4 million, impacted by the closure of 31 centers during the reporting period.

In terms of profitability, European Wax Center's consolidated net income decreased by 19.2% to $11.9 million, compared to $14.7 million in the prior year. The company reported an adjusted EBITDA of $73.3 million, down from $75.5 million, reflecting a 2.9% decline. The decrease in net income was influenced by increased payroll and benefits expenses associated with the new executive leadership team, as well as higher interest expenses. The company’s interest expense rose by 3.2% to $26.3 million, primarily due to a decrease in interest income from short-term investments.

Operationally, the number of centers decreased to 1,047 from 1,067, with 11 new centers opened but offset by 31 closures. The company continues to focus on improving existing center performance and has implemented a new executive leadership team to drive this initiative. The average unit volume (AUV) for the year was reported at $896, down from $915, indicating challenges in maintaining sales levels across existing locations.

Looking ahead, European Wax Center has entered into a Merger Agreement with Glow Midco, LLC, an affiliate of its largest stockholder, General Atlantic. This agreement, approved by the company's board, proposes that each share of Class A common stock will be converted into cash at a rate of $5.80. The merger is subject to various conditions, including stockholder approval, and is expected to be completed by August 9, 2026. The company remains optimistic about its growth potential, particularly in existing markets, and plans to continue investing in initiatives aimed at enhancing guest experiences and driving profitability.