EWCZ Stock Forecast & Price Target

European Wax Center Inc. has demonstrated a positive trend in its financial metrics, with SG&A expenses as a percentage of total revenue improving to 28.5%, outperforming both consensus expectations and internal estimates. The company's gross margin increased by 50 basis points year-over-year to 32.9%, benefiting from optimized promotional events, indicating a strong operational focus despite challenges in digital penetration. Additionally, the partnership with Dolabra Digital for enhanced guest acquisition and engagement strategies suggests a forward-looking approach that is likely to support revenue growth and margin enhancements in the future.

European Wax Center has encountered a concerning decline in net sales, reporting a year-over-year drop of 9.4% to $5.397 billion, which reflects a wider issue of revenue stagnation across the sector. Additionally, projections for fiscal year 2025 indicate a further contraction of 5%-7% in net sales, contrasting sharply with prior expectations for flat revenue growth. The company also experienced a decrease in cash reserves, with cash and cash equivalents falling to $134 million from $183 million in the previous year, underscoring potential operational vulnerabilities.