Dj European Wax Center Inc Cl A, Inst Holders, 3Q 2025 (Ewcz)

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Leisure Products company Harley-Davidson jumped 4%. Is now the time to buy Harley-Davidson? Access our full analysis report here, it’s free for active Edge members.
• Specialized Consumer Services company Mister Car Wash jumped 4.2%. Is now the time to buy Mister Car Wash? Access our full analysis report here, it’s free for active Edge members.
• Home Furnishings company Leggett & Platt jumped 4.2%. Is now the time to buy Leggett & Platt? Access our full analysis report here, it’s free for active Edge members.
• Travel and Vacation Providers company Hilton jumped 4%. Is now the time to buy Hilton? Access our full analysis report here, it’s free for active Edge members.
• Leisure Facilities company European Wax Center jumped 4.1%. Is now the time to buy European Wax Center? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Mister Car Wash (MCW)

Mister Car Wash’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 3.1% as investors continued to pile into value-oriented names amid growing valuation concerns. This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced.Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over.The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.

Mister Car Wash is down 30.6% since the beginning of the year, and at $5.05 per share, it is trading 40.6% below its 52-week high of $8.49 from February 2025. Investors who bought $1,000 worth of Mister Car Wash’s shares at the IPO in June 2021 would now be looking at an investment worth $248.52.

European Wax Center delivered third quarter results that exceeded Wall Street expectations, prompting a strong positive market reaction. Management highlighted disciplined cost control, improved operational efficiency, and a stable core guest base as critical contributors to the quarter’s outperformance. CEO Chris Morris emphasized, “Retention is stable quarter over quarter, fewer guests are lapsing, and engagement in our Wax Pass program remains strong, which is an enduring source of strength for us.” Enhanced data-driven marketing and ongoing efforts to optimize franchisee operations underpinned the company’s improved profitability.

Is now the time to buy EWCZ? Find out in our full research report (it’s free for active Edge members).

European Wax Center (EWCZ) Q3 CY2025 Highlights:

• Revenue: $54.19 million vs analyst estimates of $52.75 million (2.2% year-on-year decline, 2.7% beat)
• Adjusted EPS: $0.16 vs analyst estimates of $0.10 (60% beat)
• Adjusted EBITDA: $20.17 million vs analyst estimates of $15.76 million (37.2% margin, 28% beat)
• The company reconfirmed its revenue guidance for the full year of $207 million at the midpoint
• EBITDA guidance for the full year is $70 million at the midpoint, below analyst estimates of $71.23 million
• Operating Margin: 25.6%, up from 17.1% in the same quarter last year
• Locations: 1,053 at quarter end, down from 1,064 in the same quarter last year
• Same-Store Sales were flat year on year, in line with the same quarter last year
• Market Capitalization: $160.8 million

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From European Wax Center’s Q3 Earnings Call

• Josh Young (Truist): asked about the quantifiable lift from revamped marketing efforts in re-engaging less frequent guests. CEO Chris Morris noted improved ability to contact and engage guests, with meaningful progress in visit frequency, though he declined to share specific frequency numbers.
• Dana Telsey (Telsey Advisory Group): inquired about core consumer trends and regional performance, as well as Wax Pass sales. Morris responded that the core guest base remains stable with slight growth in Wax Pass sales, and highlighted relative regional consistency, with improvement seen in California and continued softness in New York, Philadelphia, and DC.
• Dana Telsey (Telsey Advisory Group): also questioned future center closures and openings, including differences in cost or configuration. Morris explained closures are being narrowed and are mostly tied to low-volume units, while new center growth is expected to resume toward the end of next year.
• Alex Conway (Baird): asked about the main reasons behind unit closures and confidence in reducing closure pressures next year. Morris cited primarily low-volume units and improved franchisee partnerships, with growing confidence due to increased visibility into center health and operational alignment.
• Simeon Goodman (Morgan Stanley): pressed for insight into ongoing new guest acquisition challenges and whether traffic or ticket growth is more critical. Morris attributed acquisition difficulties to the need for better analytics and marketing execution, and emphasized that long-term sustainable growth will require both increased traffic and smart ticket growth through targeted marketing and add-ons.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will be monitoring (1) progress in scaling new guest acquisition and effectiveness of influencer and brand marketing initiatives, (2) improvements in franchisee unit economics and reduced closure rates, and (3) consistent execution of operational strategies that drive visit frequency among existing guests. Additionally, we will watch for signs of margin stability despite ongoing cost pressures and indicators that development momentum is building toward positive net center growth.

