European Wax Center Q2 Earnings Beat Estimates, Same-Store Sales Rise 0.3%

European Wax Center, Inc. (EWCZ) posted mixed second-quarter 2025 results, wherein the bottom line surpassed the Zacks Consensus Estimate while the top line missed. Earnings per share (EPS) of 27 cents surpassed the Zacks Consensus Estimate of 19 cents. Also, the bottom line increased from 12 cents a share in the year-ago quarter.

Total revenues of $55.9 million fell 6.6% from the prior-year quarter and came below the consensus estimate of $57 million. Same-store sales jumped 0.3% in the reported quarter. System-wide sales of $257.6 million dipped 1% from $260.2 million seen in the year-ago period, mainly led by a decrease in same-day services and retail sales, partly offset by a rise in cash collected from wax pass sales.

European Wax Center, Inc. Price, Consensus and EPS Surprise

European Wax Center, Inc. price-consensus-eps-surprise-chart | European Wax Center, Inc. Quote

Two franchisees were opened while five centers were shut. The company ended the quarter with 1,059 centers, flat year over year.

Selling, general and administrative expenses (SG&A) of $14.5 million jumped 13.2% from the prior-year period. SG&A, as a percentage of total revenues, expanded 430 basis points (bps) to 25.9%, mainly driven by lower revenues, higher payroll and benefits expense, and a non-recurring gain from legal judgment proceeds in the year-earlier period.

Adjusted EBITDA of $21.6 million climbed 4.7% from the prior-year period while adjusted EBITDA margin rose 420 bps to 38.7%.

European Wax Center’s Other Financials

EWCZ ended second-quarter fiscal 2025 with cash and cash equivalents of $63.9 million, net long-term debt of $374 million and a total shareholders' equity of $76.5 million, excluding non-controlling interests of $29.3 million. The company provided $27.9 million of net cash from operating activities as of July 5, 2025. Inventory remained almost flat year over year as of July 5, 2025.

The company repurchased nearly 0.2 million shares of its Class A common stock during the year-to-date period for $1.1 million, bringing cumulative repurchases under its existing $50 million authorization to $41.2 million.

What EWCZ’s Expects for 2025?

For 2025, European Wax Center now projects system-wide sales in the bracket of $940-$950 million compared with the earlier anticipation of $940-$960 million. Total revenues are now likely to be $205-$209 million compared with $210-$214 million expected earlier, while same-store sales are now forecast to be 0-1% compared with the prior expectation of 0-2%.

EWCZ continues to expect adjusted net income of $31-$33 million and adjusted EBITDA of $69-$71 million.

For 2025, management still estimates franchisees to open 10-12 new centers and shutter 40-60 centers, translating to 28-50 net center closings. EWCZ expects 15-16 net center closings in the third quarter. As of Aug. 12, 2025, no centers have been opened while three have been closed.

Shares of the Zacks Rank #3 (Hold) company have lost 8.3% in the past three months against the industry's 33.1% growth.

Stocks to Consider in the Consumer Staples Space

Nomad Foods (NOMD), which manufactures frozen foods, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year EPS indicates growth of 10.4% from the year-ago number.

Mondelez International (MDLZ), which is a leader in the snack food industry, currently carries a Zacks Rank #2 (Buy).

MDLZ delivered a trailing four-quarter earnings surprise of 9%, on average. The Zacks Consensus Estimate for MDLZ’s current financial-year sales indicates growth of 5.4% from the year-ago number.

Ingredion Incorporated (INGR), which is a provider of ingredient solutions specialized in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank of 2.

The Zacks Consensus Estimate for INGR’s current financial-year EPS is expected to rise 6.8% from the corresponding year-ago reported figure. INGR delivered a trailing four-quarter earnings surprise of 11.1%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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