Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 25, 2022 | Aug. 01, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 25, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | EUROPEAN WAX CENTER, INC. | |
Entity Central Index Key | 0001856236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-40714 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-3150064 | |
Entity Address, Address Line One | 5830 Granite Parkway, 3rd Floor | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | (469) | |
Local Phone Number | 264-8123 | |
Title of 12(b) Security | Class A common stock, par value $0.00001 per share | |
Trading Symbol | EWCZ | |
Security Exchange Name | NASDAQ | |
Class A Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 39,503,811 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 23,943,795 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Current liabilities: | ||
Operating lease liabilities, current portion | $ 1,628 | |
Operating lease liabilities, net of current portion | 4,848 | |
Members' equity: | ||
Total stockholders' equity | 134,147 | $ 341,241 |
European Wax Center, Inc. and Subsidiaries | ||
Current assets: | ||
Cash and cash equivalents | 31,190 | 43,301 |
Restricted cash | 10,866 | 0 |
Accounts receivable, net | 9,880 | 6,656 |
Inventory | 22,979 | 19,423 |
Prepaid expenses and other current assets | 7,033 | 5,927 |
Total current assets | 81,948 | 75,307 |
Property and equipment, net | 3,234 | 3,863 |
Operating lease right-of-use assets | 5,748 | 0 |
Intangible assets, net | 192,508 | 201,995 |
Goodwill | 328,551 | 328,551 |
Other non-current assets | 5,141 | 3,723 |
Total assets | 617,130 | 613,439 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 22,475 | 23,155 |
Long-term debt, current portion | 4,000 | 5,625 |
Deferred revenue, current portion | 3,783 | 3,004 |
Operating lease liabilities, current portion | 1,628 | 0 |
Other current liabilities | 0 | 182 |
Total current liabilities | 31,886 | 31,966 |
Long-term debt, net | 370,489 | 172,607 |
Tax receivable agreement liability | 64,399 | 59,167 |
Deferred revenue, net of current portion | 6,429 | 6,787 |
Operating lease liabilities, net of current portion | 4,848 | 0 |
Other long-term liabilities | 4,932 | 1,671 |
Total liabilities | 482,983 | 272,198 |
Commitments and contingencies (Note 10) | ||
Members' equity: | ||
Preferred stock | 0 | 0 |
Additional paid-in capital | 186,786 | 182,919 |
Accumulated deficit | (122,861) | (3,487) |
Accumulated other comprehensive loss | 0 | (45) |
Total stockholders' equity attributable to European Wax Center, Inc. | 63,925 | 179,387 |
Noncontrolling interests | 70,222 | 161,854 |
Total stockholders' equity | 134,147 | 341,241 |
Total liabilities, mezzanine equity and stockholders'/member's equity | 617,130 | 613,439 |
European Wax Center, Inc. and Subsidiaries | Class A Common Stock [Member] | ||
Members' equity: | ||
Common stock | 0 | 0 |
Total stockholders' equity | 0 | 0 |
European Wax Center, Inc. and Subsidiaries | Class B Common Stock [Member] | ||
Members' equity: | ||
Common stock | 0 | 0 |
Total stockholders' equity | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - European Wax Center, Inc. and Subsidiaries - $ / shares | Jun. 25, 2022 | Mar. 26, 2022 | Dec. 25, 2021 |
Preferred Stock Par Value | $ 0.00001 | $ 0.00001 | |
Preferred Stock, Shares Authorized | 100,000,000 | 100,000,000 | |
Preferred Stock, Shares Issued | 0 | 0 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Class A Common Stock [Member] | |||
Common Stock, Par Value | $ 0.00001 | $ 0.00001 | |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 | |
Common Stock, Shares, Issued | 39,503,811 | 36,932,423 | |
Common Stock, Shares, Outstanding | 39,503,811 | 37,038,465 | 36,932,423 |
