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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 4, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40714

EUROPEAN WAX CENTER, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	86-3150064
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5830 Granite Parkway, 3rd Floor Plano, Texas	75024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (469) 264-8123

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Class A common stock, par value $0.00001 per share

     EWCZ

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 7, 2025, the registrant had 43,692,903 and 10,667,418 shares of Class A and Class B common stock, respectively, $0.00001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets as of October 4, 2025 and January 4, 2025	1
	Condensed Consolidated Statements of Operations for the 13 and 39 weeks ended October 4, 2025 and October 5, 2024	2
	Condensed Consolidated Statements of Cash Flows for the 39 weeks ended October 4, 2025 and October 5, 2024	3
	Condensed Consolidated Statements of Stockholders' Equity for the 13 and 39 weeks ended October 4, 2025 and October 5, 2024	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	31
Item 6.	Exhibits	32
Signatures		33

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Form 10-Q including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. Words including “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or “would,” or, in each case, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Some of the key factors that could cause actual results to differ from our expectations include, but are not limited to, the following risks related to our business: the operational and financial results of the Company’s franchisees; the ability of the Company’s franchisees to enter new markets, select appropriate sites for new centers or open new centers; the effectiveness of the Company’s marketing and advertising programs and the active participation of its franchisees in enhancing the value of its brand; the failure of its franchisees to participate in and comply with its agreements, business model and policies; the Company’s and its franchisees’ ability to attract and retain guests; the effect of social media on the Company’s reputation; the Company’s ability to compete with other industry participants and respond to market trends and changes in consumer preferences; the effect of the Company’s planned growth on its management, employees, information systems and internal controls; the Company’s ability to retain and effectively respond to a loss of key executives; recruitment efforts; a significant failure, interruptions or security breach of the Company’s computer systems or information technology; the Company and its franchisees’ ability to attract, train, and retain talented wax specialists and managers; changes in the availability or cost of labor; the Company’s ability to retain its franchisees and to maintain the quality of existing franchisees; failure of the Company’s franchisees to implement business development plans; the ability of the Company’s limited key suppliers, including international suppliers, and distribution centers to deliver their products; changes in supply costs and decreases in the Company’s product sourcing revenue, including changes due to the imposition of tariffs; the Company’s ability to adequately protect its intellectual property; the Company’s substantial indebtedness; the impact of paying some of the Company’s pre-IPO owners for certain tax benefits the Company may claim; changes in general economic and business conditions, including changes due to tariff policy and geopolitical tensions; the Company’s and its franchisees’ ability to comply with existing and future health, employment and other governmental regulations; complaints or litigation that may adversely affect the Company’s business and reputation; the seasonality of the Company’s business resulting in fluctuations in its results of operations; the impact of global crises on the Company’s operations and financial performance; the impact of inflation and rising interest rates on the Company’s business; the Company’s access to sources of liquidity and capital to finance its continued operations and growth strategy and the other important factors discussed under the caption “Risk Factors” under Item 1A in the Company’s Annual Report on Form 10-K for the year ended January 4, 2025, filed with the Securities and Exchange Commissions (the “SEC”) on March 11, 2025.

We caution investors, potential investors and others not to place undue reliance on the forward-looking statements contained in this Form 10-Q. You are encouraged to read any further disclosures we may make in our future reports to the SEC, accessible on the SEC’s website at www.sec.gov, Investors Relations section of the Company’s website at www.waxcenter.com, or otherwise. Our website and information included in or linked to our website are not part of this Form 10-Q.

