European Wax Center (NASDAQ:EWCZ), a top franchisor of out-of-home waxing services, reported its Q3 FY2023 results , showing a modest revenue increase of 1.2% to $55.7 million despite challenging economic conditions. The company expanded its footprint by 12.6%, amounting to a total of 1,026 centers across 45 states.
Financial performance exhibited a 2.4% system-wide sales increase to $240.7 million and a 3.4% rise in same-store sales. However, GAAP net income decreased by 20.7% to $4.2 million, and Adjusted net income fell by 9.9% to $6.1 million due to increased tax expenses.
CEO David Willis acknowledged the impact of inflation on consumer behavior, leading to fewer visits from infrequent customers but highlighted the stability of recurring revenue streams from core customers. As a result, the fiscal 2023 outlook was revised with net center openings projected between 98 to 100, system-wide sales from $945 million to $955 million, and total revenue between $217 million to $219 million.
As of September 30, European Wax Center reported cash and equivalents of $64.0 million and outstanding borrowings of $395.0 million under senior secured notes. The net cash provided by operating activities totaled $17.6 million during the quarter.
The company made a correction to the previously reported non-GAAP Adjusted net income due to a calculation error in tax expenses. Despite these challenges, the company's category-leading position and proprietary products continue driving its expansion and market presence.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.