Class B Common Stock [Member] | |||
Common Stock, Par Value | $ 0.00001 | $ 0.00001 | |
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 | |
Common Stock, Shares, Issued | 23,943,795 | 26,700,477 | |
Common Stock, Shares, Outstanding | 23,943,795 | 26,433,636 | 26,700,477 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2022 | Jun. 26, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | |
OPERATING EXPENSES | ||||
Depreciation and amortization | $ 10,115 | $ 10,409 | ||
NET INCOME | 6,057 | 8,831 | ||
NET LOSS ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC. | $ 968 | 2,853 | ||
European Wax Center, Inc. and Subsidiaries | ||||
REVENUE | ||||
Total revenue | 53,358 | $ 47,902 | 98,784 | 84,559 |
OPERATING EXPENSES | ||||
Cost of revenue | 14,864 | 11,540 | 26,854 | 21,471 |
Selling, general and administrative | 15,227 | 12,212 | 30,702 | 23,278 |
Advertising | 8,049 | 6,515 | 14,605 | 11,399 |
Depreciation and amortization | 5,055 | 5,271 | 10,115 | 10,409 |
Total operating expenses | 43,195 | 35,538 | 82,276 | 66,557 |
Income from operations | 10,163 | 12,364 | 16,508 | 18,002 |
Interest expense | 8,080 | 4,635 | 9,587 | 9,171 |
Other expense | 33 | 0 | 818 | 0 |
Income before Income Taxes | 2,050 | 7,729 | 6,103 | 8,831 |
Income tax expense | 19 | 0 | 46 | 0 |
NET INCOME | 2,031 | 7,729 | 6,057 | 8,831 |
Less: net income (loss) attributable to EWC Ventures LLC prior to the Reorganization Transactions | 0 | 7,729 | 0 | 8,831 |
Less: net income attributable to noncontrolling interests | 1,063 | 0 | 3,204 | 0 |
NET LOSS ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC. | $ 968 | $ 0 | $ 2,853 | $ 0 |
European Wax Center, Inc. and Subsidiaries | Class A Common Stock [Member] | ||||
Net income per share | ||||
Earnings Per Share, Basic | $ 0.03 | $ 0 | $ 0.09 | $ 0 |
Earnings Per Share, Diluted | $ 0.03 | $ 0 | $ 0.08 | $ 0 |
Weighted average shares outstanding | ||||
Weighted Average Number of Shares Outstanding, Basic | 37,911,637 | 0 | 37,432,586 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 38,155,439 | 0 | 37,661,978 | 0 |
European Wax Center, Inc. and Subsidiaries | Product [Member] | ||||
REVENUE | ||||
Total revenue | $ 30,502 | $ 26,524 | $ 55,279 | $ 47,141 |
European Wax Center, Inc. and Subsidiaries | Royalty [Member] | ||||
REVENUE | ||||
Total revenue | 12,769 | 12,030 | 24,154 | 20,880 |
European Wax Center, Inc. and Subsidiaries | Marketing [Member] | ||||
REVENUE | ||||
Total revenue | 7,175 | 6,632 | 13,626 | 11,566 |
European Wax Center, Inc. and Subsidiaries | Other Revenue [Member] | ||||
REVENUE | ||||
Total revenue | $ 2,912 | $ 2,716 | $ 5,725 | $ 4,972 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2022 | Jun. 26, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | |
Net income | $ 6,057 | $ 8,831 | ||
European Wax Center, Inc. and Subsidiaries | ||||
Net income | $ 2,031 | $ 7,729 | 6,057 | 8,831 |
Items included in other comprehensive loss: | ||||
Unrealized gain on cash flow hedge | 0 | 80 | 0 | 239 |
TOTAL COMPREHENSIVE INCOME | 2,031 | 7,809 | 6,057 | 9,070 |
Less: total comprehensive income attributable to EWC Ventures, LLC prior to the Reorganization Transactions | 0 | 7,809 | 0 | 9,070 |
Less: total comprehensive income attributable to non-controlling interests | 1,063 | 0 | 3,204 | 0 |
European Wax Center, Inc. and Subsidiaries | Parent [Member] | ||||
Items included in other comprehensive loss: | ||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO EUROPEAN WAX CENTER, INC. | $ 968 | $ 0 | $ 2,853 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 25, 2022 | Jun. 26, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 6,057 | $ 8,831 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 10,115 | 10,409 |
