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Apr 01, 2023
European Wax Center Q1 2023 Earnings Report
European Wax Center reported solid first quarter performance driven by unit growth and in-center sales growth, while reiterating fiscal year 2023 outlook.
Key Takeaways
European Wax Center reported a solid first quarter with a 9.8% increase in total revenue to $49.9 million and system-wide sales growth of 5.5%. The company opened 34 net new centers, representing a 12% year-over-year growth. Despite the revenue increase, the company reported a GAAP net loss of $1.1 million, but adjusted EBITDA increased by 7.5% to $16.3 million.
Net new centers increased by 11.9% to a total of 978 centers across 45 states.
System-wide sales increased by 5.5% to $218.4 million.
Total revenue increased by 9.8% to $49.9 million.
Same-store sales increased by 4.5%.
Revenue by Segment
Forward Guidance
The Company reiterates its previous outlook for fiscal year 2023.
Positive Outlook
- New Center Openings, Net: 95 to 100
- System-Wide Sales: $965 million to $990 million
- Total Revenue: $222 million to $229 million
- Same-Store Sales: Mid-Single Digits
- Adjusted Net Income: $22 million to $24.5 million
Challenges Ahead
- Fiscal 2022 and Fiscal 2023 each include a 53rd week in the fourth quarter.
- The Company estimates the 53rd week contribution to the top and bottom line is worth approximately one half of an average fourth quarter week.
- The Company's current outlook assumes no meaningful change in consumer behavior driven by inflationary pressures or the COVID-19 pandemic
- The Company's current outlook assumes no further impacts from incremental tightening in the labor market beyond what we see today.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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