EWCZ Stock Forecast & Price Target

European Wax Center has demonstrated a stable financial performance with WaxPass sales showing nearly 2% year-over-year growth and comparable store sales projected to be flat to up 1%. The company has significantly increased its guest contactability to 57%, enhancing customer engagement through personalized communication, while also benefiting from strategic initiatives that led to core margin gains of up to 170 basis points. Positive trends in operating expenses, highlighted by a 490 basis point expansion in operating margin to 36.1%, suggest an improving profitability outlook as the company anticipates a return to net positive center growth by the end of 2026.

European Wax Center Inc. experienced a decline in total revenue of 2.2% year-over-year, totaling $54.2 million in the third quarter, which fell short of prior expectations despite being slightly better than consensus forecasts. The company's decision to anticipate 12 new center openings contrasted sharply with projected closures of 35-40 centers, resulting in a net loss of 23-28 centers for the upcoming year, highlighting a concerning trend in operational expansion and stability. Additionally, royalty fees decreased by 1.6% year-over-year to $13.2 million while system-wide sales also declined by 0.8%, indicating potential challenges in customer retention and revenue generation for the brand.