These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this Form 10-Q. Any forward-looking statement that the Company makes in this Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

EUROPEAN WAX CENTER, INC. and Subsidiaries

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	October 4, 2025			January 4, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	73,600		$	49,725
Restricted cash		6,424			6,469
Accounts receivable, net		7,089			7,283
Inventory, net		15,622			19,070
Prepaid expenses and other current assets		5,762			5,292
Total current assets		108,497			87,839
Property and equipment, net		9,774			2,313
Operating lease right-of-use assets		3,663			3,313
Intangible assets, net		417,659			432,160
Goodwill		39,112			39,112
Deferred income taxes		140,376			140,315
Other non-current assets		1,616			2,015
Total assets	$	720,697		$	707,067
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	17,607		$	17,354
Long-term debt, current portion		4,000			4,000
Tax receivable agreement liability, current portion		2,908			9,353
Deferred revenue, current portion		3,818			4,149
Operating lease liabilities, current portion		1,218			1,255
Total current liabilities		29,551			36,111
Long-term debt, net		374,412			373,246
Tax receivable agreement liability, net of current portion		201,476			194,917
Deferred revenue, net of current portion		5,009			5,836
Operating lease liabilities, net of current portion		2,555			2,318
Deferred tax liability		738			738
Other long-term liabilities		2,147			2,309
Total liabilities		615,888			615,475
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock ($0.00001 par value, 100,000,000 shares authorized, none issued and outstanding as of October 4, 2025 and January 4, 2025, respectively)		—			—
Class A common stock ($0.00001 par value, 600,000,000 shares authorized, 53,210,807 and 51,713,132 shares issued and 43,392,030 and 43,323,183 shares outstanding as of October 4, 2025 and January 4, 2025, respectively)		—			—
Class B common stock ($0.00001 par value, 60,000,000 shares authorized, 10,668,291 and 12,005,172 shares issued and outstanding as of October 4, 2025 and January 4, 2025, respectively)		—			—
Treasury stock, at cost 9,818,777 and 8,389,949 shares of Class A common stock as of October 4, 2025 and January 4, 2025, respectively		(86,240	)		(80,148	)
Additional paid-in capital		255,496			244,611
Accumulated deficit		(91,147	)		(100,416	)
Total stockholders’ equity attributable to European Wax Center, Inc.		78,109			64,047
Noncontrolling interests		26,700			27,545
Total stockholders’ equity		104,809			91,592
Total liabilities and stockholders’ equity	$	720,697		$	707,067

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CoNDENSED Consolidated Statements of Operations

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	For the Thirteen Weeks Ended						For the Thirty-Nine Weeks Ended
	October 4, 2025			October 5, 2024			October 4, 2025		October 5, 2024
REVENUE
Product sales	$	30,606		$	31,684		$	89,992	$	95,105
Royalty fees		13,195			13,413			39,901		40,314
Marketing fees		7,574			7,603			22,885		22,841
Other revenue		2,810			2,730			8,745		8,915
Total revenue		54,185			55,430			161,523		167,175
OPERATING EXPENSES
Cost of revenue		14,476			15,003			41,927		44,551
Selling, general and administrative		13,036			17,474			42,883		43,851
Advertising		7,610			8,409			23,015		28,673
Depreciation and amortization		5,041			5,073			15,025		15,246
Loss (gain) on disposal or impairment of assets		125			(2	)		125		(83	)
Total operating expenses		40,288			45,957			122,975		132,238
Income from operations		13,897			9,473			38,548		34,937
Interest expense, net		6,520			6,340			19,747		19,043
Other (income) expense		(12	)		285			8		535
Income before income taxes		7,389			2,848			18,793		15,359
Income tax expense		2,022			818			5,463		3,751
NET INCOME	$	5,367		$	2,030		$	13,330	$	11,608
Less: net income attributable to noncontrolling interests		1,585			550			4,061		3,114
NET INCOME ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC.	$	3,782		$	1,480		$	9,269	$	8,494
Net income per share
Basic - Class A Common Stock	$	0.09		$	0.03		$	0.22	$	0.18
Diluted - Class A Common Stock	$	0.09		$	0.03		$	0.22	$	0.18
Weighted average shares outstanding
Basic - Class A Common Stock		43,375,077			46,388,266			43,340,151		47,706,516
Diluted - Class A Common Stock		43,498,314			46,400,419			43,453,284		47,750,157

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CONDENSED Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)


