European Wax Center, Inc. (NASDAQ: EWCZ) has reported its financial results for the second quarter of fiscal year 2024, revealing a mix of growth and challenges. The company saw a 5.6% increase in net new centers, bringing the total to 1,059 in 45 states. System-wide sales reached $260.2 million, marking a 2.3% increase, while total revenue grew by 1.3% to $59.9 million. Same-store sales also experienced a 1.6% increase. GAAP net income rose by 7.3% to $6.0 million, and adjusted net income increased by 4.0% to $7.3 million. However, adjusted EBITDA decreased by 2.6% to $20.6 million.
The company's year-to-date results through the second quarter of fiscal 2024 versus fiscal 2023 also showed positive growth. Franchisees opened 15 net new centers in the first half of fiscal 2024, contributing to a 1.9% increase in system-wide sales to $481.5 million and a 2.5% increase in total revenue to $111.7 million. Same-store sales increased by 0.3%.
The balance sheet and cash flow position at the end of the quarter indicated the company held $55.7 million in cash and cash equivalents, with $6.5 million in restricted cash and $392.0 million in borrowings outstanding under its senior secured notes. Notably, the company repurchased $10.0 million of its class A common stock during the period, and net cash provided by operating activities totaled $14.4 million.
Looking ahead, the company has adjusted its fiscal 2024 outlook. It now expects new center openings, net to range from 27 to 32, compared to the previous outlook of 75 to 80. System-wide sales are forecasted to be between $930 million and $950 million, down from the previous estimate of $1,000 million to $1,025 million. Similarly, the total revenue outlook for fiscal 2024 has been revised to $216 million to $221 million, down from $225 million to $232 million. The adjusted net income and adjusted EBITDA outlooks have also been adjusted downward.
The company's CEO, David Berg, acknowledged the challenges posed by the ongoing macroeconomic environment, expressing a commitment to reinvigorating new guest growth and retention. He emphasized the interdependence of financial performance and new center productivity, outlining a focused action plan to drive transactions.
Following these announcements, the company's shares moved 3.0%, and are now trading at a price of $6.93. Check out the company's full 8-K submission here.
