EWCZ Stock Forecast & Price Target

European Wax Center Inc. demonstrated effective management of selling, general and administrative (SG&A) expenses, reporting a decrease to 28.5% of total revenue, which was better than both consensus expectations and internal estimates. Additionally, the company's gross margin improved by 50 basis points year-over-year to 32.9%, primarily due to optimized promotional strategies and reduced digital sales penetration. Strategic partnerships and enhanced customer engagement initiatives are expected to further bolster top-line growth and margin improvements, contributing to a positive outlook for the company's financial performance.

European Wax Center Inc. is facing significant challenges as it anticipates a contraction in net sales of 5%-7% year-over-year for FY25, contrasting with prior expectations of minimal revenue growth. In the fourth quarter, the company's total revenue fell by 9.4% year-over-year to $5.397 billion, resulting in a decline in the adjusted EBITDA margin to 32.0%, highlighting ongoing operational difficulties. Furthermore, with a reduction in cash and cash equivalents from $183 million to $134 million over the past year, the company’s financial stability appears weakened, raising concerns about its ability to navigate upcoming market challenges.