European Wax Center currently trades at $3.68, in line with $3.65 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

Our Favorite Stocks Right Now

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

What Happened?

Shares of beauty and waxing service franchise European Wax Center fell 4.3% in the morning session after the stock's negative momentum continued as the company reported third-quarter results that showed declining year-over-year revenue and a net reduction in its store count, signaling underlying business weakness. 

Although the company's revenue of $54.2 million and its profit of $0.09 per share beat Wall Street's expectations, total revenue still fell by 2.2% compared to the same period in the previous year. The decline was partly attributed to a net decrease in its locations, as franchisees closed nine centers while opening only three. The company also projected a net loss of 23 to 28 centers for the full fiscal year. Furthermore, system-wide sales saw a slight decline of 0.8%, and the company noted it faced challenges in attracting new customers. While European Wax Center reaffirmed its full-year financial guidance, the negative trends in sales and its physical footprint appeared to weigh on investor sentiment.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy European Wax Center? Access our full analysis report here.

What Is The Market Telling Us

European Wax Center’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 15.8% on the news that the company reported third-quarter 2025 financial results that surpassed Wall Street's expectations on profit and revenue. Although revenue declined 2.2% year on year to $54.2 million, the figure still topped analysts' forecasts. The company's profitability was a key highlight for the quarter. GAAP earnings per share of $0.09 was more than double the consensus estimate of $0.04. Furthermore, adjusted EBITDA, a key measure of profitability, came in at $20.2 million, handily beating expectations of $15.7 million. While the company reaffirmed its full-year revenue outlook, its full-year EBITDA guidance was slightly below analysts' projections. Overall, the strong bottom-line performance appeared to outweigh the mixed guidance, driving investor optimism.

European Wax Center is down 36.9% since the beginning of the year, and at $4.01 per share, it is trading 49.9% below its 52-week high of $8.01 from November 2024. Investors who bought $1,000 worth of European Wax Center’s shares at the IPO in August 2021 would now be looking at an investment worth $187.61.

Beauty and waxing service franchise European Wax Center beat Wall Street’s revenue expectations in Q3 CY2025, but sales fell by 2.2% year on year to $54.19 million. The company expects the full year’s revenue to be around $207 million, close to analysts’ estimates. Its non-GAAP profit of $0.16 per share was 60% above analysts’ consensus estimates.

Is now the time to buy EWCZ? Find out in our full research report (it’s free for active Edge members).

European Wax Center (EWCZ) Q3 CY2025 Highlights:

• Revenue: $54.19 million vs analyst estimates of $52.75 million (2.2% year-on-year decline, 2.7% beat)
• Adjusted EPS: $0.16 vs analyst estimates of $0.10 (60% beat)
• Adjusted EBITDA: $20.17 million vs analyst estimates of $15.76 million (37.2% margin, 28% beat)
• The company reconfirmed its revenue guidance for the full year of $207 million at the midpoint
• EBITDA guidance for the full year is $70 million at the midpoint, below analyst estimates of $71.23 million
• Operating Margin: 25.6%, up from 17.1% in the same quarter last year
• Locations: 1,053 at quarter end, down from 1,064 in the same quarter last year
• Same-Store Sales were flat year on year, in line with the same quarter last year
• Market Capitalization: $180.5 million

StockStory’s Take

European Wax Center delivered third quarter results that exceeded Wall Street expectations, prompting a strong positive market reaction. Management highlighted disciplined cost control, improved operational efficiency, and a stable core guest base as critical contributors to the quarter’s outperformance. CEO Chris Morris emphasized, “Retention is stable quarter over quarter, fewer guests are lapsing, and engagement in our Wax Pass program remains strong, which is an enduring source of strength for us.” Enhanced data-driven marketing and ongoing efforts to optimize franchisee operations underpinned the company’s improved profitability.

Looking ahead, management’s outlook is anchored in driving new guest acquisition and increasing visit frequency among existing clients. Morris noted, “Our focus now is on relevance, creating consistent, personalized communication with guests that more directly speak to our guests about what matters to them.” The leadership team is also prioritizing operational excellence, with new initiatives aimed at supporting franchisees and refining brand positioning to better engage high-value audiences. These strategies are expected to shape the company’s growth trajectory and help return to net positive center growth by the end of next year.

Key Insights from Management’s Remarks

Management credited margin improvement to targeted marketing, franchisee support, and operational adjustments, while acknowledging the need to strengthen new guest acquisition.

