EWCZ Stock Forecast & Price Target

European Wax Center Inc. demonstrates a solid financial outlook, as evidenced by its ability to manage SG&A expenses effectively, which came in at 28.5%, outperforming consensus expectations of 29.1%. Furthermore, the company achieved a year-over-year gross margin expansion of 50 basis points to 32.9%, driven by optimized promotional events, despite being below the consensus estimate. Additionally, with the expected positive impacts from the Easter calendar shift and ongoing initiatives aimed at enhancing customer experience and product offerings, the company's topline growth is anticipated to accelerate in the second half of the year.

European Wax Center's stock faces a negative outlook primarily due to declining net sales, which fell 9.4% year-over-year to $5.397 billion, highlighting challenges in revenue generation amidst an expected continued decrease in mature centers. The company's guidance for FY25 anticipates a contraction of 5%-7% in net sales, starkly contrasting with prior expectations for flat revenue growth. Additionally, the decline in cash holdings, from $183 million in the previous year to $134 million, raises concerns about liquidity and operational stability.