	For the Thirty-Nine Weeks Ended
	October 4, 2025			October 5, 2024
Cash flows from operating activities:
Net income	$	13,330		$	11,608
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,025			15,246
Amortization of deferred financing costs		4,425			4,171
Provision for inventory obsolescence		—			(25	)
(Recovery) provision for bad debts		(29	)		393
Deferred income taxes		5,094			3,568
Remeasurement of tax receivable agreement liability		8			535
Gain on sale of center		—			(81	)
Loss on disposal or impairment of assets		125			3
Equity compensation		5,366			4,205
Changes in assets and liabilities:
Accounts receivable		222			1,702
Inventory, net		3,448			202
Prepaid expenses and other assets		351			2,426
Accounts payable and accrued liabilities		(1	)		(1,642	)
Deferred revenue		(1,158	)		(1,683	)
Other long-term liabilities		(998	)		(678	)
Net cash provided by operating activities		45,208			39,950
Cash flows from investing activities:
Purchases of property and equipment		(2,173	)		(276	)
Cash received for sale of center		—			135
Net cash used in investing activities		(2,173	)		(141	)
Cash flows from financing activities:
Principal payments on long-term debt		(3,000	)		(3,000	)
Distributions to EWC Ventures LLC members		(3,391	)		(3,584	)
Repurchase of Class A common stock		(6,092	)		(30,147	)
Taxes on vested restricted stock units paid by withholding shares		(168	)		(549	)
Dividend equivalents to holders of EWC Ventures units		(10	)		(757	)
Payments pursuant to tax receivable agreement		(6,544	)		(6,496	)
Net cash used in financing activities		(19,205	)		(44,533	)
Net increase (decrease) in cash, cash equivalents and restricted cash		23,830			(4,724	)
Cash, cash equivalents and restricted cash, beginning of period		56,194			59,228
Cash, cash equivalents and restricted cash, end of period	$	80,024		$	54,504
Supplemental cash flow information:
Cash paid for interest	$	16,275		$	16,443
Cash paid for income taxes	$	460		$	498
Non-cash investing activities:
Property purchases included in accounts payable and accrued liabilities	$	144		$	30
Property purchases included in additional paid-in capital	$	5,667		$	—
Right-of-use assets obtained in exchange for operating lease obligations	$	1,199		$	592

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

CONDENSED Consolidated Statements of STOCKHOLDERS’ Equity

(Amounts in thousands, except share and per share amounts)

(Unaudited)



											Additional
	Class A Common Stock					Class B Common Stock					paid-in			Accumulated			Treasury			Noncontrolling			Total
	Shares			Amount		Shares			Amount		capital			deficit			Stock			interest			equity
Balance at January 4, 2025		43,323,183		$	—		12,005,172		$	—	$	244,611		$	(100,416	)	$	(80,148	)	$	27,545		$	91,592
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		139,626			—		(139,626	)		—		—			—			—			—			—
Vesting of restricted stock units		114,024			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(30,434	)		—		—			—		(159	)		—			—			—			(159	)
Equity compensation		—			—		—			—		6,532			—			—			—			6,532
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,228	)		(1,228	)
Repurchase of Class A common stock		(240,573	)		—		—			—		—			—			(1,064	)		—			(1,064	)
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		269			—			—			—			269
Allocation of equity to noncontrolling interests		—			—		—			—		(907	)		—			—			907			—
Net income		—			—		—			—		—			1,735			—			835			2,570
Balance at April 5, 2025		43,305,826		$	—		11,865,546		$	—	$	250,346		$	(98,681	)	$	(81,212	)	$	28,059		$	98,512
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		5,000			—		(5,000	)		—		—			—			—			—			—
Vesting of restricted stock units		50,574			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(681	)		—		—			—		(2	)		—			—			—			(2	)
Equity compensation		—			—		—			—		3,233			—			—			—			3,233
Repurchase of Class A common stock		—			—		—			—		—			—			(383	)		—			(383	)
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,015	)		(1,015	)
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		124			—			—			—			124
Allocation of equity to noncontrolling interests		—			—		—			—		(656	)		—			—			656			—
Net income		—			—		—			—		—			3,752			—			1,641			5,393
Balance at July 5, 2025		43,360,719		$	—		11,860,546		$	—	$	253,045		$	(94,929	)	$	(81,595	)	$	29,341		$	105,862
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		1,192,255			—		(1,192,255	)		—		—			—			—			—			—
Vesting of restricted stock units		28,871			—		—			—		—			—			—			—			—
Equity compensation		—			—		—			—		1,269			—			—			—			1,269
Repurchase of Class A common stock		(1,188,255	)		—		—			—		—			—			(4,645	)		—			(4,645	)
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,148	)		(1,148	)
Shares withheld for taxes on vested restricted stock units		(1,560	)		—		—			—		(8	)		—			—			—			(8	)
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		(1,888	)		—			—			—			(1,888	)
Allocation of equity to noncontrolling interests		—			—		—			—		3,078			—			—			(3,078	)		—
Net income		—			—		—			—		—			3,782			—			1,585			5,367
Balance at October 4, 2025		43,392,030		$	—		10,668,291		$	—	$	255,496		$	(91,147	)	$	(86,240	)	$	26,700		$	104,809



