European Wax Center Offers an Opportunity for Aggressive Investors

European Wax Center Inc. operates in a market that still has lots of growth potential—but it’s highly competitive.

A Member of Pat McKeough’s Inner Circle recently asked for his advice on European Wax Center Inc., the largest franchisor and operator of out-of-home waxing services in the U.S. with 1,059 locations nationwide.

Pat likes the firm’s market-leading position and its franchise model which generates asset-light revenue streams with solid profit margins. However, he notes the firm is experiencing sales headwinds with more store closures than openings.

European Wax Center Inc. (Symbol EWCZ on Nasdaq; www.waxcenter.com) is a leading franchisor of out-of-home hair removal services. The company currently has 1,059 centres.

Founded in 2004 by brothers David and Joshua Coba, European Wax Center offers waxing services and its own line of products. These include products designed to soothe skin pre- and post-waxing, prevent blemishes, and slow hair regrowth. The company also earns considerable recurring revenue through its Wax Pass program, which allows guests to prepay for a set number of visits or an unlimited number.

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European Wax went public in August 2021, selling 10.6 million shares at $17 each. Since then, its shares have fallen by 79%.

The company expanded its product portfolio with the launch of EWC TREAT All Over Deodorant in July 2025. This aluminum-free, full-body deodorant features glycolic acid, prebiotics, and narcissus bulb extract to neutralize odor and reduce hair thickness between waxes.

European Wax Center operates in a very competitive market

In the quarter ended July 5, 2025, European Wax Center’s revenue fell 6.6%, to $55.9 million from $59.9 million a year earlier. Franchisees opened 2 and closed 5 centres in the latest quarter.

Excluding one-time items, the company earned $11.8 million in the quarter, up 5.6% from $11.1 million. Lower costs pushed up profits. Due to fewer shares outstanding, earnings per share grew 17.4%, to $0.27 from $0.23.

The fragmented market for out-of-home waxing services still has lots of growth potential. And to take advantage of that market, European Wax Center aims to quadruple its U.S. store count in the next 15 years. It estimates that it currently serves just 4% of the total waxing market.

Nonetheless, it’s still a very competitive business, especially for sales of extra personal-care products, which can be easily bought online.

Recommendation in Pat’s Inner Circle: European Wax Center Inc. is okay to hold, but only for highly aggressive investors.

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