What Happened?
Shares of beauty and waxing service franchise European Wax Center (NASDAQ: EWCZ) fell 3% in the afternoon session after the company announced a shake-up in its executive leadership team, appointing a new Chief Operating Officer and Chief Development Officer. European Wax Center named Angela Jaskolski as its new COO and Kurt Smith as Chief Development Officer. Jaskolski previously served as Chief Store Officer at hair care brand Madison Reed, while Smith comes from Yum! Brands, where he was a Vice President and General Manager for Pizza Hut. The appointments are part of a broader strategy to enhance operations and drive growth. The stock's decline may reflect investor reaction to the management changes during what the company has called a "transitional year." European Wax Center is facing a challenging consumer environment for discretionary spending and plans to close between 40 and 60 centers in 2025. The leadership overhaul introduces new variables as the company works to stabilize its franchisee network and return to net unit growth.
The shares closed the day at $5.02, down 2.6% from previous close.
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What Is The Market Telling Us
European Wax Center’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 14.7% on the news that the company reported impressive first quarter 2025 results, which blew past analysts' sales, earnings, and EBITDA estimates. The beat came from a rebound in customer spending and a small increase in store count, which helped push system-wide sales up even though revenue was mostly flat. On the cost side, the company cut back on advertising, which helped offset increased expenses tied to leadership changes. For the rest of the year, the company stuck to its sales and profits forecasts, aiming for more profit growth even though it's closing more stores than it planned to open. Overall, we think this was a decent quarter with some key metrics above expectations.
European Wax Center is down 21.1% since the beginning of the year, and at $5.02 per share, it is trading 49.3% below its 52-week high of $9.90 from July 2024. Investors who bought $1,000 worth of European Wax Center’s shares at the IPO in August 2021 would now be looking at an investment worth $234.69.
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