10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 5, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40714

EUROPEAN WAX CENTER, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	86-3150064
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5830 Granite Parkway, 3rd Floor Plano, Texas	75024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (469) 264-8123

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Class A common stock, par value $0.00001 per share

     EWCZ

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2025, the registrant had 43,339,566 and 11,865,546 shares of Class A and Class B common stock, respectively, $0.00001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets as of April 5, 2025 and January 4, 2025	1
	Condensed Consolidated Statements of Operations for the 13 weeks ended April 5, 2025 and April 6, 2024	2
	Condensed Consolidated Statements of Cash Flows for the 13 weeks ended April 5, 2025 and April 6, 2024	3
	Condensed Consolidated Statements of Stockholders' Equity for the 13 weeks ended April 5, 2025 and April 6, 2024	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25

PART II.	OTHER INFORMATION	26

Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Form 10-Q including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. Words including “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or “would,” or, in each case, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Some of the key factors that could cause actual results to differ from our expectations include, but are not limited to, the following risks related to our business: the operational and financial results of the Company’s franchisees; the ability of the Company’s franchisees to enter new markets, select appropriate sites for new centers or open new centers; the effectiveness of the Company’s marketing and advertising programs and the active participation of its franchisees in enhancing the value of its brand; the failure of its franchisees to participate in and comply with its agreements, business model and policies; the Company’s and its franchisees’ ability to attract and retain guests; the effect of social media on the Company’s reputation; the Company’s ability to compete with other industry participants and respond to market trends and changes in consumer preferences; the effect of the Company’s planned growth on its management, employees, information systems and internal controls; the Company’s ability to retain and effectively respond to a loss of key executives; recruitment efforts; a significant failure, interruptions or security breach of the Company’s computer systems or information technology; the Company and its franchisees’ ability to attract, train, and retain talented wax specialists and managers; changes in the availability or cost of labor; the Company’s ability to retain its franchisees and to maintain the quality of existing franchisees; failure of the Company’s franchisees to implement business development plans; the ability of the Company’s limited key suppliers, including international suppliers, and distribution centers to deliver their products; changes in supply costs and decreases in the Company’s product sourcing revenue, including changes due to the imposition of tariffs; the Company’s ability to adequately protect its intellectual property; the Company’s substantial indebtedness; the impact of paying some of the Company’s pre-IPO owners for certain tax benefits the Company may claim; changes in general economic and business conditions, including changes due to tariff policy and geopolitical tensions; the Company’s and its franchisees’ ability to comply with existing and future health, employment and other governmental regulations; complaints or litigation that may adversely affect the Company’s business and reputation; the seasonality of the Company’s business resulting in fluctuations in its results of operations; the impact of global crises on the Company’s operations and financial performance; the impact of inflation and rising interest rates on the Company’s business; the Company’s access to sources of liquidity and capital to finance its continued operations and growth strategy and the other important factors discussed under the caption “Risk Factors” under Item 1A in the Company’s Annual Report on Form 10-K for the year ended January 4, 2025, filed with the Securities and Exchange Commissions (the “SEC”) on March 11, 2025.

We caution investors, potential investors and others not to place undue reliance on the forward-looking statements contained in this Form 10-Q. You are encouraged to read any further disclosures we may make in our future reports to the SEC, accessible on the SEC’s website at www.sec.gov, Investors Relations section of the Company’s website at www.waxcenter.com, or otherwise. Our website and information included in or linked to our website are not part of this Form 10-Q.

These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this Form 10-Q. Any forward-looking statement that the Company makes in this Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

EUROPEAN WAX CENTER, INC. and Subsidiaries

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	April 5, 2025			January 4, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	58,326		$	49,725
Restricted cash		6,454			6,469
Accounts receivable, net		7,808			7,283
Inventory, net		18,593			19,070
Prepaid expenses and other current assets		4,127			5,292
Total current assets		95,308			87,839
Property and equipment, net		6,884			2,313
Operating lease right-of-use assets		3,476			3,313
Intangible assets, net		427,327			432,160
Goodwill		39,112			39,112
Deferred income taxes		139,858			140,315
Other non-current assets		1,830			2,015
Total assets	$	713,795		$	707,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	16,532		$	17,354
Long-term debt, current portion		4,000			4,000
Tax receivable agreement liability, current portion		9,353			9,353
Deferred revenue, current portion		4,005			4,149
Operating lease liabilities, current portion		1,229			1,255
Total current liabilities		35,119			36,111
Long-term debt, net		373,630			373,246
Tax receivable agreement liability, net of current portion		195,469			194,917
Deferred revenue, net of current portion		5,551			5,836
Operating lease liabilities, net of current portion		2,467			2,318
Deferred tax liability		738			738
Other long-term liabilities		2,309			2,309
Total liabilities		615,283			615,475
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock ($0.00001 par value, 100,000,000 shares authorized, none issued and outstanding as of April 5, 2025 and January 4, 2025, respectively)		—			—
Class A common stock ($0.00001 par value, 600,000,000 shares authorized, 51,936,348 and 51,713,132 shares issued and 43,305,826 and 43,323,183 shares outstanding as of April 5, 2025 and January 4, 2025, respectively)		—			—
Class B common stock ($0.00001 par value, 60,000,000 shares authorized, 11,865,546 and 12,005,172 shares issued and outstanding as of April 5, 2025 and January 4, 2025, respectively)		—			—
Treasury stock, at cost 8,630,522 and 8,389,949 shares of Class A common stock as of April 5, 2025 and January 4, 2025, respectively		(81,212	)		(80,148	)
Additional paid-in capital		250,346			244,611
Accumulated deficit		(98,681	)		(100,416	)
Total stockholders’ equity attributable to European Wax Center, Inc.		70,453			64,047
Noncontrolling interests		28,059			27,545
Total stockholders’ equity		98,512			91,592
Total liabilities and stockholders’ equity	$	713,795		$	707,067

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CoNDENSED Consolidated Statements of Operations

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
REVENUE
Product sales	$	28,871		$	29,498
Royalty fees		12,428			12,436
Marketing fees		7,203			7,096
Other revenue		2,925			2,844
Total revenue		51,427			51,874
OPERATING EXPENSES
Cost of revenue		13,276			13,524
Selling, general and administrative		15,340			13,466
Advertising		7,248			8,688
Depreciation and amortization		4,981			5,095
Gain on sale of center		—			(81	)
Total operating expenses		40,845			40,692
Income from operations		10,582			11,182
Interest expense, net		6,633			6,336
Other income		(2	)		(20	)
Income before income taxes		3,951			4,866
Income tax expense		1,381			1,212
NET INCOME	$	2,570		$	3,654
Less: net income attributable to noncontrolling interests		835			889
NET INCOME ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC.	$	1,735		$	2,765
Net income per share
Basic - Class A Common Stock	$	0.04		$	0.06
Diluted - Class A Common Stock	$	0.04		$	0.06
Weighted average shares outstanding
Basic - Class A Common Stock		43,300,933			48,555,134
Diluted - Class A Common Stock		43,421,246			48,633,413

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CONDENSED Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
Cash flows from operating activities:
Net income	$	2,570		$	3,654
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,981			5,095
Amortization of deferred financing costs		1,471			1,377
Provision for inventory obsolescence		—			(30	)
Provision for bad debts		73			9
Deferred income taxes		1,281			1,125
Remeasurement of tax receivable agreement liability		(2	)		(20	)
Gain on sale of center		—			(81	)
Equity compensation		2,564			1,382
Changes in assets and liabilities:
Accounts receivable		(600	)		1,035
Inventory, net		478			(1,537	)
Prepaid expenses and other assets		1,545			1,160
Accounts payable and accrued liabilities		(945	)		(1,184	)
Deferred revenue		(429	)		(1,029	)
Other long-term liabilities		(280	)		(232	)
Net cash provided by operating activities		12,707			10,724
Cash flows from investing activities:
Purchases of property and equipment		(660	)		(30	)
Cash received for sale of center		—			135
Net cash (used in) provided by investing activities		(660	)		105
Cash flows from financing activities:
Principal payments on long-term debt		(1,000	)		(1,000	)
Distributions to EWC Ventures LLC members		(1,228	)		(1,180	)
Repurchase of Class A common stock		(1,064	)		—
Taxes on vested restricted stock units paid by withholding shares		(159	)		(319	)
Dividend equivalents to holders of EWC Ventures units		(10	)		(687	)
Net cash used in financing activities		(3,461	)		(3,186	)
Net increase in cash, cash equivalents and restricted cash		8,586			7,643
Cash, cash equivalents and restricted cash, beginning of period		56,194			59,228
Cash, cash equivalents and restricted cash, end of period	$	64,780		$	66,871
Supplemental cash flow information:
Cash paid for interest	$	5,439		$	5,490
Cash paid for income taxes	$	143		$	40
Non-cash investing activities:
Property purchases included in accounts payable and accrued liabilities	$	89		$	—
Property purchases included in additional paid-in capital	$	3,968		$	—
Right-of-use assets obtained in exchange for operating lease obligations	$	446		$	592

