European Wax Center FY 2025 Earnings Snapshot

European Wax Center (EWCZ) just turned in its latest FY 2025 scorecard with Q3 revenue of about US$54.2 million and basic EPS of roughly US$0.09, giving investors fresh numbers to weigh against a trailing twelve month EPS of US$0.26 on US$211.3 million of revenue. Over recent quarters the company has seen revenue move from US$49.7 million in Q4 FY 2024 to US$51.4 million in Q1 FY 2025 and US$55.9 million in Q2 FY 2025. Over the same period, quarterly EPS ranged from about US$0.04 to just over US$0.09. Together, these figures frame a results season where the key question is how sustainably the company can defend and build on its current margin profile.

See our full analysis for European Wax Center.

With the latest numbers on the table, the next step is to set them against the dominant narratives around growth, profitability and risk to see which views still hold up and which might need a rethink.

Margins Steady With 5.4% Net Profit

• On a trailing twelve month basis, European Wax Center earned US$11.4 million of net income on US$211.3 million of revenue, which works out to a 5.4% net profit margin compared with 5.0% a year earlier.
• Consensus narrative highlights a push toward higher-margin, recurring revenue through Wax Pass memberships and retail products. The current 5.4% margin, alongside quarterly net income between US$1.4 million and US$4.4 million, gives a concrete yardstick for judging whether that push is translating into better profitability over time.
  • Analysts see margin potential from improved cost per acquisition and more efficient marketing. The latest quarters show EPS in a tight band around US$0.09 in Q2 and Q3 FY 2025, which investors can use to check how resilient those margins really are.
  • At the same time, rising SG&A and labor costs are flagged as pressure points in the consensus view. The modest lift from a 5.0% to 5.4% trailing margin helps frame how much headroom there currently is before those costs start to squeeze net income.

P/E Premium With Weak Interest Cover

• The shares trade on a P/E of 22x compared with a peer average of 12.6x and a US Consumer Services industry average of 17.8x, while interest coverage is described as weak because interest payments are not well covered by earnings.
• Bears focus on that premium multiple and leverage risk, arguing that higher labor costs and center closures could pressure earnings. The fact that trailing net income is US$11.4 million with a 5.4% margin helps explain why a rich 22x P/E and weak interest cover stand out as key issues.
  • Critics point out that if earnings growth slows from the historic 66% five-year pace, the current P/E premium over peers could be hard to justify while the company still contends with a leverage ratio above 4x and limited room to absorb shocks.
  • The combination of soft one year earnings growth at 1.6%, relatively thin margins and recent share price volatility over the last three months lines up with the bearish concern that downside risk sits mostly on the balance sheet and valuation side rather than in the recent quarterly EPS prints.

On top of those concerns, some investors will want to see how cautious scenarios could play out if center closures and at home alternatives keep chipping away at traffic, and the full bear case sets out that thinking in more detail in the 🐻 European Wax Center Bear Case

DCF Upside Versus 1.6% Earnings Growth

• Over the last twelve months, earnings growth is reported at 1.6%, yet a DCF fair value of about US$10.30 compares with a current share price of US$5.73, suggesting the stock trades roughly 44.4% below that modelled value.
• Bulls point to that gap and to five year average earnings growth of 66% a year as support for a more optimistic view. The contrast between the strong multi year record and the recent 1.6% growth rate is exactly what they argue could normalize if marketing efficiency gains and higher visit frequency feed through.
  • Supporters highlight that trailing revenue of roughly US$211.3 million and EPS of US$0.26 give the business some scale, and argue that improvements like a 40% better cost per acquisition could help turn that scale into faster profit growth than the latest year suggests.
  • At the same time, the market pricing on a 22x P/E and the wide spread between the US$5.73 share price and the US$10.30 DCF fair value show how different valuation tools can tell different stories, which is central to the bullish argument that current pricing may not fully reflect the underlying earnings power.

If you want to see how upbeat investors connect these numbers to a longer term story for the business, the full bull case lays it out in 🐂 European Wax Center Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for European Wax Center on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With all of that in mind, are you feeling more cautious or optimistic about where this story could head next? And are you ready to pressure test that view against the numbers that matter most, including 2 key rewards and 2 important warning signs

See What Else Is Out There

European Wax Center pairs a premium 22x P/E and weak interest cover with thin 5.4% margins and only 1.6% reported earnings growth over the last year.

If balance sheet fragility and earnings pressure worry you, take a moment to run the numbers on 77 resilient stocks with low risk scores that aim to pair more resilient finances with steadier performance.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.