European Wax Center (EWCZ) Baird 2024 Global Consumer, Technology, & Services Conference summary

Business Overview and Differentiation

• Operates over 1,050 units in the U.S. with a franchise model, generating $1B+ in annual system-wide revenue.

• Largest and fastest-growing branded competitor, 11x bigger in revenue and 6x in unit count than the next largest, with a national footprint six times larger than its nearest competitor.

• Differentiates through proprietary wax, exclusive training, and consistent guest experience across 40-45 states.

• Celebrating 20 years as a category creator in a highly fragmented market.

• Asset-light franchise model drives stable, recurring revenue and strong cash-on-cash returns, with a five-year ramp to maturity and over 50% returns.

Industry Analysis and Market Trends

• The U.S. hair removal market is estimated at $18B, with European Wax Center holding about 5% market share and significant room for growth.

• The market remains fragmented, dominated by independents and beauty salons, presenting a large opportunity for further penetration.

• Scale enables sourcing efficiencies, pricing power, and a competitive moat through proprietary technology, training, and marketing.

• The business model has proven resilient through economic cycles, with strong franchisee demand and guest engagement despite inflation and rising rates.

• Average guest household income exceeds $100K, supporting the brand's value proposition and pricing.

Recent Trends and Operational Initiatives

• Over 75% of sales come from core, routine guests, providing stable revenue; core guests visit 7-8 times per year.

• Marketing strategy revamped with new national and local agencies to attract new guests and improve cost efficiency.

• Operation Elevate embeds field trainers in markets for intensive coaching, driving immediate KPI improvements.

• Franchisees are actively adopting new marketing and operational programs, supported by peer advocacy.

• CRM and predictive modeling increase frequency and retention among Wax Pass and routine guests.