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CONDENSED Consolidated Statements of STOCKHOLDERS’ Equity

(Amounts in thousands, except share and per share amounts)

(Unaudited)



											Additional
	Class A Common Stock					Class B Common Stock					paid-in			Accumulated			Treasury			Noncontrolling			Total
	Shares			Amount		Shares			Amount		capital			deficit			Stock			interest			equity
Balance at January 4, 2025		43,323,183		$	—		12,005,172		$	—	$	244,611		$	(100,416	)	$	(80,148	)	$	27,545		$	91,592
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		139,626			—		(139,626	)		—		—			—			—			—			—
Vesting of restricted stock units		114,024			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(30,434	)		—		—			—		(159	)		—			—			—			(159	)
Equity compensation		—			—		—			—		6,532			—			—			—			6,532
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,228	)		(1,228	)
Repurchase of Class A common stock		(240,573	)		—		—			—		—			—			(1,064	)		—			(1,064	)
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		269			—			—			—			269
Allocation of equity to noncontrolling interests		—			—		—			—		(907	)		—			—			907			—
Net income		—			—		—			—		—			1,735			—			835			2,570
Balance at April 5, 2025		43,305,826		$	—		11,865,546		$	—	$	250,346		$	(98,681	)	$	(81,212	)	$	28,059		$	98,512



											Additional
	Class A Common Stock					Class B Common Stock					paid-in			Accumulated			Treasury			Noncontrolling			Total
	Shares			Amount		Shares			Amount		capital			deficit			Stock			interest			equity
Balance at January 6, 2024		44,476,981		$	—		12,278,876		$	—	$	232,902		$	(110,878	)	$	(40,000	)	$	32,979		$	115,003
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		56,232			—		(56,232	)		—		—			—			—			—			—
Vesting of restricted stock units		99,023			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(24,724	)		—		—			—		(319	)		—			—			—			(319	)
Forfeiture of unvested incentive units		—			—		(3,055	)		—		—			—			—			—			—
Equity compensation		—			—		—			—		1,382			—			—			—			1,382
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,180	)		(1,180	)
Forfeiture of accrued dividend equivalents		—			—		—			—		—			—			—			10			10
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		(112	)		—			—			—			(112	)
Allocation of equity to noncontrolling interests		—			—		—			—		21			—			—			(21	)		—
Net income		—			—		—			—		—			2,765			—			889			3,654
Balance at April 6, 2024		44,607,512		$	—		12,219,589		$	—	$	233,874		$	(108,113	)	$	(40,000	)	$	32,677		$	118,438

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

Notes to CONDENSED Consolidated Financial Statements

(Amounts in thousands, except share/unit and per share/unit amounts)

(Unaudited)

1. Nature of business and organization

European Wax Center, Inc. was formed as a Delaware corporation on April 1, 2021. European Wax Center, Inc. and subsidiaries (the “Company”) was formed for the purpose of completing a public offering and related transactions in order to carry on the business of EWC Ventures, LLC (“EWC Ventures”) and its subsidiaries. Through its subsidiaries, the Company is engaged in selling franchises of European Wax Center, distributing unique facial and body waxing products to franchisees which are used to perform waxing services and providing branded facial and body waxing products directly to consumers at various locations throughout the United States.

The Company operates on a fiscal calendar which, in a given year, consists of a 52 or 53 week period ending on the Saturday closest to December 31st. The quarters ended April 5, 2025 and April 6, 2024 both consisted of 13 weeks.

2. Summary of significant accounting policies

(a) Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission and includes the operations of the Company and EWC Ventures and its wholly owned subsidiaries. EWC Ventures is considered a variable interest entity. The Company is the primary beneficiary of EWC Ventures. As a result, the Company consolidates EWC Ventures.

The condensed consolidated balance sheet as of January 4, 2025 is derived from the audited consolidated financial statements of the Company but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended January 4, 2025 included in our annual report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation.

Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the audited consolidated financial statements and the related notes thereto for the year ended January 4, 2025 included in our annual report on Form 10-K.

(b) Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the financial statements include revenue recognition, provision for inventory obsolescence, income taxes, the tax receivable agreement (as amended, the “TRA”), the expected life of franchise agreements, the useful life of reacquired rights, valuation of equity-based compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets, including indefinite-lived intangible assets. Actual results could differ from those estimates.

The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards. We also intend to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not

limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

(d) Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income (loss) is equal to net income (loss) for all periods presented.

(e) Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

(f) Immaterial restatement of prior period financial statements

Subsequent to the issuance of the condensed consolidated financial statements for the period ended July 6, 2024, we identified that an error existed in the purchase price allocation related to the General Atlantic acquisition of EWC Ventures. This error affects the financial statements for the period ended December 29, 2018, as well as all subsequent periods. Specifically, we identified an improper application of the valuation methodology within the historical valuations of the Company’s trade name, franchise relationships and goodwill. This resulted in an understatement of the trade name and franchise relationships of $285,657 and $3,782 respectively and an overstatement of goodwill in the amount of $289,439 for all respective periods beginning as of December 29, 2018. Additionally, the error also resulted in an understatement of accumulated amortization of $2,112 as of April 6, 2024. We evaluated the error and concluded that it was not material to the previously issued consolidated financial statements. The accompanying financial statements and relevant footnotes to the condensed consolidated financial statements in this Form 10-Q have been revised to correct for the immaterial error discussed above. The Company will also correct previously reported financial information for such immaterial errors in future filings, as applicable. The following tables reflect the effects of the correction on all affected line items of the Company’s previously reported condensed consolidated financial statements presented in this Form 10-Q.

The following table represents the adjustments to our condensed consolidated statements of operations and condensed consolidated statements of cash flows for the thirteen weeks ended April 6, 2024 (in thousands except earnings per share):


	Thirteen weeks ended April 6, 2024
	As Previously Reported		Adjustment			As Restated
Condensed Consolidated Statements of Operations	(in thousands)

Depreciation and amortization	$	5,000	$	95		$	5,095
Total operating expenses		40,597		95			40,692
Income from operations		11,277		(95	)		11,182
Income before income taxes		4,961		(95	)		4,866
Income tax expense (benefit)		1,232		(20	)		1,212
Net income		3,729		(75	)		3,654
Net income attributable to noncontrolling interest		908		(19	)		889
Net income attributable to European Wax Center Inc.		2,821		(56	)		2,765
Net profit (loss) per share attributable to Class A ordinary shareholders, basic	$	0.06	$	—		$	0.06
Net profit (loss) per share attributable to Class A ordinary shareholders, diluted	$	0.06	$	—		$	0.06

Condensed Consolidated Statements of Cash Flows
Net income	$	3,729	$	(75	)	$	3,654
Depreciation and amortization		5,000		95			5,095
Deferred income taxes		1,145		(20	)		1,125

The following table represents the adjustments to our condensed consolidated statements of stockholders' equity as of each date described (in thousands):



	Additional paid-in capital			Accumulated deficit			Noncontrolling interest			Total equity
Condensed Consolidated Statements of Stockholders' Equity	(in thousands)
As Reported

Balance, January 6, 2024	$	232,848		$	(109,506	)	$	33,270		$	116,612
Net Income		—			2,821			908			3,729
TRA liability and deferred taxes arising from secondary offering and other exchanges		(113	)		—			—
Balance, April 6, 2024		233,819			(106,685	)		32,987			120,121
Adjustment
Balance, January 6, 2024		54			(1,374	)		(291	)		(1,609	)
Net Loss		—			(56	)		(19	)		(75	)
TRA liability and deferred taxes arising from secondary offering and other exchanges		1			—			—			1
Balance, April 6, 2024		55			(1,428	)		(310	)		(1,683	)
As Restated
Balance, January 6, 2024		232,902			(110,878	)		32,979			115,003
Net Income		—			2,765			889			3,654
TRA liability and deferred taxes arising from secondary offering and other exchanges		(112	)		—			—			(112	)
Balance, April 6, 2024		233,874			(108,113	)		32,677			118,438

3. Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:


	April 5, 2025		January 4, 2025
Prepaid inventory	$	449	$	494
Prepaid insurance		529		1,139
Prepaid technology		1,556		1,908
Prepaid advertising		639		878
Prepaid commissions		332		345
Prepaid other & other current assets		622		528
Total	$	4,127	$	5,292

4. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consisted of the following:


	April 5, 2025		January 4, 2025
Accounts payable	$	5,687	$	5,615
Accrued inventory		1,623		2,248
Accrued compensation		3,554		4,630
Accrued taxes and penalties		1,130		1,013
Accrued technology and subscription fees		—		139
Accrued interest		1,213		1,156
Accrued professional fees		488		632
Accrued advertising		2,312		1,212
Accrued dividend equivalents		—		10
Other accrued liabilities		525		699
Total accounts payable and accrued liabilities	$	16,532	$	17,354

5. Long-term debt

Long-term debt consists of the following:


	April 5, 2025			January 4, 2025
Class A-2 Notes	$	389,000		$	390,000
Less: current portion		(4,000	)		(4,000	)
Total long-term debt		385,000			386,000
Less: unamortized debt discount and deferred financing costs		(11,370	)		(12,754	)
Total long-term debt, net	$	373,630		$	373,246

On April 6, 2022 (the “Closing Date”), EWC Master Issuer LLC, a limited-purpose, bankruptcy remote, indirect subsidiary of the Company (the “Master Issuer”), completed a securitization transaction pursuant to which it issued $400,000 in aggregate principal amount of Series 2022-1 5.50% Fixed Rate Senior Secured Notes, Class A-2 (the “Class A-2 Notes”).

