The following is a summary of the European Wax Center, Inc. (EWCZ) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 financial performance was met as per revised expectations with a total revenue of $55.4 million, slightly down year-over-year by half a percentage point.

• System-wide sales remained relatively flat at $240.2 million compared to $240.7 million in the same quarter last year.

• Gross margin improved by 110 basis points year-over-year to 72.9%.

• Adjusted EBITDA of $18.4 million decreased by 4.4% from $19.3 million in the prior year period.

Business Progress:

• Due to challenges experienced with laser hair removal pilot, resources were reallocated towards the core waxing business, signaling a prioritized focus to enhance the traditional service offerings.

• Established a partnership with Dolabra Digital to overhaul marketing strategies aimed at improving guest acquisition and engagement.

• Implemented organizational changes and grew teams to drive performance in franchise operations and commercial functions.

Opportunities:

• The partnership with Dolabra Digital is expected to streamline marketing efforts, potentially leading to a more efficient allocation of resources and heightened effectiveness in attracting and retaining guests.

• Revamped guest acquisition strategies present an opportunity for market expansion and heightened brand engagement.

Risks:

• Anticipated potential center closings that may exceed the number of new openings in 2025 indicate a risk of net negative growth for the future, overshadowing the projections for new unit expansions.

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