Beauty and waxing service franchise European Wax Center (NASDAQ: EWCZ) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 9.3% year on year to $45.1 million. Its GAAP loss of $0.03 per share was significantly below analysts’ consensus estimates.
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European Wax Center (EWCZ) Q4 CY2025 Highlights:
- Revenue: $45.1 million vs analyst estimates of $45.88 million (9.3% year-on-year decline, 1.7% miss)
- EPS (GAAP): -$0.03 vs analyst estimates of $0.04 (significant miss)
- Adjusted EBITDA: $12.68 million vs analyst estimates of $12.77 million (28.1% margin, 0.7% miss)
- Operating Margin: 9.9%, down from 25.8% in the same quarter last year
- Free Cash Flow Margin: 15.6%, down from 32.8% in the same quarter last year
- Same-Store Sales were flat year on year, in line with the same quarter last year
- Market Capitalization: $252.7 million
Company Overview
Founded by two siblings, European Wax Center (NASDAQ: EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, European Wax Center grew its sales at a 14.8% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. European Wax Center’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.3% annually. Note that COVID hurt European Wax Center’s business in 2020 and part of 2021, and it bounced back in a big way thereafter. 
We can dig further into the company’s revenue dynamics by analyzing its same-store sales, which show how much revenue its established locations generate. Over the last two years, European Wax Center’s same-store sales were flat. Because this number is better than its revenue growth, we can see its sales from existing locations are performing better than its sales from new locations. 
This quarter, European Wax Center missed Wall Street’s estimates and reported a rather uninspiring 9.3% year-on-year revenue decline, generating $45.1 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.
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Operating Margin
European Wax Center’s operating margin has been trending down over the last 12 months and averaged 21.4% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
This quarter, European Wax Center generated an operating margin profit margin of 9.9%, down 15.9 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
European Wax Center’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q4, European Wax Center reported EPS of negative $0.03, down from $0.12 in the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from European Wax Center’s Q4 Results
We struggled to find many positives in these results. Its EPS missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $5.75 immediately following the results.
So should you invest in European Wax Center right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