In connection with the issuance of the Class A-2 Notes, the Master Issuer also entered into (i) a revolving financing facility that allows for the issuance of up to $40,000 in Variable Funding Notes (“Variable Funding Notes”), and certain letters of credit and (2) an advance funding facility with Bank of America, N.A. (“BofA”), whereby BofA and any other advance funding provider thereunder would, in certain specified circumstances, make certain debt service advances and collateral protection advances (not to exceed $5,000 in the aggregate). The Variable Funding Notes were undrawn as of April 5, 2025.

Fair Value

The carrying values of cash, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Cash equivalents consist of money market funds for which original cost approximates fair value. Cash equivalents have an approximate fair value of $24,818 as of April 5, 2025 which was determined using Level 1 inputs. Our outstanding Class A-2 Notes had

an approximate fair value of $382,037 as of April 5, 2025 which was estimated using Level 2 inputs, obtained from an independent source, and based on quoted prices for recent trades of our Class A-2 Notes.

6. Equity Based Compensation

2025 Inducement Plan

On March 21, 2025, the board of directors of the Company (the “Board”) approved the European Wax Center, Inc. 2025 Inducement Plan (the “2025 Inducement Plan”). In accordance with Nasdaq Listing Rule 5635(c)(4), the Company did not seek approval of the 2025 Inducement Plan by its stockholders. Pursuant to the Inducement Plan, the Company may grant nonqualified stock options, stock appreciation rights, restricted stock units and certain other stock-based awards for up to a total of 4,000,000 shares of Class A Common Stock of the Company, par value $0.00001 per share, to employees entering into employment or returning to employment after a bona fide period of non-employment with the Company.

Restricted Stock Units

During the 13 weeks ended April 5, 2025 and April 6, 2024, we granted 1,615,782 and 356,727 restricted stock units (“RSUs”), respectively, to certain employees and directors under the 2021 Omnibus Incentive Plan (the “2021 Incentive Plan”). In addition, during the 13 weeks ended April 5, 2025, we granted 244,000 RSUs to certain employees under the 2025 Inducement Plan. The RSUs granted generally vest on the anniversaries of the date of grant over a period of two to four years, subject in all cases to continued employment on the applicable vesting date. The total grant date fair value of the RSUs will be recognized as equity-based compensation expense over the vesting period. The weighted average grant date fair values of the RSUs granted during the 13 weeks ended April 5, 2025 and April 6, 2024 were $5.00 and $14.73, respectively. The weighted average grant date fair values of the RSUs granted were equal to the closing price of the underlying Class A common stock on the grant dates.

Class A Common Stock Options

During the 13 weeks ended April 5, 2025, we granted 1,767,187 options, to certain employees under the 2021 Incentive Plan. In addition, during the 13 weeks ended April 5, 2025, we granted 900,000 options to certain employees under the 2025 Inducement Plan. The weighted average exercise prices of options granted during the 13 weeks ended April 5, 2025 were $8.19 per share. During the 13 weeks ended April 6, 2024, we granted 308,776 options to certain employees under the 2021 Incentive Plan. The weighted average exercise prices of options granted during the 13 weeks ended April 6, 2024 were $17.74 per share. The options granted have a ten-year contractual term and will cliff vest on either the third or fourth anniversary of the grant date, subject in all cases to continued employment on the applicable vesting date. The weighted average grant date fair values of the options were $3.47 for the 13 weeks ended April 5, 2025, and $8.40 for the 13 weeks ended April 6, 2024. The total grant date fair value of the stock options will be recognized as equity-based compensation expense over the vesting period. As these options were granted with exercise prices 20% higher than the closing price, it was determined that the options contained an implicit market condition. As such, the Company estimated the fair value of the options using a trinomial lattice model.

The following table presents the weighted average assumptions used in the lattice model to determine the fair value of the options granted during the 13 weeks ended April 5, 2025 and April 6, 2024:


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
Expected dividend yield		0.0	%		0.0	%
Expected volatility		67.7	%		56.0	%
Risk-free rate		4.3	%		4.1	%
Suboptimal exercise factor	2.5x			2.5x

A description of each of the inputs to the lattice model is as follows:

•

Expected dividend yield - The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future. An increase in the expected dividend yield would decrease compensation expense.

•

Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based on the historical volatility of the Company as well as that of a group of guideline companies. An increase in expected volatility would increase compensation expense.

•

Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the contractual term of the award. An increase in the risk-free interest rate would increase compensation expense.

•

Suboptimal exercise factor - The multiple of the exercise price at which an option exercise would be expected to occur. An increase in the suboptimal exercise factor would increase compensation expense.

7. Commitments and contingencies

Litigation

The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material effect on its financial position, results of operations, or cash flows.

8. Revenue from contracts with customers

Contract liabilities consist of deferred revenue resulting from franchise fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are service revenues from corporate-owned centers, including customer prepayments in connection with the Wax Pass program. Contract liabilities are classified as deferred revenue on the condensed consolidated balance sheets.

Deferred franchise fees are reduced as fees are recognized in revenue over the term of the franchise license for the respective center. Deferred service revenues are recognized over time as the services are performed. The following table reflects the change in contract liabilities for the periods indicated:


	Contract liabilities
Balance at January 4, 2025	$	9,985
Revenue recognized that was included in the contract liability at the beginning of the year		(1,012	)
Increase, excluding amounts recognized as revenue during the period		583
Balance at April 5, 2025	$	9,556

During the 13 weeks ended April 5, 2025, the Company recognized $1,012 in revenue that was included in the contract liability as of January 4, 2025. During the 13 weeks ended April 6, 2024, the Company recognized $1,863 in revenue that was included in the contract liability as of January 6, 2024.

The weighted average remaining amortization period for deferred revenue is 3.2 years.

The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of April 5, 2025. The Company has elected to exclude short term contracts, sales-based royalties and any other variable consideration recognized on an “as invoiced” basis.


Contract liabilities to be recognized in:	Amount
2025 (from April 6, 2025)	$	3,714
2026		1,136
2027		1,089
2028		1,049
2029		859
Thereafter		1,709
Total	$	9,556

The summary set forth below represents the balances in deferred revenue as of April 5, 2025 and January 4, 2025:


	April 5, 2025		January 4, 2025
Franchise fees	$	6,873	$	7,053
Service revenue		2,683		2,932
Total deferred revenue		9,556		9,985
Long-term portion of deferred revenue		5,551		5,836
Current portion of deferred revenue	$	4,005	$	4,149

9. Income taxes

The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of EWC Ventures. The remaining share of EWC Ventures income or loss is non-taxable to the Company and is not reflected in current or deferred income taxes.

EWC Ventures is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, EWC Ventures is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by EWC Ventures is passed through to and included in the taxable income or loss of its members on a pro rata basis, subject to applicable tax regulations.

We recorded income tax expense of $1,381 and $1,212 for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively. The effective tax rate was 35.0% and 24.9% for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively. The effective tax rate for the 13 weeks ended April 5, 2025 differs from the U.S. federal statutory rate primarily due to nondeductible officer compensation, non-taxable income attributable to noncontrolling interest, state taxes and the tax effects of stock compensation. The effective tax rate for the 13 weeks ended April 6, 2024 differs from the U.S. federal statutory rate primarily due to non-taxable income attributable to noncontrolling interest, state taxes and the tax effects of stock compensation.

Tax Receivable Agreement

As of April 5, 2025, future payments under the TRA are expected to be $204,822. Payments made under the TRA represent payments that otherwise would have been made to taxing authorities in the absence of attributes obtained by us as a result of exchanges by our pre-IPO members. Such amounts will be paid only when a cash tax savings is realized as a result of attributes subject to the TRA. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize certain tax benefits to reduce our cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in other expense on the condensed consolidated statement of operations in the period in which the change occurs.

