European Wax Center has announced a downward revision of their sales and earnings guidance for the year, citing lower-than-expected transactions in the second half of the year.
Adjusted Profit Projection
The franchisor of hair-removal waxing salons now anticipates an adjusted profit of $20.5 million to $21.5 million for 2023. This reflects a decrease from their prior guidance of $22 million to $24.5 million.
Total Annual Revenue Forecast
European Wax Center's total annual revenue is now projected to reach between $217 million and $219 million, which is a decline from their previous forecast of $222 million to $229 million. This adjustment is based on an assumption of same-store sales growth of 1.5% to 2.5%, as opposed to the mid-single-digit growth that was previously expected.
System-Wide Sales Outlook
The outlook for system-wide sales, which includes sales from both franchisee-owned and corporate-owned centers, has also been revised. It is now expected to fall between $945 million and $955 million, compared to the previous range of $965 million to $990 million.
Impact of Inflationary Environment
According to Chief Executive David Willis, European Wax Center has experienced a decline in visits from some less frequent guests due to the continued impact of the heightened inflationary environment. Furthermore, the company's momentum from earlier in the year did not sustain through September.
European Wax Center's adjusted sales and earnings guidance reflects these challenges faced by the company.
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