European Wax Center, the leading franchisor of hair-removal waxing salons, has released its financial results for the third quarter. Despite higher sales, the company experienced a drop in profit due to increased expenses.
- Profit for the quarter was $4.2 million, compared to $5.3 million in the same period last year.
- Adjusted earnings, excluding stock-based compensation and other one-time items, amounted to $6.1 million.
- Total revenue saw a modest increase of 1.2% to $55.7 million, falling short of analyst forecasts of $59 million.
During the quarter, European Wax Center successfully franchised 23 new centers, bringing its total store count to 1,026 – a significant growth of over 12% compared to the previous year.
Robust Sales Performance
System-wide sales, which combine sales from both franchisee-owned and corporate-owned centers, experienced a healthy growth of 2.4% to reach $240.7 million.
Factors Impacting Profit
Despite the positive sales performance, European Wax Center faced challenges that impacted its bottom line. Overhead expenses rose by 5.2% during the quarter. Additionally, a new $1.8 million tax expense further affected the company's profitability.