10. Noncontrolling interests

We are the sole managing member of EWC Ventures and, as a result of this control, and because we have a substantial financial interest in EWC Ventures, we consolidate the financial results of EWC Ventures. We report noncontrolling interests representing the economic interests in EWC Ventures held by the other members of EWC Ventures. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures non-voting common units (“EWC Ventures Units”) by us and the other holders of EWC Ventures Units during the period.

The EWC Ventures LLC Agreement permits the members of EWC Ventures to exchange EWC Ventures Units, together with related shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis or, at the election of the Company, for cash at the current fair value on the date of the exchange. Changes in the Company’s ownership interest in EWC Ventures while retaining control of EWC Ventures will be accounted for as equity transactions. As such, future redemptions or direct exchanges of EWC Ventures Units by the other members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. As of April 5, 2025, all EWC Ventures Units have vested.

The following table summarizes the ownership of EWC Ventures as of April 5, 2025:


	April 5, 2025
	Units Owned		Ownership Percentage
European Wax Center, Inc.		43,305,826		78.5	%
Noncontrolling interests		11,865,546		21.5	%
Total		55,171,372		100.0	%

The following table presents the effect of changes in the Company’s ownership interest in EWC Ventures on the Company’s equity for the 13 weeks ended April 5, 2025 and April 6, 2024:


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
Net income attributable to European Wax Center, Inc.	$	1,735		$	2,765
Transfers from noncontrolling interests:
(Decrease) increase in additional-paid-in-capital as a result of equity allocations from the noncontrolling interest		(907	)		21
Net increase in equity of European Wax Center, Inc. due to equity interest transactions with noncontrolling interests	$	828		$	2,786

11. Net income per share

Basic net income per share of Class A common stock is computed by dividing net income attributable to Class A common shareholders for the period by the weighted average number of shares of Class A common stock outstanding for the same period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted net income per share of Class A common stock is computed by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities using the more dilutive of either the treasury stock method or the if-converted method.

The following table sets forth the computation of basic net income per share of Class A common stock for the 13 weeks ended April 5, 2025 and April 6, 2024:


	For the Thirteen Weeks Ended
	April 5, 2025		April 6, 2024
(in thousands, except for share and per share amounts)
Net income	$	2,570	$	3,654
Less: net income attributable to noncontrolling interests		815		921
Net income applicable to Class A common shareholders	$	1,755	$	2,733
Basic weighted average outstanding shares
Class A Common Stock		43,300,933		48,555,134
Basic net income per share applicable to common shareholders:
Class A Common Stock	$	0.04	$	0.06

The following table sets forth the computation of diluted net income per share of Class A common stock for the 13 weeks ended April 5, 2025 and April 6, 2024:


	For the Thirteen Weeks Ended
	April 5, 2025		April 6, 2024
(in thousands, except for share and per share amounts)
Net income	$	2,570	$	3,654
Less: net income attributable to noncontrolling interests		814		920
Net income applicable to Class A common shareholders	$	1,756	$	2,734
Diluted weighted average outstanding shares
Basic weighted average outstanding shares - Class A Common Stock		43,300,933		48,555,134
Effect of dilutive securities:
RSUs and Restricted Shares		120,313		78,279
Diluted weighted average outstanding shares - Class A Common Stock		43,421,246		48,633,413
Diluted net income per share applicable to common shareholders:
Class A Common Stock	$	0.04	$	0.06

For the 13 weeks ended April 5, 2025 and April 6, 2024, diluted net income per share of Class A common stock was calculated using the treasury stock method.

Shares of Class B common stock do not share in the earnings or losses attributable to the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net income per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related EWC Ventures Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

The following table sets forth the securities which were excluded from the computation of diluted net income per share of Class A common stock for the 13 weeks ended April 5, 2025 and April 6, 2024 as they were determined to be antidilutive:


	For the Thirteen Weeks Ended
	April 5, 2025		April 6, 2024
Antidilutive securities excluded from the computation of diluted net income per share:
Class B Common Stock		11,865,546		12,219,589
Options		4,267,576		734,138
RSUs and Restricted Shares		402,101		342,350
Warrants		2,730,000		—

12. Stockholders’ equity

Share Exchange Transactions

During the 13 weeks ended April 5, 2025, certain members of EWC Ventures exercised their exchange rights and exchanged 139,626 EWC Ventures Units and the corresponding shares of Class B common stock for 139,626 newly issued shares of Class A common stock. During the 13 weeks ended April 6, 2024 certain members of EWC Ventures exercised their exchange rights and exchanged 56,232 EWC Ventures Units and the corresponding shares of Class B common stock for 56,232 newly issued shares of Class A common stock. These exchange transactions increased the Company’s ownership interest in EWC Ventures.

Share Repurchases

During the 13 weeks ended April 5, 2025, the Company repurchased 240,573 shares of Class A common stock at an average price of $4.42 per share for $1,064 pursuant to the stock repurchase program authorized by the Board in May 2024.

The Company did not repurchase shares during the 13 weeks ended April 6, 2024.

13. Subsequent Events

Subsequent to April 5, 2025, in connection with Thomas Kim’s appointment as Chief Financial Officer, Mr. Kim received (i) a grant of 200,000 restricted stock units, (ii) a grant of options to purchase 310,000 shares of the Company’s Class A common stock with an exercise price of $3.51, (iii) a grant of options to purchase 212,500 shares of Class A common stock with an exercise price of $9.00 and (iv) a grant of options to purchase 212,500 shares of Class A common stock with an exercise price of $12.00. The restricted stock units will vest in equal installments on each of the first four anniversaries of the date of grant, and the options will be exercisable on the fourth anniversary of the date of grant, generally subject to continued employment through the applicable vesting date, subject to accelerated vesting in certain circumstances. These grants were made pursuant to the 2025 Inducement Plan.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our historical performance, financial condition and future prospects in conjunction with the management’s discussion and analysis of financial conditions and results of operations and the audited consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended January 4, 2025. The following discussion and analysis should also be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements that are based on the views and beliefs of our management, as well as assumptions and estimates made by our management. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. For further information on items that could impact our future operating performance or financial condition, see Part I, “Item 1A. Risk Factors” included in our annual report on Form 10-K for the fiscal year ended January 4, 2025.

We conduct substantially all of our activities through our subsidiary, EWC Ventures, LLC and its subsidiaries. We operate on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31. Our fiscal quarters are composed of 13 weeks each, except for 53-week fiscal years for which the fourth quarter will be composed of 14 weeks.

The consolidated financial statements for the 13 weeks ended April 6, 2024 have been adjusted to correct immaterial prior period errors as discussed in Note 2 (f) — Immaterial restatement of prior period financial statements. Accordingly, Management’s Discussion and Analysis reflects the impact of those corrections.

Overview

We are the leading franchisor and operator of out-of-home (“OOH”) waxing services in the United States. We delivered over 23 million waxing services in both 2024 and 2023. Throughout our highly franchised network, we generated system-wide sales of $951 million in fiscal 2024, which consisted of only 52 weeks. We generated system-wide sales of $955 million in fiscal 2023, which had 53 weeks. Our portfolio of centers operate in 1,062 locations across 45 states as of April 5, 2025. Of these locations, 1,057 are franchised centers operated by franchisees and five are corporate-owned centers.

We believe that the European Wax Center brand is trusted, efficacious and accessible. Our culture is obsessed with our guest experience and we deliver a superior guest experience relative to smaller chains and independent salons. We offer guests high-quality, hygienic waxing services administered by our licensed, EWC-trained estheticians (our “wax specialists”), at our accessible and welcoming locations (our “centers”). Our technology-enabled guest interface simplifies and streamlines the guest experience with automated appointment scheduling and remote check-in capabilities, with a goal of making guest visits convenient, hassle-free, and consistent across our network of centers. Our well-known, pre-paid Wax Pass program makes payment easy and convenient, fostering loyalty and return visits. Many of our loyal guests view us as a non-discretionary part of their personal-care and beauty regimens.

We believe that our asset-light franchise platform delivers capital-efficient growth with strong cash flow generation. Our centers are 99% owned and operated by our franchisees who benefit from strong unit-level economics, with mature centers generating annual cash-on-cash returns in excess of 40%.

In partnership with our franchisees, we fiercely protect our points of differentiation that attract new guests, build meaningful relationships and promote lasting retention. We are so confident in our ability to delight that we have always offered all of our guests their first wax free on certain services.

Hair removal is an integral and recurring part of the personal-care and beauty regimens for most women and many men in the United States, and hair removal solutions are consistently in demand, given the recurring nature of hair growth.

Under the stewardship of our CEO and the other management team members, we have prioritized building a culture of performance, success and inclusivity. Additionally, we have intensified our focus on enhancing the guest experience and have invested significantly in our corporate infrastructure and marketing capabilities to continue our track record of sustainable growth.