											Additional
	Class A Common Stock					Class B Common Stock					paid-in			Accumulated			Treasury			Noncontrolling			Total
	Shares			Amount		Shares			Amount		capital			deficit			Stock			interest			equity
Balance at January 6, 2024		48,476,981		$	—		12,278,876		$	—	$	232,902		$	(110,878	)	$	(40,000	)	$	32,979		$	115,003
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		56,232			—		(56,232	)		—		—			—			—			—			—
Vesting of restricted stock units		99,023			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(24,724	)		—		—			—		(319	)		—			—			—			(319	)
Forfeiture of unvested incentive units		—			—		(3,055	)		—		—			—			—			—			—
Equity compensation		—			—		—			—		1,382			—			—			—			1,382
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,180	)		(1,180	)
Forfeiture of accrued dividend equivalents		—			—		—			—		—			—			—			10			10
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		(112	)		—			—			—			(112	)
Allocation of equity to noncontrolling interests		—			—		—			—		21			—			—			(21	)		—
Net income		—			—		—			—		—			2,765			—			889			3,654
Balance at April 6, 2024		48,607,512		$	—		12,219,589		$	—	$	233,874		$	(108,113	)	$	(40,000	)	$	32,677		$	118,438
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		4,744			—		(4,744	)		—		—			—			—			—			—
Vesting of restricted stock units		25,355			—		—			—		—			—			—			—			—
Shares withheld for taxes on vested restricted stock units		(6,521	)		—		—			—		(74	)		—			—			—			(74	)
Equity compensation		—			—		—			—		1,941			—			—			—			1,941
Repurchase of Class A Common Stock		(919,551	)		—		—			—		—			—			(10,001	)		—			(10,001	)
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,335	)		(1,335	)
Tax receivable liability and deferred taxes arising from share exchange		—			—		—			—		381			—			—			—			381
Allocation of equity to noncontrolling interests		—			—		—			—		1,149			—			—			(1,149	)		—
Net income		—			—		—			—		—			4,249			—			1,675			5,924
Balance at July 6, 2024		47,711,539		$	—		12,214,845		$	—	$	237,271		$	(103,864	)	$	(50,001	)	$	31,868		$	115,274
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock		22,654			—		(22,654	)		—		—			—			—			—			—
Vesting of restricted stock units		90,023			—		—			—		—			—			—			—			—
Equity compensation		—			—		—			—		882			—			—			—			882
Repurchase of Class A Common Stock		(3,057,070	)		—		—			—		—			—			(20,146	)		—			(20,146	)
Distributions to members of EWC Ventures		—			—		—			—		—			—			—			(1,069	)		(1,069	)
Shares withheld for taxes on vested restricted stock units		(19,749	)		—		—			—		(156	)		—			—			—			(156	)
Tax receivable liability and deferred taxes arising from share exchanges		—			—		—			—		1,085			—			—			—			1,085
Allocation of equity to noncontrolling interests		—			—		—			—		2,533			—			—			(2,533	)		—
Net income		—			—		—			—		—			1,480			—			550			2,030
Balance at October 5, 2024		44,747,397		$	—		12,192,191		$	—	$	241,615		$	(102,384	)	$	(70,147	)	$	28,816		$	97,900

The accompanying notes are an integral part of these condensed consolidated financial statements.

