European Wax Center, Inc. has recently released its annual report, revealing a comprehensive overview of its financial performance and operations. The company, headquartered in Plano, Texas, operates as the largest and fastest-growing franchisor and operator of out-of-home waxing services in the United States, with a leading portfolio of centers operating in 1,044 locations across 45 states as of January 6, 2024. Of these locations, 1,038 are franchised centers operated by franchisees and six are corporate-owned centers. The brand offers body and facial waxing services, along with pre* and post-service products, and has become the category-defining brand within the rapidly growing OOH waxing market.
In the 10-K report, European Wax Center provided insights into its financial condition and results of operations. The company reported over 23 million waxing services in 2023, generating $955 million in system-wide sales, compared to over 22 million waxing services in 2022, which generated $899 million of system-wide sales. The company's asset-light franchise platform delivers significant cash flow generation and resilience through economic cycles, with mature centers generating annual cash-on-cash returns in excess of 50%.
European Wax Center outlined its growth strategy, emphasizing plans to open new franchised centers and increase system-wide sales in existing centers, while leveraging corporate infrastructure to expand profit margins and generate robust free cash flow. The company's center count grew 11% during fiscal year 2023 and has grown each year since 2010. It also highlighted a significant whitespace opportunity of more than 3,000 locations for its standard center format across the United States.
The 10-K report also presented key business metrics, including the number of centers, system-wide sales, same-store sales, new center openings, average unit volume (AUV), and Wax Pass utilization. For the year ended January 6, 2024, European Wax Center reported 1,044 system-wide centers, $955,045,000 in system-wide sales, a 2.9% same-store sales growth, 100 new center openings, and an AUV of $961.
The report also discussed factors impacting the company's financial results, such as new center openings, system-wide sales growth, overall economic trends, and guest preferences and demands. European Wax Center highlighted the recurring nature of the OOH waxing market and its ability to maintain appeal to existing guests and attract new guests based on compelling service offerings.
Following these announcements, the company's shares moved 10.4%, and are now trading at a price of $14.46. Check out the company's full 10-K submission here.