• Data-driven marketing refinement: European Wax Center sharpened its marketing approach, eliminating underperforming tactics and focusing on channels that deliver higher guest engagement and efficiency. Management cited new structured guest lifecycle campaigns and enhanced reporting for franchisees, which provide actionable insights into visit frequency and guest retention.
• Guest retention and engagement: Stability in the core guest base, with a slight uptick in Wax Pass sales, was highlighted as a foundation for future growth. The company improved its ability to contact guests—rising from 38% to 60%—which CEO Chris Morris explained enables more effective outreach and frequency campaigns.
• Operational leadership changes: The appointment of Angela Jaskolski as Chief Operating Officer brought greater focus to in-center operational excellence and franchisee support. Jaskolski’s efforts include hands-on coaching and granular operational analysis to improve guest experience and profitability at the unit level.
• Center closures and portfolio health: Management narrowed expected center closures, attributing this to improved franchisee partnerships and proactive analysis of underperforming locations. Most closures are concentrated among persistently low-volume units affected by factors such as real estate quality and local market dynamics.
• Brand investment and influencer strategy: European Wax Center introduced a revamped influencer strategy—showing a 75% increase in efficiency—and engaged a new brand agency partner to refine messaging and connect better with target audiences. These initiatives are already delivering higher website engagement and are expected to play a major role in growth plans for 2026.

Drivers of Future Performance

Management’s outlook centers on growing guest traffic and enhancing franchisee unit economics while mitigating cost pressures.

• New guest acquisition focus: Leadership acknowledged ongoing challenges in attracting new guests and outlined plans to leverage improved analytics, personalized marketing, and a refreshed brand identity. The company is optimistic that these efforts, combined with a new influencer strategy and agency partnerships, will drive higher-quality guest acquisition, especially in underpenetrated markets.
• Operational improvement for franchisees: The company is increasing support for franchisees through expanded training, better data, and targeted operational initiatives. By equipping franchisees with tools to drive local performance and close profitability gaps, management aims to reduce closure risk and return to net positive center growth by year-end 2026.
• Cost management and supply chain flexibility: Management continues to prioritize cost discipline, particularly in advertising and supply chain optimization. Ongoing efforts to diversify sourcing and manage tariffs are expected to help maintain margins, while technology investments are being evaluated for further operational upside.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will be monitoring (1) progress in scaling new guest acquisition and effectiveness of influencer and brand marketing initiatives, (2) improvements in franchisee unit economics and reduced closure rates, and (3) consistent execution of operational strategies that drive visit frequency among existing guests. Additionally, we will watch for signs of margin stability despite ongoing cost pressures and indicators that development momentum is building toward positive net center growth.

European Wax Center currently trades at $4.31, up from $3.65 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

High Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return).

What Happened?

Shares of beauty and waxing service franchise European Wax Center jumped 15.8% in the morning session after the company reported third-quarter 2025 financial results that surpassed Wall Street's expectations on profit and revenue. Although revenue declined 2.2% year on year to $54.2 million, the figure still topped analysts' forecasts. The company's profitability was a key highlight for the quarter. GAAP earnings per share of $0.09 was more than double the consensus estimate of $0.04. Furthermore, adjusted EBITDA, a key measure of profitability, came in at $20.2 million, handily beating expectations of $15.7 million. While the company reaffirmed its full-year revenue outlook, its full-year EBITDA guidance was slightly below analysts' projections. Overall, the strong bottom-line performance appeared to outweigh the mixed guidance, driving investor optimism.

Is now the time to buy European Wax Center? Access our full analysis report here.

What Is The Market Telling Us

European Wax Center’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. But moves this big are rare even for European Wax Center and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 19 days ago when the stock gained 3.1% on the news that a cooler-than-expected inflation report fueled optimism for potential Federal Reserve rate cuts. The September Consumer Price Index (CPI) rose 3.0% year-over-year, coming in just below the 3.1% analysts had forecast. While still above the Federal Reserve's 2% target, investors interpreted the slight cooling as a sign that inflationary pressures may be easing, potentially giving the central bank room to consider interest rate cuts in the near future. Sectors that are typically sensitive to interest rates, such as real estate and utilities, saw a notable lift. Lower rates can reduce borrowing costs and increase the appeal of dividend-paying stocks, boosting investor confidence in these areas.

European Wax Center is down 34.4% since the beginning of the year, and at $4.18 per share, it is trading 49.6% below its 52-week high of $8.28 from November 2024. Investors who bought $1,000 worth of European Wax Center’s shares at the IPO in August 2021 would now be looking at an investment worth $195.18.