European Wax Center, Inc. Reports Fiscal Year 2025 Results; Announces Definitive Agreement to Go Private

Key Financial Highlights for Fiscal Year 2025

• Total Centers: 1,047 centers operating in 44 states, a decrease of 1.9% compared to 1,067 centers in the prior year.
• System-wide Sales: \$947.3 million, a slight decrease of 0.4% year-over-year.
• Total Revenue: \$206.6 million, down by 4.7% from \$216.9 million in fiscal 2024.
• Same-store Sales: Increased by 0.2% year-over-year.
• GAAP Net Income: \$11.9 million, a decrease of 19.2% from \$14.7 million last year.
• Adjusted Net Income: \$36.2 million, down by 11.6% from \$40.9 million in fiscal 2024.
• Adjusted EBITDA: \$73.3 million, a decrease of 3.0% from \$75.5 million in the prior year. Adjusted EBITDA margin improved to 35.5% from 34.8%.
• Share Repurchases: Approximately 1.4 million shares of Class A Common Stock repurchased for \$5.7 million, bringing cumulative repurchases to \$45.9 million under the current \$50 million authorization.
• Cash Position: \$76.1 million in cash and cash equivalents, plus \$6.4 million in restricted cash.
• Debt: \$386.0 million in borrowings under senior secured notes. No amounts drawn under revolving credit facility.
• Net Leverage Ratio: 4.2x based on trailing twelve months Adjusted EBITDA.

Fourth Quarter 2025 Performance

• Center Openings/Closures: Franchisees opened 1 and closed 7 centers, ending the quarter at 1,047 centers.
• System-wide Sales: \$225.6 million, down 1.6% from \$229.3 million in Q4 2024.
• Total Revenue: \$45.1 million, a decrease of 9.3% from \$49.7 million in Q4 2024.
• Same-store Sales: Decreased by 0.1% in the quarter.
• SG&A Expenses: \$15.5 million, up by 4.3%. SG&A as a percentage of revenue increased to 34.3% from 29.8%, driven by investments in headcount for long-term growth and one-time franchisee support.
• Interest Expense: \$6.6 million, up from \$6.4 million in Q4 2024.
• Net Loss: \$1.5 million, compared to net income of \$3.1 million in Q4 2024.
• Adjusted Net Income: \$4.2 million, down 64.4% from \$11.9 million.
• Adjusted EBITDA: \$12.7 million, down 33.1% from \$19.0 million. Adjusted EBITDA margin fell to 28.1% from 38.1%.

Balance Sheet and Cash Flow

• Cash and Liquidity: \$76.1 million in cash and cash equivalents; \$6.4 million in restricted cash.
• Outstanding Debt: \$386 million under senior secured notes.
• Operating Cash Flow: \$7.8 million for the quarter; \$53.0 million for the year.

Important Shareholder and Price-Sensitive Updates

• Going Private Transaction: On February 10, 2026, European Wax Center announced a definitive agreement to be taken private by General Atlantic, a leading global investor, in an all-cash transaction. Upon completion, European Wax Center’s Class A common stock will no longer be publicly listed, and the company will become privately held.
• No Guidance or Conference Call: In light of the pending transaction, the company will not provide financial guidance for fiscal 2026 or host a conference call for this quarter.
• Share Repurchase Program: The ongoing share repurchase program has nearly reached its \$50 million authorization limit.
• Tax Rate Increase: The effective tax rate for the year increased to 28.5% from 13.0%, primarily due to additional investment in EWC Ventures LLC and higher state/local taxes.
• Center Closures: Net closures outpaced openings, with 11 centers opened and 31 closed during fiscal 2025, signaling possible challenges in franchisee performance and market saturation.

Operational Overview

European Wax Center remains the leading franchisor and operator of out-of-home waxing services in the United States, performing approximately 23 million services annually. The company continues to focus on delivering a premium guest experience through its proprietary Comfort Wax®, innovative product lines, and highly trained wax specialists. Despite challenges in center growth and revenues, EWCZ maintains a strong brand presence and is certified as a Great Place to Work®.

Risks and Forward-Looking Statements

This report includes forward-looking statements regarding European Wax Center’s strategy, operational and financial outlook, capital allocation, and business risks. Risks include franchisee performance, market competition, social media impact, management and employee retention, supply chain disruptions, regulatory compliance, litigation, seasonality, global crises, inflation, and rising interest rates. Investors should review the company’s filings for further risk details.

Non-GAAP Financial Measures

European Wax Center provides non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Net Leverage Ratio, which management believes are useful for assessing core operating performance. These measures exclude certain non-cash and one-time items, such as share-based compensation, amortization of intangible assets, and remeasurement of tax receivable agreement liabilities. Reconciliations to GAAP measures are included in the report.

Conclusion

The fiscal year 2025 results reflect modest declines in system-wide sales and revenue, with significant declines in net income and Adjusted Net Income, and notable contraction in center count. The most price-sensitive and impactful news for shareholders is the pending transaction to take European Wax Center private, which will result in the delisting of its Class A common stock and a transition to private ownership. Investors should be aware that this event is likely to materially affect share values and trading activity.

Disclaimer: This article is intended for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. All financial information is based on the company’s official filings and press release. Investors are advised to review European Wax Center’s SEC filings and consult with their financial advisors before making any investment decisions. The company has announced a definitive agreement to be taken private; upon completion, public trading of its shares will cease.

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