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PLANO, Texas - European Wax Center, Inc. (NASDAQ:EWCZ), a leading personal services company, announced the resignation of David Willis from its board of directors, effective immediately. The departure coincides with his previously disclosed resignation as Chief Executive Officer.
The company disclosed on Monday that Willis’s resignation from the board took effect on August 15, 2024. In line with his departure, Willis has entered into a separation agreement with EWC Ventures, LLC, a subsidiary of European Wax Center.
The agreement provides for continued payment of his current base salary for 18 months post-separation, a pro rata annual incentive bonus for fiscal year 2024 subject to Compensation Committee approval, and payment of monthly health premiums for up to 18 months, contingent on his COBRA election and adherence to the agreement's terms.
This compensation package is in accordance with the company's Change in Control and Severance Plan, under which Willis agreed to release all claims against EWC Ventures, LLC and its affiliates.
In other recent news, European Wax Center (EWC) reported a 2.3% increase in system-wide sales, hitting $260.2 million in their second quarter. Despite a challenging macroeconomic environment, the company saw a 1.6% growth in same-store sales and improved gross margin to 73.2%.
However, due to increased advertising expenses, the adjusted EBITDA fell by 2.6%, prompting EWC to revise its financial guidance for 2024.
In response to these developments, Truist Securities, Baird, and Citi have adjusted their ratings and price targets for EWC. Truist Securities maintained a Buy rating, but halved its price target to $8, citing a significant reduction in the company's projections for unit growth in 2024.
Baird maintained a Neutral rating, lowering the price target to $7.00, while Citi downgraded EWC from a Buy to a Neutral rating and significantly adjusted the price target to $5.50.
Furthermore, EWC announced plans to expand its successful laser hair removal pilot to additional states, focusing on driving new guests, reactivating lapsed guests, and enhancing the guest experience.
The company expects to open 27 to 32 net new centers and achieve system-wide sales of $930 million to $950 million as part of its recent developments.
InvestingPro Insights
In light of the recent leadership changes at European Wax Center, Inc. (NASDAQ:EWCZ), investors may be closely monitoring the company's performance and market position. According to InvestingPro data, European Wax Center has a market capitalization of approximately $356.88 million, with a P/E ratio standing at 19.7, which is reflective of investor sentiment towards the company's earnings potential. Notably, the company's gross profit margin is an impressive 72.82% for the last twelve months as of Q2 2024, indicating a strong ability to control costs relative to revenue.
InvestingPro Tips suggest that management has been actively buying back shares, which could be a sign of confidence in the company's value. Additionally, European Wax Center is said to have a high shareholder yield and is expected to see net income growth this year. These factors may offer some reassurance to investors in the face of recent leadership transitions.
For those looking for more detailed analysis and additional insights, there are over 15 InvestingPro Tips available for European Wax Center at InvestingPro, which could provide further guidance on the stock's potential in the context of these recent developments.
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