Growth Strategy and Outlook

We plan to grow our business over the long-term primarily by opening new franchised centers as well as increasing our system-wide sales in existing centers. We believe that we have a meaningful whitespace opportunity to support our long-term growth plan for our center format across the United States.

However, the outlook on the consumer environment remains uncertain, and many of our centers across the network are currently experiencing declining transactions and profitability. In the near-term, many franchisees have paused their new center growth plans as we work to stabilize and realign the business to increase transactions and profitability at existing locations. While we believe we will

have positive new center openings on a gross basis in 2025, we expect that closures will more than offset center growth on a net basis in 2025.

We continue to focus on our near-term priorities for the business including (1) developing a robust, data-rich marketing engine that drives traffic to centers; (2) cultivating a more effective, service-based infrastructure to enable franchisee success; (3) implementing a more sophisticated development approach focused on thoughtful, profitable expansion; and (4) assembling a strong management team with the skill sets and expertise needed to address these opportunities and achieve sustainable long-term growth.

Key Business Metrics

We track the following key business metrics to evaluate our performance, identify trends, formulate financial projections, and make strategic decisions. Accordingly, we believe that these key business metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. These key business metrics are presented for supplemental information purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled metrics or measures presented by other companies.

Number of Centers. Number of centers reflects the number of franchised and corporate-owned centers open at the end of the reporting period. We review the number of new center openings, the number of closed centers and the number of relocations of centers to assess net new center growth, and drivers of trends in system-wide sales, royalty and franchise fee revenue and corporate-owned center sales.

System-Wide Sales. System-wide sales represent sales from same day services, retail sales and cash collected from wax passes for all centers in our network, including both franchisee-owned and corporate-owned centers. While we do not record franchised center sales as revenue, our royalty revenue is calculated based on a percentage of franchised center sales, which are 6.0% of sales, net of retail product sales, as defined in the franchise agreement. This measure allows us to better assess changes in our royalty revenue, our overall center performance, the health of our brand and the strength of our market position relative to competitors. Our system-wide sales growth is driven by net new center openings as well as increases in same-store sales.

Same-Store Sales. Same-store sales reflect the change in year-over-year sales from services performed and retail sales for the same-store base. We define the same-store base to include those centers open for at least 52 full weeks. If a center is closed for greater than six consecutive days, the center is deemed a closed center and is excluded from the calculation of same-store sales until it has been reopened for a continuous 52 full weeks. This measure highlights the performance of existing centers, while excluding the impact of new center openings and closures. We review same-store sales for corporate-owned centers as well as franchisee-owned centers. Same-store sales growth is driven by increases in the number of transactions and average transaction size.

Net New Center Openings. The number of net new center openings reflects centers opened during a particular reporting period for both franchisee-owned and corporate-owned centers, less centers closed during the same period. Opening new centers is an integral part of our growth strategy, and we expect the majority of our future new centers to be franchisee-owned. Before we obtain the certificate of occupancy or report any revenue from new corporate-owned centers, we incur pre-opening costs, such as lease costs, labor expense and other operating expenses. Some of our centers open with an initial start-up period of higher-than-normal marketing and operating expenses, particularly as a percentage of monthly revenue.

Average Unit Volume (“AUV”). AUV consists of the average annual system-wide sales of all centers that have been open for a trailing 52-week period or longer. This measure is calculated by dividing system-wide sales during the applicable period for all centers being measured by the number of centers being measured. AUV allows management to assess our franchisee-owned and corporate-owned center economics. Our AUV growth is primarily driven by increases in services and retail product sales as centers fill their books of reservations, which we refer to as maturation of centers.


	For the Thirteen Weeks Ended
(in thousands, except operating data and percentages)	April 5, 2025			April 6, 2024
Number of system-wide centers (at period end)		1,062			1,051
System-wide sales	$	225,937		$	221,379
Same-store sales		0.7	%		(1.2	)%
Net new center openings		(5	)		7

The table below presents changes in the number of system-wide centers for the periods indicated:


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
System-wide Centers
Beginning of Period		1,067			1,044
Openings		5			10
Closures		(10	)		(3	)
End of Period		1,062			1,051

Significant Factors Impacting Our Financial Results

We believe there are several important factors that have impacted, and that we expect will continue to impact, our business and results of operations. These factors include:

New Center Openings. We expect that new centers will be a key driver of growth in our future revenue and operating profit results. Opening new centers is an important part of our growth strategy, and we expect the majority of our future new centers will be franchisee-owned. Our results of operations have been and will continue to be materially affected by the timing and number of new center openings each period. As centers mature, center revenue and profitability increase significantly. The performance of new centers may vary depending on various factors such as the effective management and cooperation of our franchisee partners, whether the franchise is part of a multi-unit development agreement, the center opening date, the time of year of a particular opening, the number of licensed wax specialists recruited, and the location of the new center, including whether it is located in a new or existing market. Our planned long-term center expansion will place increased demands on our operational, managerial, administrative, financial, and other resources.

System-Wide Sales Growth. System-wide sales growth is a key driver of our business. Various factors affect system-wide sales, including:

•

consumer preferences and overall economic trends;

•

the recurring, non-discretionary nature of personal-care services and purchases;

•

our ability to identify and respond effectively to guest preferences and trends;

•

our ability to provide a variety of service offerings that generate new and repeat visits to our centers;

•

the guest experience we provide in our centers;

•

the availability of experienced wax specialists;

•

our ability to source and deliver products accurately and timely;

•

changes in service or product pricing, including promotional activities;

•

the number of services or items purchased per center visit;

•

center closures in response to state or local regulations or health concerns

Overall Economic Trends. Macroeconomic factors that may affect guest spending patterns, and thereby our results of operations, include employment rates, the rate of inflation, business conditions, changes in the housing market, the availability of credit, interest rates, tax rates and fuel and energy costs. However, we believe that many of our guests see our services as largely non-discretionary in nature. Therefore, while overall economic trends and related changes in consumer behavior have impacted us and may impact us in the future, we believe that such changes have less of an impact on our business than they may have for other companies that have a significant portion of their sales attributed to discretionary consumer spending.

Guest Preferences and Demands. Our ability to maintain our appeal to existing guests and attract new guests depends on our ability to develop and offer a compelling assortment of services responsive to guest preferences and trends. We also believe that OOH waxing is a recurring need that brings guests back for services on a highly recurring basis which is reflected in the predictability of our financial performance over time. Our guests’ routine personal-care need for OOH waxing is further demonstrated by the top 20% of guests who visit us, on average, approximately every five weeks.

Our Ability to Source and Distribute Products Effectively. Our revenue and operating income are affected by our ability to purchase our products and supplies in sufficient quantities at competitive prices. While we believe our vendors have adequate capacity to meet our current and anticipated demand, our level of revenue could be adversely affected in the event we face constraints in our supply

chain, including the inability of our vendors to produce sufficient quantities of some products or supplies in a manner that matches market demand from our guests, leading to lost revenue. We depend on two key suppliers to source our Comfort Wax and two key suppliers to source our branded retail products and we are thus exposed to concentration of supplier risk. Our supply chain incorporates both domestic and international procurement. In anticipation of potential tariffs on internationally sourced products, we are undertaking a comprehensive review of alternative sourcing strategies and engaging in negotiations to mitigate cost increases.

Our Ability to Recruit and Retain Qualified Licensed Wax Specialists for our Franchised Centers. Our franchisees’ ability to operate their centers is largely dependent upon their ability to attract and retain qualified, licensed wax specialists. Our unmatched scale enables us to ensure that we universally train our wax specialists at the highest standards, ensuring that our guests experience consistent level of quality, regardless of the specific center they visit. The combination of consistent service delivery, across our trained base of wax specialists, along with the payment ease and convenience of our well-known, pre-paid Wax Pass program fosters loyalty and return visits across our guest base. Over time, our ability to build and maintain a strong pipeline of licensed wax specialists is important to preserving our current brand position.

Seasonality. Our results are subject to seasonality fluctuations in that services are typically in higher demand in periods leading up to holidays and the summer season. The resulting demand trend has historically yielded higher system-wide sales in the second and fourth quarter of our fiscal year. In addition, our quarterly results may fluctuate significantly, because of several factors, including the timing of center openings, price increases and promotions, and general economic conditions.

Components of Results of Operations

Revenue

Product Sales: Product sales consist of revenue earned from sales of Comfort Wax, other products consumed in administering our wax services and retail merchandise to franchisees, as well as retail merchandise sold in corporate-owned centers. Revenue on product sales is recognized upon transfer of control. Our product sales revenue comprised 56.1% and 56.9% of our total revenue for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively.

Royalty Fees: Royalty fees are earned based on a percentage of the franchisees’ gross sales, net of retail product sales, as defined in the applicable franchise agreement, and recognized in the period the franchisees’ sales occur. The royalty fee is 6.0% of the franchisees’ gross sales for such period and is paid weekly. Our royalty fees revenue comprised 24.2% and 24.0% of our total revenue for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively.

