Executive Summary

Q2 2026 (company’s second fiscal quarter ended July 5, 2025): revenue declined 6.6% YoY to $55.9M, while Adjusted EBITDA rose 4.7% to $21.6M as mix and cost discipline expanded margins; same-store sales (SSS) were +0.3% and system-wide sales fell 1.0% .
Versus S&P Global consensus, revenue was slightly below, Adjusted EBITDA was roughly in line, and EPS missed materially as GAAP diluted EPS printed $0.09 vs ~$0.23 estimate*; management cited lower wholesale/retail contribution, Q1 tariff-related order pull-forward, and softer same-day services as headwinds .
Guidance narrowed: FY revenue cut to $205–$209M (from $210–$214M) and SSS to 0–1% (from 0–2%), while Adjusted EBITDA ($69–$71M) and Adjusted Net Income ($31–$33M, ~23% tax) were maintained—implying continued profit resiliency amid tempered top-line .
Management emphasized early traction in its “data-rich marketing engine” (contactability up to 57%, up to ~40% improvement in cost per acquisition) and operational playbooks; West Coast remains challenged while Texas/Florida/NY showed improvement; Wax Pass sales up ~2% YoY .

What Went Well and What Went Wrong

What Went Well
- Margin resilience: Adjusted EBITDA +4.7% YoY to $21.6M; Adjusted EBITDA margin +420 bps to 38.7% on mix, advertising timing and cost discipline .
- Strategic execution signals: CEO highlighted “encouraging early signs” that strategies are taking hold, with improving guest frequency and marketing efficiency; contactability reached 57% (from 38% at start of year) and CPA improved up to ~40% since early 2025 .
- Unit ramping: 2025 openings ramping above pre-pandemic levels under a refined grand-opening playbook, supporting long-term unit growth plans .
What Went Wrong
- Top-line softness: Total revenue -6.6% YoY; system-wide sales -1.0% on weaker same-day services and retail; SSS only +0.3% .
- EPS shortfall vs Street: GAAP diluted EPS $0.09 vs ~ $0.23 estimate*, reflecting lower revenue mix and higher SG&A (payroll/benefits; prior-year legal gain comp) .
- Footprint pressure: Net closures persisted (2 opens, 5 closes in Q2; 7 opens, 15 closes YTD), with 15–16 net closures expected in Q3, continuing 2025 as a “transitional” year .

Financial Results

Note: Q4 FY2024 = 13 weeks ended Jan 4, 2025; Q1 FY2025 = 13 weeks ended Apr 5, 2025; Q2 2026 = company’s Q2 FY2025, 13 weeks ended Jul 5, 2025.

Metric	Q4 FY2024	Q1 FY2025	Q2 2026
Revenue ($USD Millions)	$49.741	$51.427	$55.911
Adjusted EBITDA ($USD Millions)	$18.955	$18.752	$21.613
Adjusted EBITDA Margin %	38.1%	36.5%	38.7%
Net Income ($USD Millions)	$3.073	$2.570	$5.393
GAAP Diluted EPS ($)	N/A	$0.04	$0.09
Same-Store Sales %	0.7%	0.7%	0.3%
System-Wide Sales ($USD Millions)	$229.3	$225.9	$257.6
Centers (End of Period)	1,067	1,062	1,059

Beats/Misses vs S&P Global Consensus (Q2 2026)

Metric	Actual	Consensus*	Surprise ($)	Surprise (%)
Revenue ($USD Millions)	$55.911	$56.800*	-$0.889	-1.6%
Primary EPS ($)	$0.09	$0.2267*	-$0.1367	-60.3%
EBITDA/Adj. EBITDA ($USD Millions)	$21.613	$21.8325*	-$0.2195	-1.0%

Values marked with * retrieved from S&P Global.

Revenue Mix (Company-reported)

Revenue Component ($USD Millions)	Q4 FY2024	Q1 FY2025	Q2 2026
Product Sales	$26.348	$28.871	$30.515
Royalty Fees	$12.780	$12.428	$14.278
Marketing Fees	$7.330	$7.203	$8.108
Other Revenue	$3.283	$2.925	$3.010
Total Revenue	$49.741	$51.427	$55.911

KPIs and Operating Metrics

KPI	Q1 FY2025	Q2 2026
Net Openings (Opens / Closes)	5 / 10	2 / 5
Operating Cash Flow ($USD Millions)	$12.7	$15.2
Net Leverage Ratio (TTM)	4.3x	4.2x
Wax Pass Sales YoY	—	~+2% (season)

Context and drivers:

Revenue/SSS: softer same-day services and retail sales, partial offset from higher cash collected from Wax Pass .
Mix/margins: higher royalty/marketing mix and product margin improvement; advertising timing reduced spend in Q2 .
Tariffs: Q1 franchisee orders were pulled forward in anticipation of tariffs, normalizing Q2 wholesale .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
System-Wide Sales	FY 2025	$940–$960M	$940–$950M	Narrowed (lowered high end)
Total Revenue	FY 2025	$210–$214M	$205–$209M	Lowered
Same-Store Sales	FY 2025	0.0%–2.0%	0.0%–1.0%	Narrowed (lowered high end)
Adjusted EBITDA	FY 2025	$69–$71M	$69–$71M	Maintained
Adjusted Net Income	FY 2025	$31–$33M (new def.)	$31–$33M (new def.)	Maintained
Effective Tax Rate (for Adj. NI)	FY 2025	~23%	~23%	Maintained
Net Center Openings (Gross/Net)	FY 2025	10–12 opens; 28–50 net closures	10–12 opens; 28–50 net closures (15–16 net closures in Q3)	Maintained; Q3 closure cadence raised

