European Wax Center Reports Revenue Decline to $51.4 Million, Net Income Down 29.7%

European Wax Center, Inc. reported its financial results for the thirteen weeks ended April 5, 2025, revealing a total revenue of $51.4 million, a decrease of 0.9% compared to $51.9 million in the same period last year. The decline in revenue was primarily attributed to a decrease in transactions at existing centers, although this was partially offset by the addition of 11 new centers during the period. The company’s net income for the quarter was $2.6 million, down 29.7% from $3.7 million in the prior year, with net income attributable to European Wax Center, Inc. shareholders at $1.7 million, compared to $2.8 million a year earlier.

Operating expenses increased slightly to $40.8 million from $40.7 million, driven by a 13.9% rise in selling, general, and administrative expenses, which totaled $15.3 million. This increase was largely due to higher payroll and benefits expenses, including a significant rise in equity-based compensation. Conversely, advertising expenses decreased by 16.6% to $7.2 million as the company optimized its marketing spending. The cost of revenue also saw a slight decline, falling to $13.3 million from $13.5 million, reflecting the overall decrease in product sales.

In terms of operational metrics, European Wax Center operated 1,062 locations across 45 states as of April 5, 2025, an increase from 1,051 locations a year prior. The company reported system-wide sales of $225.9 million, up from $221.4 million, with same-store sales increasing by 0.7%. However, the company experienced a net loss of five centers during the quarter, which was a shift from the net gain of seven centers in the previous year. The total number of shares outstanding as of May 9, 2025, was 43,339,566 for Class A and 11,865,546 for Class B common stock.

Looking ahead, European Wax Center's management expressed cautious optimism regarding future growth, emphasizing a focus on stabilizing existing locations and enhancing profitability. The company plans to develop a more data-driven marketing strategy and improve its service infrastructure to support franchisee success. However, management acknowledged that many franchisees have paused new center openings as they work to realign their operations. The outlook remains uncertain due to fluctuating consumer demand and economic conditions, with expectations that closures may offset new openings in the near term.

The company continues to navigate challenges related to its supply chain and labor market, particularly in recruiting and retaining qualified wax specialists. European Wax Center remains committed to its growth strategy, which includes expanding its franchise network and enhancing the guest experience through technology and service improvements. The company reported cash and cash equivalents of $58.3 million as of April 5, 2025, indicating a solid liquidity position to support its ongoing operations and growth initiatives.