EWCZ Stock Forecast & Price Target

The European Wax Center reported a decrease in SG&A expenses to 28.5% of total revenue, which is better than prior consensus expectations, reflecting effective cost management across its stores, marketing, and supply chain. Additionally, the company's gross margin improved by 50 basis points year-over-year to 32.9%, attributed to optimized promotional events and strategic positioning, albeit slightly below market expectations. Furthermore, the anticipated partnership with Dolabra Digital aimed at enhancing guest acquisition and engagement, along with ongoing efforts to improve customer experience, positions the company favorably for future topline growth and margin enhancement.

European Wax Center Inc. is facing a questionable financial outlook as evidenced by a projected net sales decline of 5%-7% year-over-year for FY25, alongside a notable 9.4% decrease in net sales to $5.175 billion. The company also reported a drop in cash and cash equivalents from $183 million to $134 million year-over-year, indicating potential liquidity concerns. Additionally, the adjusted EBITDA margin fell to 32.0%, reflecting a 220 basis point decline, which may signal diminishing profitability amidst ongoing challenges in customer engagement and transaction volume at mature centers.