EUROPEAN WAX CENTER, INC. and Subsidiaries

Notes to CONDENSED Consolidated Financial Statements

(Amounts in thousands, except share/unit and per share/unit amounts)

(Unaudited)

1. Nature of business and organization

European Wax Center, Inc. was formed as a Delaware corporation on April 1, 2021. European Wax Center, Inc. and subsidiaries (the “Company”) was formed for the purpose of completing a public offering and related transactions in order to carry on the business of EWC Ventures, LLC (“EWC Ventures”) and its subsidiaries. Through its subsidiaries, the Company is engaged in selling franchises of European Wax Center, distributing unique facial and body waxing products to franchisees which are used to perform waxing services and providing branded facial and body waxing products directly to consumers at various locations throughout the United States.

The Company operates on a fiscal calendar which, in a given year, consists of a 52 or 53 week period ending on the Saturday closest to December 31st. The quarters ended October 4, 2025 and October 5, 2024 both consisted of 13 weeks.

2. Summary of significant accounting policies

(a) Basis of presentation and consolidation

The accompanying unaudited condensed consolidated financial statements have been presented in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission and includes the operations of the Company and EWC Ventures and its wholly owned subsidiaries. EWC Ventures is considered a variable interest entity. The Company is the primary beneficiary of EWC Ventures. As a result, the Company consolidates EWC Ventures.

The condensed consolidated balance sheet as of January 4, 2025 is derived from the audited consolidated financial statements of the Company but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended January 4, 2025 included in our annual report on Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation.

Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the audited consolidated financial statements and the related notes thereto for the year ended January 4, 2025 included in our annual report on Form 10-K.

(b) Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the financial statements include revenue recognition, provision for inventory obsolescence, income taxes, the tax receivable agreement (as amended, the “TRA”), the expected life of franchise agreements, the useful life of reacquired rights, valuation of equity-based compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets, including indefinite-lived intangible assets. Actual results could differ from those estimates.

The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) and may take advantage of reduced reporting requirements that are otherwise applicable to public companies. Section 107 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with those standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards. We also intend to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not

limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

(d) Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity (net assets) of a business entity during a period from transactions and other events and circumstances from nonowner sources. Comprehensive income (loss) is equal to net income (loss) for all periods presented.

(e) Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326-20 to provide a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within that annual period, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes the accounting for internal-use software by eliminating the traditional “development stages” framework. This update adopts a new, principles-based approach where costs are capitalized once management commits to funding and it is probable the software will be completed and used as intended. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within that annual period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

3. Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:


	October 4, 2025		January 4, 2025
Prepaid inventory	$	464	$	494
Prepaid insurance		1,697		1,139
Prepaid technology		1,595		1,908
Prepaid advertising		965		878
Prepaid commissions		305		345
Prepaid other & other current assets		736		528
Total	$	5,762	$	5,292

4. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consisted of the following:


	October 4, 2025		January 4, 2025
Accounts payable	$	4,751	$	5,615
Accrued inventory		1,379		2,248
Accrued compensation		4,410		4,630
Accrued taxes and penalties		984		1,013
Accrued technology and subscription fees		121		139
Accrued interest		1,147		1,156
Accrued professional fees		603		632
Accrued advertising		3,065		1,212
Accrued dividend equivalents		—		10
Other accrued liabilities		1,147		699
Total accounts payable and accrued liabilities	$	17,607	$	17,354

5. Long-term debt

Long-term debt consists of the following:


	October 4, 2025		January 4, 2025
Class A-2 Notes	$	387,000	$	390,000
Less: current portion

European Wax Center, Inc. 10-Q