European Wax Center, Inc.

Thank you for standing by and welcome to the European WAC Center's first quarter 2023 earnings results. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, please press the pound. Oh, sorry. Once again, if you'd like to remove yourself from the queue, simply press star 1 1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Bethany Johns, Director of Investor Relations. Please go ahead.

Thank you and welcome to European WAC Center's first quarter fiscal 2023 earnings call. With me today are David Burke, Chief Executive Officer, David Willis, President and Chief Operating Officer, and Stacey Shirley, Chief Financial Officer. For today's call, David Berg and David Willis will provide a brief overview of our first quarter performance and discuss our priorities for fiscal 2023. Then Stacey will provide additional details regarding our first quarter financial performance and our fiscal 2023 outlook. Following the prepared remarks, David, Stacey, and David will be available to take questions. Before we start, I would like to remind you of our legal disclaimer. We will make certain statements today which are forward-looking within the meaning of the federal securities laws. including statements about the outlook of our business and other matters referenced in our earnings release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings as well as our earnings release issued today for a more detailed description of the risk factors that may affect our results. Please also note that these forward-looking statements reflect our opinions only as of the date of this call. and we take no obligation to revise or publicly release the results of any revision to our forward-looking statements in light of new information or future events. Also during this call, we will discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in our earnings release. A live broadcast of this call is also available on the Investor Relations section of our website at investors.waccenter.com. I will now turn the call over to David Berg.

Thank you, Bethany. Good morning, everyone. Thank you for joining us today. We are pleased to deliver solid Q1 performance in line with our expectations as our saves and dues match for the eighth consecutive quarter since we became a public company in 2021. We generated $218 million in system-wide sales, $50 million in total revenue, and $16.3 million in adjusted EBITDA. representing 6%, 10%, and 8% growth, respectively. We delivered 4.5% same-store sales growth and opened 34 net new centers, the most centers ever opened in a single quarter since the brand was founded in 2004. We continue to drive both of our key growth vectors, unit growth, driven by our franchisees excited about the strong return on invested capital, and in-center sales growth. Our focus on these vectors remains steadfast as we look ahead. And I would like to extend our sincere thanks to our associates and our franchisee partners for their commitment to our ongoing success and for living our values every day. European Wax Center created the category of professionalized out-of-home waxing and continues to be the undisputed leader in a highly fragmented space. Our model is fueled by the recurring nature of hair growth and our loyal guests who consider waxing to be a non-discretionary part of their personal care routines. Our highly trained wax specialists deliver consistent, efficient, and professional services with our unique comfort wax at a reasonable price in clean, hygienic centers. These qualities and our relentless focus on delighting our guests sets European Wax Center apart from others, and our scale is truly unmatched. With almost a thousand centers nationwide offering a high quality inclusive experience, European Wax Center is uniquely positioned to provide out-of-home waxing to every body. And our tech-enabled scheduling and efficient waxing regimen allow our guests to get in and get out as part of their busy days. Our new advertising campaign, launched earlier this month, features distinctive creative visuals that leverage our brand authority to invite all customers to wax with us and reinforces our status as the category expert. Our wax pass program also continues to be a key differentiator. Wax passes provide our guests with a discount for pre-purchasing a body part specific package. For instance, 12 eyebrow waxes for the price of nine during our semi-annual promo periods. Wax Pass holders are our most loyal guests. They make up about 40% of our customers but generate two-thirds of our visits and network sales. With the recent implementation of our enterprise data warehouse and enhanced CRM capabilities, we've been able to identify an additional cohort of routine guests who also visit European Wax Center regularly an average of eight times per year, but who do not currently have a wax pass. Together, both wax pass holders and routine guests drive more than 75% of total visits and network sales. Both cohorts have remained incredibly consistent in their waxing routines in terms of both their frequency and their spend. they continue to view our services as non-discretionary, even in an uncertain macroeconomic environment. In addition, we remain focused on our less frequent episodic guests, where we see an opportunity to improve visit frequency and spend. Our strategic pillars are unchanged, and we are deploying additional levers to drive transactions and basket size in 2023 that gives us confidence in reiterating our full-year guidance. David Willis will cover these in more depth in a moment. We expect these efforts, coupled with our unit expansion, to enable us to generate long-term revenue growth, leverage our fixed cost profile for EBITDA margin expansion, and generate significant free cash flow over time. all of which translates to significant value creation for European WAC Center's franchisees and our shareholders. With that, I'd like to turn the call over to our President and COO, David Willis, to discuss recent trends and our two key growth vectors, expanding our footprint through new center growth and driving in-center sales. David, over to you.