EWCZ Stock Forecast & Price Target

European Wax Center Inc. has demonstrated steady performance, with WaxPass sales experiencing close to a 2% year-over-year growth and a forecast for same-store sales growth of flat to up 1%. The company has also achieved significant improvements in operational efficiency, evidenced by a 490 basis point expansion in operating margin to 36.1%, surpassing consensus expectations. Moreover, enhanced guest engagement strategies have resulted in increased contactability and measurable performance improvements, setting the stage for anticipated net positive center growth by the end of 2026.

The financial outlook for European Wax Center Inc is concerning, with total revenue in the third quarter decreasing 2.2% year-over-year to $54.2 million, despite outperforming consensus estimates. The company's plans for expansion have shifted dramatically, now expecting 12 new centers but with 35-40 closures, leading to a net reduction in locations that is significantly higher than previous projections. Additionally, system-wide sales saw a decline of 0.8% year-over-year, reflecting stagnation in customer engagement, as evidenced by a 1.6% drop in royalty fees, which could further impede future revenue growth.