Marketing Fees: Marketing fees are earned based on 3.0% of the franchisees’ gross sales, net of retail product sales, as defined in the applicable franchise agreement, and recognized in the period the franchisees’ sales occur. Additionally, the Company charges a fixed monthly fee to franchisees for search engine optimization and search engine marketing services, which is due on a monthly basis and recognized in the period when services are provided. Our marketing fees revenue comprised 14.0% and 13.7% of our total revenue for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively.

Other Revenue: Other revenue primarily consists of service revenues from our corporate-owned centers and franchise fees, as well as technology fees and training, which together represent 5.7% and 5.4% of our total revenue for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively. Service revenues from our corporate-owned centers are recognized at the time services are provided. Amounts collected in advance of the period in which service is rendered are recorded as deferred revenue. Franchise fees are paid upon commencement of the franchise agreement and are deferred and recognized on a straight-line basis commencing at contract inception through the end of the franchise license term. Franchise agreements generally have terms of 10 years beginning on the date the center is opened and the initial franchise fees are amortized over a period approximating the term of the agreement. Deferred franchise fees expected to be recognized in periods greater than 12 months from the reporting date are classified as long-term on the condensed consolidated balance sheets. Technology fees and training are recognized as the related services are delivered and are not material to the overall business.

Costs and Expenses

Cost of Revenue: Cost of revenue primarily consists of the direct costs associated with wholesale product and retail merchandise sold, including distribution and outbound freight costs and provision for inventory obsolescence, as well as the cost of materials and labor for services rendered in our corporate-owned centers.

Selling, General and Administrative Expenses: Selling, general and administrative expenses primarily consist of wages, benefits and other compensation-related costs, third-party warehousing costs, corporate marketing costs, rent, software, and other administrative expenses incurred to support our existing franchise and corporate-owned centers, as well as expenses attributable to growth and development activities. Also included in selling, general and administrative expenses are accounting, legal, marketing operations, and other professional fees. Third-party warehousing costs recorded as a component of selling, general and administrative expenses, which consists primarily of logistics services in the form of warehouse inventory storage management and fulfillment costs, were $0.6 million for the 13 weeks ended April 5, 2025 and April 6, 2024. Corporate marketing costs recorded as a component of selling,

general and administrative expenses, which consists primarily of local and corporate marketing initiatives, sponsorships and influencers, were $0.4 million and $0.1 million for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively.

Advertising Expenses: Advertising expenses consist of advertising, public relations, and administrative expenses incurred to increase sales and further enhance the public reputation of the European Wax Center brand.

Depreciation and Amortization: Depreciation and amortization includes depreciation of property and equipment and capitalized leasehold improvements, as well as amortization of intangible assets, including franchisee relationships and reacquired area representative rights. Area representative rights represent an agreement with area representatives to sell franchise licenses and provide support to franchisees in a geographic region. From time to time, the Company enters into agreements to reacquire certain area representative rights.

Interest Expense, net: Interest expense, net consists of interest on our long-term debt, including amounts outstanding under our revolving financing facility, amortization of debt discount and deferred financing costs, gains and losses on debt extinguishment as well as interest income from short-term, highly-liquid investments.

Other (Income) Expense: Other (income) expense consists of non-cash gains and losses related to the remeasurement of our tax receivable agreement liability and contractual cash interest paid on our tax receivable agreement liability.

Income Tax Expense: We are subject to U.S. federal, state and local income taxes with respect to our taxable income, including our allocable share of any taxable income of EWC Ventures and are taxed at the prevailing corporate tax rates. Income tax expense includes both current and deferred income tax expense.

Noncontrolling Interests: We are the sole managing member of EWC Ventures. Because we manage and operate the business and control the strategic decisions and day-to-day operations of EWC Ventures and also have a substantial financial interest in EWC Ventures, we consolidate the financial results of EWC Ventures, and a portion of our net income (loss) is allocated to the noncontrolling interests to reflect the entitlement of the EWC Ventures Post-IPO Members to a portion of EWC Ventures’ net income (loss).

Results of Operations

The following tables presents our condensed consolidated statements of operations for each of the periods indicated (amounts in thousands, except percentages):


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024			$ Change			% Change
Revenue:
Product sales	$	28,871		$	29,498		$	(627	)		(2.1	)%
Royalty fees		12,428			12,436			(8	)		(0.1	)%
Marketing fees		7,203			7,096			107			1.5	%
Other revenue		2,925			2,844			81			2.8	%
Total revenue		51,427			51,874			(447	)		(0.9	)%
Operating expenses:
Cost of revenue		13,276			13,524			(248	)		(1.8	)%
Selling, general and administrative		15,340			13,466			1,874			13.9	%
Advertising		7,248			8,688			(1,440	)		(16.6	)%
Depreciation and amortization		4,981			5,095			(114	)		(2.2	)%
Gain on sale of center		—			(81	)		81			(100.0	)%
Total operating expenses		40,845			40,692			153			0.4	%
Income from operations		10,582			11,182			(600	)		(5.4	)%
Interest expense, net		6,633			6,336			297			4.7	%
Other income		(2	)		(20	)		18			90.0	%
Income before income taxes		3,951			4,866			(915	)		(18.8	)%
Income tax expense		1,381			1,212			169			13.9	%
Net income	$	2,570		$	3,654		$	(1,084	)		(29.7	)%
Less: net income attributable to noncontrolling interests		835			889			(54	)		(6.1	)%
Net income attributable to European Wax Center, Inc.	$	1,735		$	2,765		$	(1,030	)		(37.3	)%

The following table presents the components of our condensed consolidated statements of operations for each of the periods indicated, as a percentage of revenue:


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
Revenue:
Product sales		56.1	%		56.9	%
Royalty fees		24.2	%		24.0	%
Marketing fees		14.0	%		13.7	%
Other revenue		5.7	%		5.4	%
Total revenue		100.0	%		100.0	%
Costs and expenses:
Cost of revenue		25.8	%		26.1	%
Selling, general and administrative		29.8	%		26.0	%
Advertising		14.1	%		16.7	%
Depreciation and amortization		9.7	%		9.8	%
Gain on sale of center		—			(0.2	)%
Total operating expenses		79.4	%		78.4	%
Income from operations		20.6	%		21.6	%
Interest expense, net		12.9	%		12.3	%
Other income		(0.0	)%		(0.0	)%
Income before income taxes		7.7	%		9.3	%
Income tax expense		2.7	%		2.3	%
Net income		5.0	%		7.0	%
Less: net income attributable to noncontrolling interests		1.6	%		1.7	%
Net income attributable to European Wax Center, Inc.		3.4	%		5.3	%

Comparison of the Thirteen Weeks Ended April 5, 2025 and April 6, 2024

Revenue

Total revenue decreased $0.4 million, or 0.9%, to $51.4 million during the 13 weeks ended April 5, 2025, compared to $51.9 million for the 13 weeks ended April 6, 2024. The decrease in total revenue was largely due to a decrease in transactions at existing centers. The decrease in revenue was partially offset by 11 net new center openings that became operational during the period from April 7, 2024 through April 5, 2025.

Product Sales

Product sales decreased $0.6 million, or 2.1%, to $28.9 million during the 13 weeks ended April 5, 2025, compared to $29.5 million for the 13 weeks ended April 6, 2024. The decrease in product sales was primarily due to a decrease in transactions at existing centers and the removal of a surcharge to franchisees that was put in place during the COVID pandemic to help offset elevated supply chain costs. This decrease in product sales was partially offset by new center openings that became operational during the period from April 7, 2024 to April 5, 2025.

Royalty Fees

Royalty fees of $12.4 million during the 13 weeks ended April 5, 2025 was generally consistent compared to the 13 weeks ended April 6, 2024. Despite an increase of $0.1 million in royalty fees during the 13 weeks ended April 5, 2025 that resulted from 38 new center openings that became operational during the period from April 7, 2024 to April 5, 2025, this increase was offset by a $0.1 million decrease in royalty fees from 27 centers that closed during the same period.

Marketing Fees

Marketing fees increased $0.1 million, or 1.5%, to $7.2 million during the 13 weeks ended April 5, 2025, compared to $7.1 million for the 13 weeks ended April 6, 2024. Marketing fees increased as a result of 38 new center openings that became operational during the period from April 7, 2024 to April 5, 2025 and was partially offset by reductions from 27 centers that closed during the same period.

Other Revenue

Other revenue increased $0.1 million, or 2.8%, to $2.9 million during the 13 weeks ended April 5, 2025, compared to $2.8 million for the 13 weeks ended April 6, 2024. The increase in other revenue was primarily due to an increase in transfer and successor franchise fees, and was partially offset by the sale of a corporate-owned center during the 13 weeks ended April 6, 2024.

