European Wax Center, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to European WAC Center's first quarter fiscal 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. In order to facilitate as many participants as possible, we ask that you please limit yourself to one question and one follow-up during the Q&A session. If you have additional questions, you may rejoin the queue. On the call today are Chris Morris, Chairman and Chief Executive Officer, and Tom Kim, Chief Financial Officer. I would now like to turn the conference over to Bethany Johns, Director of Investor Relations. Ma'am, you may begin.

Good morning, everyone. Thank you and welcome to European WAC Center's first quarter fiscal year 2025 earnings call. On today's call, Chris Morris will provide an update on his first full quarter with the company and discuss additional details regarding progress made on our priorities. Then, Tom will discuss our first quarter performance and fiscal 2025 outlook. Following the prepared remarks, the team 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.waxcenter.com. I will now turn the call over to Chris Morris. Chris?

Okay, thank you, Bethany, and good morning, everyone. Thank you for joining us to discuss European Wax Center's first quarter 2025 financial performance. I'm pleased to share that we delivered solid first quarter results of 225.9 million in system-wide sales, 70 basis points of positive same-store sales growth, and 18.89 in adjusted EBITDA. These results demonstrate that our guests value our unparalleled waxing services and our businesses on the right track, enabling us to reiterate our outlook today. At the same time, we recognize the consumer backdrop and supply chain environment remain uncertain. I want to emphasize that the fundamentals of our model remain strong, and we are actively managing these dynamics, which Tom will speak to in the second half of today's call. But first, I'd like to take a moment to share a few reflections from my first 100 days with EWC. Over the past few months, I've spent a lot of time visiting centers across some of our largest markets, coast to coast from New York and New Jersey to Florida and California and several states in between. I've been interfacing heavily with our franchise partners, associates, guests, and stakeholders with a goal of understanding our competitive advantages and setting the priorities for sustainable growth. As a result, my belief in EWC's potential has never been stronger. I'm invigorated by the passion we all share for this iconic brand and the incredible work our talented franchisees and associates do each day to deliver the unparalleled guest experience unique to European WAC Center. My first 100 days haven't just been a period of listening and learning. They've also been a time of action. As I mentioned last quarter, it's evident that we have a lot of opportunities to solidify the foundation of this business. We've already taken a lot of steps designed to improve execution, strengthen operations, and build momentum. I believe 2025 is a reset year, but let me be clear. What we need to do to reignite our growth isn't complex because the core of our concept remains strong. We need to focus on the basics, bring energy back to the brand, and ensure we have the tools needed to execute flawlessly. This includes modernizing the marketing engine, making sure franchisees are set up for success, and being disciplined and strategic in our approach to new center expansion. Together with my new executive team, we are sharpening our vision for the future. We continue to ground our actions in driving sales, improving four wall profitability, and reigniting unit growth, which I believe are critical to delivering near-term results and thus positioning us to revitalize our long-term growth story. I'm incredibly proud of the progress we've made on each of these priorities over the past two months, and I'm excited to walk you through our accomplishments and our action plans for Q2 and beyond. First, driving sales through traffic growth. Our core guests continue to love European Wax Center and remain stable, but to increase four-wall sales and profitability, We need to drive more new guests and get non-core guests to visit us more often. And to do that well, we are building a data rich digital first marketing engine underpinned by clear and relevant brand identity. Our marketing team is acting with conviction to deliver near-term wins by laying the groundwork to fuel sustainable long-term sales growth. We are methodically and deliberately approaching this effort from a few angles. We began in Q4 by building the measurement foundation to truly understand our advertising effectiveness and support a modern approach to marketing. We introduced that technology in Q1, and as a result, we are leveraging our data with our digital and social media partners better than ever before, enabling our media dollars to be more efficient and lowering our cost per acquisition. Most importantly, we're seeing early signs of traction with new guests. On a two-year basis, 2025 new guest trends have improved each month given us confidence that we're headed in the right direction. In terms of non-core guests, we're significantly increasing our ability to engage with them through email and SMS, which should enable us to unlock additional visits. This is a great example of the kind of basic sharpen the edges opportunities we have uncovered, which we anticipate will result in better guest engagement. We're still not where we need to be, but we're pleased with the progress we've made so far. To drive new guest acquisition for the long term, we are redefining our target guest profile and reinvigorating our brand identity. We performed extensive research and testing in Q1 that has given us three valuable insights. First, out-of-home waxing still represents a large and stable addressable market. Second, we can cast a wider net with new guests by leaning into those who offer a higher lifetime value and are more profitable and more likely to be retained. And third, we can deliver a clear message that better resonates with the high-value guests I just described. Armed with this new information, we are taking immediate action to improve marketing content this quarter. The initial phase of refining our message and creative assets is already underway with a new champion ad expected to be live for the peak summer waxing season. We plan to launch bigger, more holistic brand strategy work later this year. Together with improvements we've made leveraging data and lowering our cost of acquisition, we expect to refine our marketing mix and more effectively drive traffic in the second half of 2025. As a reminder, this is a key assumption in the high end of our outlook. Our second area of focus is cultivating a more effective corporate infrastructure to support franchisees, facilitating higher four-wall profitability through operational excellence. We realize franchisees are the primary customers we serve and their success drives our success. Our immediate priority is to narrow the gap between underperforming centers and the broader network. We've increased the capacity of our franchisee support team, and we're spending more time working hand in hand with operators. We recently deployed new tools that offer enhanced tracking, accountability, and transparency, making it easier than ever for both us and our franchise partners to see opportunities and action plans. Our operations team is also driving 50% more engagement with our learning management system. Combined, these actions have started to generate KPI improvement in underperforming centers. Regarding our long-term goal of operational excellence, we've made progress on our search for a strong chief operating officer to evolve our structure and processes. We also look forward to engaging with our partners next week at our annual franchisee event where we will reinforce our aligned focus on reigniting sustainable, profitable growth, both at the individual center level and across the network as a whole. Moving to my third focus area, implementing a more sophisticated development approach focused on thoughtful, profitable expansion. We continue to partner closely with franchisees to evaluate near-term growth plans while prioritizing long-term network health. To prepare for 2026 new center openings, we've identified under-penetrated trade areas with strong existing demand for out-of-home hair removal, which we believe will pave the way for franchisees to resume unit growth while best positioning their centers for success. Longer term, we plan to utilize a more strategic development approach. We've upgraded our market planning tool to a purpose-built solution with enhanced analytics and forecasting capabilities. This leap in sophistication should enable us to more accurately model new site potential moving forward. We've also implemented a rigorous site approval process for new centers. We believe that both of these actions should enable better new center performance and support more sustainable growth over time. Ultimately, we remain confident that our efforts to drive sales and improve four-wall profitability will best position the network to return to net unit growth by the end of 2026. And last but not least, we've made substantial progress in assembling a team of seasoned leaders who will help execute these priorities for 2025 and beyond. Our Chief Commercial Officer Katie Mullen and Chief Information and Digital Officer Chris Andrews officially joined at the end of Q1 and are off to a running start. And they've done a tremendous amount of work in the short time they've been with us. And finally, I'm excited to introduce Tom Kim, our new Chief Financial Officer for the first time today. Tom joined us last month and is a strategic CFO with franchise experience and a history of driving profitable growth. He will be a valuable and impactful partner in executing our strategic priorities and reigniting growth for European WAC Center. And I look forward to all of you getting to know him better in the coming weeks and months. So with that, I'll pass things over to Tom to review our Q1 financial results and our outlook for 2025. Tom? Thank you, Chris.