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Sep 24, 2022
European Wax Center Q3 2022 Earnings Report
European Wax Center's Q3 2022 performance reflected strength and resilience amidst a dynamic macroeconomic backdrop, driven by marketing initiatives and continued demand from franchisees.
Key Takeaways
European Wax Center, Inc. reported a 7.3% increase in system-wide sales, reaching $235.2 million, and a 12.3% increase in total revenue to $55.0 million for the third quarter of fiscal 2022. The company's net income was $5.3 million, and Adjusted EBITDA reached $18.6 million, a 12.6% increase from the prior year period. They also raised full year expectations for new center openings and announced a $40 million share repurchase program.
System-wide sales increased by 7.3% to $235.2 million compared to the prior year period.
Total revenue increased by 12.3% to $55.0 million compared to the prior year period.
The company opened 18 net new centers, bringing the total to 911 centers, a 9.4% increase year-over-year.
Net income was $5.3 million, a significant increase from the net loss of $9.3 million in the prior year period.
Revenue by Segment
Forward Guidance
European Wax Center provided its fiscal year 2022 outlook, including estimates for new center openings, system-wide sales, total revenue, same-store sales, adjusted net income and adjusted EBITDA.
Positive Outlook
- New Center Openings, Net: 88 to 90
- System-Wide Sales: $885 million to $895 million
- Total Revenue: $202 million to $205 million
- Same-Store Sales: Approximately 9.5%
- Adjusted EBITDA: $70 million to $71 million
Challenges Ahead
- Fiscal 2022 guidance includes a 53rd week in the fourth quarter.
- The Company estimates its contribution to the top and bottom line will be worth approximately one half of an average fourth quarter week.
- The Company's outlook assumes no meaningful change from today in consumer behavior driven by inflationary pressures or the COVID-19 pandemic
- The Company's 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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