Costs and Expenses

Cost of Revenue

Cost of revenue decreased $0.2 million, or 1.8%, to $13.3 million during the 13 weeks ended April 5, 2025, compared to $13.5 million for the 13 weeks ended April 6, 2024. The decrease in cost of revenue was primarily due to the decrease in product sales.

Selling, General and Administrative

Selling, general and administrative expenses increased $1.9 million, or 13.9%, to $15.3 million during the 13 weeks ended April 5, 2025, compared to $13.5 million for the 13 weeks ended April 6, 2024. The increase in selling, general and administrative expenses was primarily due to a $2.2 million increase in payroll and benefits expense and a $0.3 million increase in corporate marketing costs, which was partially offset by a $0.7 million decrease in annual franchisee conference expenses.

The increase in payroll and benefits expense was primarily due to a $1.2 million increase in equity-based compensation expense primarily related to equity grants to newly-hired executives and an equity award to a vendor, as well as $0.7 million in severance expense from management changes.

Advertising

Advertising expenses decreased $1.4 million, or 16.6%, to $7.2 million during the 13 weeks ended April 5, 2025, compared to $8.7 million for the 13 weeks ended April 6, 2024. The decrease in advertising expense was attributable to optimizing our advertising spending as we continue our multi-year transformational investment focused on driving sales growth and improving guest engagement.

Depreciation and Amortization

Depreciation and amortization for the 13 weeks ended April 5, 2025 was generally consistent with the 13 weeks ended April 6, 2024, decreasing $0.1 million, or 2.2%, to $5.0 million.

Interest Expense, net

Interest expense, net increased $0.3 million, or 4.7%, to $6.6 million during the 13 weeks ended April 5, 2025, compared to $6.3 million for the 13 weeks ended April 6, 2024. The increase was primarily due to a decrease in interest income from the Company’s short-term investments during the 13 weeks ended April 5, 2025.

Income Tax Expense

We recorded $1.4 million and $1.2 million of income tax expense for the 13 weeks ended April 5, 2025 and April 6, 2024, respectively. Income tax expense recognized in the 13 weeks ended April 5, 2025 differs from the federal statutory income tax rate primarily as a result of non-taxable income attributable to nondeductible officer compensation, noncontrolling interest, state taxes and the tax effects of stock compensation. Income tax expense recognized in the 13 weeks ended April 6, 2024 differs from the federal statutory income tax rate primarily as a result of non-taxable income attributable to noncontrolling interest, state taxes and the tax effects of stock compensation.

Non-GAAP Financial Measures

In addition to our GAAP financial results, we believe the non-GAAP financial measures EBITDA and Adjusted EBITDA are useful in evaluating our performance. Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are presented for supplemental information purposes only and may be different from similarly titled metrics or measures presented by other companies. A reconciliation of the non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP and a further discussion of how we use non-GAAP financial measures is provided below.

EBITDA and Adjusted EBITDA. We define EBITDA as net income (loss) before interest, taxes, depreciation and amortization. We believe that EBITDA, which eliminates the impact of certain expenses that we do not believe reflect our underlying business performance, provides useful information to investors to assess the performance of our business. We define Adjusted EBITDA as net

income (loss) before interest, taxes, depreciation and amortization, adjusted for the impact of certain additional non-cash and other items that we do not consider in our evaluation of ongoing performance of our core operations. These items include non-cash equity-based compensation expense, non-cash gains and losses on remeasurement of our tax receivable agreement liability, contractual cash interest on our tax receivable agreement liability, transaction costs and other one-time expenses and/or gains. We believe that Adjusted EBITDA is an appropriate measure of operating performance in addition to EBITDA because it eliminates the impact of other items that we believe reduce the comparability of our underlying core business performance from period to period and is therefore useful to our investors in comparing the core performance of our business from period to period. EBITDA and Adjusted EBITDA may not be comparable to other similarly titled captions of other companies due to differences in methods of calculation.

A reconciliation of net income to EBITDA and Adjusted EBITDA is set forth below for the periods indicated:


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
(in thousands)
Net income	$	2,570		$	3,654
Interest expense, net		6,633			6,336
Income tax expense		1,381			1,212
Depreciation and amortization		4,981			5,095
EBITDA	$	15,565		$	16,297
Share-based compensation(1)		2,564			1,382
Remeasurement of tax receivable agreement liability(2)		(2	)		(20	)
Gain on sale of center(3)		—			(81	)
Gain from legal judgment proceeds(4)		—			(80	)
Executive severance(5)		465			—
Reorganization costs(6)		160			—
Adjusted EBITDA	$	18,752		$	17,498

(1)

Represents non-cash equity-based compensation expense.

(2)

Represents non-cash adjustments related to the remeasurement of our tax receivable agreement liability.

(3)

Represents gain on the sale of a corporate-owned center.

(4)

Represents the collection of cash proceeds from a legal judgment.

(5)

Represents cash severance paid or payable to our former chief financial officer.

(6)

Represents costs associated with the Company's return-to-office mandate.

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital needs, capital expenditures, contractual obligations and debt service with cash flows from operations and other sources of funding. Our primary sources of liquidity and capital resources have been cash provided from operating activities, cash and cash equivalents on hand, proceeds from our Class A-2 Notes and Variable Funding Notes and proceeds from the issuance of equity to our stockholders. We had cash and cash equivalents of $58.3 million as of April 5, 2025.

Future payments under the TRA with respect to the purchase of EWC Ventures Units which occurred as part of the IPO and through April 5, 2025 are currently expected to be $204.8 million. Such amounts will be paid when such deferred tax assets are realized as a reduction to income taxes due or payable. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize certain tax benefits to reduce our cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in other expense on the condensed consolidated statements of operations in the period in which the change occurs. During the 13 weeks ended April 5, 2025 there were no material changes in our contractual obligations from those described in our annual report on Form 10-K for the fiscal year ended January 4, 2025.

We believe that our sources of liquidity and capital will be sufficient to finance our continued operations and growth strategy for at least the next twelve months. Our primary requirements for liquidity and capital are working capital, capital expenditures to grow our network

of centers, debt servicing costs, and general corporate needs. We have in the past, and may in the future, refinance our existing indebtedness with new debt arrangements and utilize a portion of borrowings to return capital to our stockholders.

Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results and our future capital requirements could vary because of many factors, including our growth rate, the timing and extent of spending to acquire new centers and expand into new markets, and the expansion of sales and marketing activities. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services and technologies. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations and financial condition would be adversely affected.

Securitized Financing Facility

On April 6, 2022, the Master Issuer completed a securitization transaction pursuant to which it issued $400.0 million in aggregate principal amount of Class A-2 Notes. The net proceeds from the issuance of the Class A-2 Notes were used to repay our previous term loan, fund certain reserve amounts under the securitized financing facility, pay the transaction costs associated with the securitized financing facility, and fund a one-time special dividend to stockholders.

In connection with the issuance of the Class A-2 Notes, the Master Issuer also entered into (i) a revolving financing facility that allows for the issuance of up to $40.0 million in Variable Funding Notes, and certain letters of credit and (2) an advance funding facility with BofA, whereby BofA and any other advance funding provider thereunder will, in certain specified circumstances, make certain debt service advances and collateral protection advances. The Variable Funding Notes were undrawn as of April 5, 2025. The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes.”

The Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Notes are also subject to customary rapid amortization events provided for in the Base Indenture, dated April 6, 2022 (the “Indenture”), including events tied to failure to maintain a stated debt service coverage ratio, the sum of system-wide sales being below certain levels on certain measurement dates, certain manager termination events (including in certain cases a change of control of EWC Ventures, LLC), an event of default and the failure to repay or refinance the Notes on the applicable anticipated repayment date. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments.

For additional information regarding our long-term debt activity, see the notes to the condensed consolidated financial statements (Note 5—Long-term debt) contained elsewhere in this quarterly report on Form 10-Q.

Tax Receivable Agreement

Generally, we are required under the TRA, which is described more fully in Part 1 “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended January 4, 2025 in the section entitled “Risks Relating to Our Organization and Structure—We are required to pay the EWC Ventures’ pre-IPO members for certain tax benefits we may claim, and the amounts we may pay could be significant” to make payments to the EWC Ventures pre-IPO members that are generally equal to 85% of the applicable cash tax savings, if any, that we actually realize (or are deemed to realize, calculated using certain assumptions) as a result of (i) increases in our allocable share of certain existing tax basis of the tangible and intangible assets of the Company and adjustments to the tax basis of the tangible and intangible assets of the Company, in each case as a result of (a) the purchases of EWC Ventures Units (along with the corresponding shares of our Class B common stock) from certain of the EWC Ventures Post-IPO Members using a portion of the net proceeds from the initial and secondary public offerings or in any future offering or (b) Share Exchanges and Cash Exchanges by the EWC Ventures pre-IPO members (or their transferees or other assignees) in connection with or after the initial public offering, (ii) our utilization of certain tax attributes of certain affiliates of General Atlantic (the “Blocker Companies”) (including the Blocker Companies’ allocable share of certain existing tax basis of EWC Ventures’ assets) and (iii) certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA.

