European Wax Center’s second quarter saw a positive market reaction despite a year-over-year sales decline and a revenue miss versus Wall Street expectations. Management pointed to early signs of stabilization in guest transaction trends and highlighted a disciplined approach to cost control and operational efficiency. CEO Chris Morris noted, “Our strategies are beginning to take hold,” referencing improvements in visit frequency among existing guests and enhanced marketing efficiency. The company also credited a test-and-learn approach and increased franchisee engagement as supporting factors.

Is now the time to buy EWCZ? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From European Wax Center’s Q2 Earnings Call

• Randal J. Konik (Jefferies) asked about the impact of the new grand opening playbook on center ramp-up. CEO Chris Morris said recent openings are performing above expectations, attributing gains to stricter operating standards and refined local marketing tactics.
• Scot Ciccarelli (Truist) questioned whether in-center execution is changing or if focus remains on marketing. Morris responded that both areas are being addressed, noting that operational and marketing improvements are jointly driving frequency among existing guests.
• Dana Lauren Telsey (Telsey Advisory Group) asked about regional performance and new product acceptance. Morris acknowledged continued West Coast challenges but cited improvements in Texas, Florida, and New York, and confirmed "pleased" acceptance of new products with Wax Pass sales up nearly 2%.
• Jonathan Robert Komp (Baird) probed the rationale for conservative second-half guidance despite recent transaction momentum. CFO Tom Kim said the company is tempering expectations, especially for new guest acquisition, to ensure it remains within its revised outlook.
• John Edward Heinbockel (Guggenheim) asked about accelerating the maturity curve for new centers and labor model efficiency. Morris said faster ramping is a focus but remains unproven, with volume growth seen as the main lever for labor margin improvement.

Catalysts in Upcoming Quarters

In the coming quarters, our team will closely monitor (1) the pace of transaction growth and sustained improvement in guest acquisition, (2) the effect of enhanced franchisee support and new executive leadership on operational execution and profitability, and (3) progress towards stabilizing and reopening centers, especially in challenging markets like the West Coast. We will also track how marketing and data analytics investments translate into stronger unit economics and network health.

European Wax Center currently trades at $4.63, up from $4.42 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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