Why the changes: Management cited encouraging recent transactions trends but more conservative timing for new guest acquisition initiatives; revenue mix shifts and continued network health support drive slightly lower wholesale/retail contributions while preserving profitability targets .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2024 and Q1 FY2025)	Current Period (Q2 2026)	Trend
Data/technology-driven marketing	“Transitional year”; building a data-rich marketing engine; reiterated in Q1 with guest research and marketing engine progress .	Contactability up to 57% (from 38%), CPA improved up to ~40%; test-and-learn (Champion ad test) with top creatives deployed .	Improving
Supply chain/tariffs	FY2025 to manage supply chain; Q1 noted pull-forward of franchisee orders ahead of tariffs .	Proactive tariff mitigation; Q1 pull-forward normalized Q2 wholesale; margin resilience maintained .	Stable/managed
Regional trends	Not detailed in Q4; Q1 strategic build-out .	West Coast/California still soft; improvement in Texas, Florida, and New York .	Mixed
Unit economics/openings	FY2025 transitional; net closures expected .	2025 openings ramping above pre-pandemic; GO playbook; target return to net unit growth by end of 2026 .	Improving
Product performance/retail	Retail staff “phenomenal” in 2025 YTD (Q&A) .	Launched All Over Deodorant (EWC TREAT) during Q2 (Aug 1) .	Expanding
Labor/cost management	Margin focus reiterated .	Labor is key four-wall cost; focus on volume and guest journey (GSA flow) to drive margin; tools for wax specialists .	Focused execution

Management Commentary

CEO (press release): “Encouraging early signs that our strategies are taking hold… clear focus on three strategic priorities: driving traffic and sales growth, improving four-wall profitability for franchisees, and pursuing thoughtful, profitable expansion.”
CEO (call): “We’re increasingly grounded in data… test to learn mindset… uptick in performance with SSS up 1.7% in June and first five weeks of Q3 up 1.5%” (near-term trend datapoints) .
CFO: “Advertising expense decreased due to timing… Adjusted EBITDA margin increased 420 bps to 38.7% despite top line pressure” .
CEO on regional and product: “California remains challenged… improvement in Texas, Florida, New York… Wax Pass sales up almost 2% year over year” .

Q&A Highlights

New-unit ramping: 2025 class ramping above pre-pandemic levels via refined grand opening playbook; strict operating standards and local store marketing underpin performance .
Closure cadence and path back to growth: Focused on driving frequency, improving operator profitability, and development discipline to minimize closure impact; aim to return to net unit growth by end of 2026 .
Data-led engagement: Segmented routines and targeted reactivation of “down-trend” guests show early success; contactability and personalized messaging driving frequency uplift .
Regional dynamics and Wax Pass: West Coast soft; improvement in TX/FL/NY; Wax Pass up ~2% YoY in peak season .
Labor model: Labor is primary four-wall cost; near-term efficiencies possible in front-of-house flow; long-term lever is volume growth via better tools and technology .

Estimates Context

Q2 2026 results vs S&P Global: Revenue $55.9M vs $56.8M est* (slight miss), Adjusted EBITDA ~$21.6M vs ~$21.8M est* (in line/slight miss), EPS $0.09 vs ~$0.23 est* (miss), driven by lower wholesale/retail mix, softer same-day services, and higher SG&A .
FY2025 Street context: Consensus revenue ~$208.8M*, EBITDA ~$71.8M*, EPS ~$0.59*; company now guides revenue below/prior lower bound and within/around consensus, while EBITDA guidance brackets consensus—suggesting modest revenue estimate trims with EBITDA broadly intact* .
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Profitability intact despite softer sales: Material margin expansion and maintained EBITDA/Adjusted NI guidance underscore cost/mix control and franchise model resilience .
Near-term revenue reset: Lowered FY revenue/SSS ranges reflect conservative timing of new guest acquisition; near-term top-line may lag while initiatives mature .
Execution milestones to watch: Transaction trends, SSS trajectory into 2H, unit closures cadence in Q3 (15–16 expected), and openings’ ramp vs pre-pandemic benchmark .
Marketing engine ROI: Monitor contactability, CPA, and reactivation metrics translating into sustained frequency and new-guest acquisition in late 2025/2026 .
Regional stabilization: West Coast remains an overhang; improvement in TX/FL/NY encouraging—track spread of best practices system-wide .
Capital structure: Net leverage at 4.2x with strong operating cash flow; revolver undrawn—providing flexibility to support transformation and selective buybacks .

Additional Context and Documents

Q2 2026 8-K 2.02 and press release (covering 13 and 26 weeks ended July 5, 2025) .
Q2 2026 earnings call transcript (August 13, 2025) .
Prior two quarters: Q1 FY2025 8-K (May 14, 2025) ; Q4 FY2024 8-K (March 11, 2025) .
Other relevant Q2 press release: EWC TREAT All Over Deodorant launch (Aug 1, 2025) .

European Wax Center, Inc. (EWCZ)·Q2 2026 Earnings Summary