Subject to the discussion in the following paragraph below, payments under the TRA will occur only after we have filed our U.S. federal and state income tax returns and realized the cash tax savings from the favorable tax attributes. Future payments under the TRA in respect of future purchases of EWC Ventures Units, Share Exchanges and Cash Exchanges would be in addition to these amounts. Payments under the TRA are computed by reference to realized tax benefits from attributes subject to the TRA and are expected to be funded by tax distributions made to us by our subsidiaries similar to how cash taxes would be funded to the extent these attributes did not exist. To the extent we are unable to make payments under the TRA for any reason (including because the Company’s securitized financing facility restricts the ability of our subsidiaries to make distributions to us), under the terms of the TRA such payments will be deferred and accrue interest until paid. If we are unable to make payments due to insufficient funds, such payments may be deferred indefinitely while accruing interest until paid, which could negatively impact our results of operations and could also affect our liquidity in future periods in which such deferred payments are made.

Under the TRA, as a result of certain types of transactions and other factors, including a transaction resulting in a change of control, we may also be required to make payments to the EWC Ventures pre-IPO members in amounts equal to the present value of future payments we are obligated to make under the TRA. If the payments under the TRA are accelerated, we may be required to raise additional debt or equity to fund such payments. To the extent that we are unable to make payments under the TRA for any reason (including because the Company’s securitized financing facility restricts the ability of our subsidiaries to make distributions to us), under the terms of the TRA Agreement such payments will be deferred and will accrue interest until paid. If we are unable to make payments due to insufficient funds to make such payments, such payments may be deferred indefinitely while accruing interest until paid, which could negatively impact our results of operations and could also affect our liquidity in future periods in which such deferred payments are made.

Summary Statements of Cash Flows

The following table sets forth the major components of our condensed consolidated statements of cash flows for the periods presented (amounts in thousands):


	For the Thirteen Weeks Ended
	April 5, 2025			April 6, 2024
Net cash provided by (used in):
Operating activities	$	12,707		$	10,724
Investing activities		(660	)		105
Financing activities		(3,461	)		(3,186	)
Net increase in cash	$	8,586		$	7,643

Operating Activities

During the 13 weeks ended April 5, 2025, net cash provided by operating activities was $12.7 million and consisted of $2.6 million net income combined with $10.4 million of non-cash items, consisting primarily of depreciation and amortization, equity-based compensation and deferred income taxes and was offset by $0.2 million of net cash used by working capital and other activities. Cash used by working capital and other activities during the 13 weeks ended April 5, 2025 reflected an increase in accounts receivable of $0.6 million, a decrease in accounts payable and accrued liabilities, deferred revenue, and other long-term liabilities of $0.9 million, $0.4 million, and $0.3 million, respectively and was partially offset by decreases in inventory, net and prepaid expenses and other assets of $0.5 million and $1.5 million, respectively. The $2.0 million increase in cash provided by operating activities during the 13 weeks ended April 5, 2025 as compared to the 13 weeks ended April 6, 2024 was primarily the result of increases in net cash provided by working capital and other activities of $1.6 million, and an increase in non-cash items of $1.5 million, and was partially offset by a decrease in net income of $1.1 million.

Investing Activities

During the 13 weeks ended April 5, 2025, we used $0.7 million of cash for purchases of property and equipment, as compared to proceeds received of $0.1 million during the 13 weeks ended April 6, 2024 primarily from the sale of a corporate center.

Financing Activities

Cash used in financing activities was $3.5 million and $3.2 million during the 13 weeks ended April 5, 2025 and April 6, 2024, respectively. Financing activities during the 13 weeks ended April 5, 2025 consisted primarily of the following payments:

•

$1.2 million in tax distribution payments to EWC Ventures members

•

$1.1 million used to repurchase 240,573 shares of Class A common stock

•

$1.0 million repayment on the Class A-2 Notes and

•

$0.2 million in taxes on vested RSUs paid by withholding shares.

Financing activities during the 13 weeks ended April 6, 2024 consisted of the following payments:

•

$1.2 million in tax distribution payments to EWC Ventures members

•

$1.0 million repayment on the Class A-2 Notes

•

$0.7 million in dividend equivalents paid to holders of EWC Ventures Units and

•

$0.3 million in taxes on vested RSUs paid by withholding shares.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no changes to our critical accounting policies and use of estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended January 4, 2025.

JOBS Act

The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. We have elected to use the extended transition period for complying with new or revised accounting standards. This may make it difficult to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Recent Accounting Pronouncements

See Note 2—Summary of significant accounting policies to the condensed consolidated financial statements included in this quarterly report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption and our assessment, to the extent we have made one, of the potential impact of the pronouncements on our financial condition and results of operations and cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our Variable Funding Notes bear interest at a variable rate.

Our Class A-2 Notes bear interest at a fixed rate of 5.50%, and therefore our interest expense related to these notes would not be affected by an increase in market interest rates. Our Variable Funding Notes bear interest at a variable index rate plus an applicable margin. Accordingly, increases in the variable index rate could increase our interest payments under the Variable Funding Notes. However, as the Variable Funding Notes were undrawn as of April 5, 2025 an increase in the variable index rate would not impact on our financial position or results of operations.

Foreign Currency Risk

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have contracted with and may continue to contract with foreign vendors. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

Commodity Price Risk

We are exposed to market risk related to changes in commodity prices. Our primary exposure to commodity price risk is the pricing of our wax purchased from our significant suppliers, which may be adjusted upwards or downwards based on changes in prices of certain raw materials used in the production process.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of April 5, 2025. We conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, management concluded that our disclosure controls and procedures were effective.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting that occurred during the 13 weeks ended April 5, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

We may be the defendant from time to time in litigation arising during the ordinary course of business, including, without limitation, employment-related claims, claims based on theories of joint employer liability, data privacy claims, claims involving anti-poaching allegations and claims made by former or existing franchisees or the government. In the ordinary course of business, we are also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material effect on its financial position, results of operations, or cash flow.

Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including those disclosed in Part I, “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended January 4, 2025. You should carefully consider the risk factors set forth in our 10-K and the other information set forth in this quarterly report on Form 10-Q. You should be aware that these risk factors and other information may not describe every risk that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or operating results. There have been no material changes in our risk factors since our Annual Report on Form 10-K for the year ended January 4, 2025.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Share Repurchases

The following table provides information with respect to our purchases of European Wax Center, Inc. Class A common stock during the first quarter of fiscal year 2025.



Period:	Total Number Shares Purchased(1)		Average Price Paid per Share (including fees)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
January 5, 2025 - February 1, 2025	—		$	—	—		$	9,852,479
February 2, 2025 - March 1, 2025	—		$	—	—		$	9,852,479
March 2, 2025 - April 5, 2025		240,573	$	4.42		240,573	$	8,789,146
Total		240,573	$	4.42		240,573

(1)

In the first quarter of fiscal year 2025, 240,573 shares of Class A common stock were repurchased pursuant to the $50.0 million share repurchase plan authorized by our board of directors on May 13, 2024. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. The Company may terminate the program at any time.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Trading Plans of Our Directors and Officers

During the first quarter of fiscal year 2025, none of the Company’s directors or executive officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each item is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 filed on August 4, 2021).
3.2		Certificate of Amendment of the Registrant’s Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 9, 2023).
3.3		Second Amended and Restated By-Laws of European Wax Center, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 24, 2023).
10.1+		Offer Letter, dated March 6, 2025, by and between Thomas Kim and EWC Corporate, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 11, 2025).
10.2+		Consulting Agreement, dated March 10, 2025, by and between Stacie Shirley and EWC Ventures, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 11, 2025).
10.3+		Separation Agreement, dated March 10, 2025, by and between Stacie Shirley and EWC Ventures, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on March 11, 2025).
10.4+		European Wax Center, Inc. 2025 Inducement Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 21, 2025).
10.5+		Form of Inducement Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 21, 2025).
10.6+		Form of Inducement Option Award Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on March 21, 2025).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** European Wax Center, Inc. is furnishing, but not filing, the written statement pursuant to Title 18 United States

Code 1350, as added by Section 906 of the Sarbanes Oxley Act of 2002, of Christopher Morris, our Chief Executive Officer and Thomas Kim, our Chief Financial Officer.

+ Indicates management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	European Wax Center, Inc.

Date: May 14, 2025	By:	/s/ CHRISTOPHER MORRIS
		Christopher Morris
		Chief Executive Officer and Chairman (Principal Executive Officer)

Date: May 14, 2025	By:	/s/ THOMAS KIM
		Thomas Kim
		Chief Financial Officer
		(Principal Financial Officer)