The following is a summary of the European Wax Center, Inc. (EWCZ) Q1 2024 Earnings Call Transcript:
Financial Performance:
European Wax Center reported stable customer frequency and spending for Q1 2024, center count rose 7.5% to 1,051, in line with expectations.
System-wide sales and total revenue increased by 1.3% and 4% respectively, whereas same-store sales were down by 1.2% due to weather and Easter-related center closures.
Profit margins remained strong with a significant increase in the cash position during the quarter.
The company's board authorised a $50 million share repurchase program.
Despite increasing expenses due to IPO grants, professional fees, and technology costs, trends indicate improvement in gross margins for the rest of the year.
Business Progress:
European Wax Center initiated programs for increasing ticket frequency and attracting both new and existing customers.
There is a continued focus on two growth vectors - expanding new centers and driving-in center sales; new strategies for 2024 laid out.
Significant operational initiatives include investment in pilot centers, launch of new brow tint formula, and plans to expand laser hair removal pilot.
The company is focusing on franchisee diversification and strengthening relationships with over 370 locations in the pipeline.
Plans are underway to increase the revenue for franchisees through new guest acquisition, broadening Wax Pass penetration and increasing local marketing efforts.
The company aims to achieve high single-digit comps for mature centers and expects to open 75-80 new centers in 2024 with more emphasis to the second half of the year.
More details: European Wax Center IR
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