Amortization of deferred financing costs | 1,229 | 684 |
Gain on interest rate cap | (196) | 0 |
Provision for inventory obsolescence | (125) | 0 |
Loss on debt extinguishment | 1,957 | 0 |
Provision for bad debts | 0 | 405 |
Remeasurement of tax receivable agreement liability | 818 | 0 |
Equity compensation | 5,335 | 557 |
Changes in assets and liabilities: | ||
Accounts receivable | (3,674) | (6,712) |
Inventory | (3,431) | (9,520) |
Prepaid expenses and other assets | 212 | (7,562) |
Accounts payable and accrued liabilities | (964) | 10,260 |
Deferred revenue | 421 | 674 |
Other long-term liabilities | (146) | (166) |
Net cash provided by (used in) operating activities | 17,608 | 7,860 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (82) | (323) |
Reacquisition of area representative rights | 0 | (7,594) |
Net cash used in investing activities | (82) | (7,917) |
Cash flows from financing activities: | ||
Deferred loan costs | (12,419) | 0 |
Proceeds from long-term debt | 384,328 | 0 |
Principal payments on long-term debt | (180,000) | (1,214) |
Payments of debt extinguishment costs | (77) | |
Distributions to EWC Ventures LLC members | (4,760) | 0 |
Contributions from EWC Ventures LLC members | 0 | 728 |
Payment of Class A common stock offering costs | 870 | 0 |
Repurchase of Class A Units | 0 | (942) |
Dividends to holders of Class A common stock | (122,227) | 0 |
Dividend equivalents to holders of EWC Ventures units | (82,746) | 0 |
Net cash used in financing activities | (18,771) | (1,428) |
Net decrease in cash | (1,245) | (1,485) |
Cash, cash equivalents and restricted cash, beginning of period | 43,301 | 36,720 |
Cash, cash equivalents and restricted cash, end of period | 42,056 | 35,235 |
Supplemental cash flow information: | ||
Cash paid for interest | 3,042 | 8,362 |
Cash paid for income taxes | 26 | 0 |
Non-cash investing activities: | ||
Property purchases included in accounts payable and accrued liabilities | 5 | 0 |
Reacquired rights purchased included in accounts payable and accrued liabilities | $ 0 | $ 50 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS'/MEMBERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | European Wax Center, Inc. and Subsidiaries | European Wax Center, Inc. and Subsidiaries Class A Common Stock [Member] | European Wax Center, Inc. and Subsidiaries Class B Common Stock [Member] | European Wax Center, Inc. and Subsidiaries Mezzanine Equity [Member] Class A Founders' Units [Member] | European Wax Center, Inc. and Subsidiaries Mezzanine Equity [Member] Class D Units [Member] | European Wax Center, Inc. and Subsidiaries Members' Equity [Member] Class A Units [Member] | European Wax Center, Inc. and Subsidiaries Members' Equity [Member] Class B Units [Member] | European Wax Center, Inc. and Subsidiaries Members' Equity [Member] Class C Units [Member] | European Wax Center, Inc. and Subsidiaries Additional Paid in Capital [Member] | European Wax Center, Inc. and Subsidiaries Accumulated Deficit [Member] | European Wax Center, Inc. and Subsidiaries Accumulated Deficit [Member] Class A Common Stock [Member] | European Wax Center, Inc. and Subsidiaries Accumulated Other Comprehensive Loss [Member] | European Wax Center, Inc. and Subsidiaries Noncontrolling Interest [Member] | European Wax Center, Inc. and Subsidiaries Noncontrolling Interest [Member] Class A Common Stock [Member] |
Temporary Equity, Beginning Balance at Dec. 26, 2020 | $ 89,240 | $ 24,909 | |||||||||||||
Temporary Equity, Beginning Balance (Shares) at Dec. 26, 2020 | 8,309,193 | 2,500,000 | |||||||||||||
Beginning Balance at Dec. 26, 2020 | $ 203,874 | $ 265,791 | $ 83 | $ (61,473) | $ (527) | ||||||||||
Beginning Balance (Shares) at Dec. 26, 2020 | 26,401,089 | 1 | 1,000 | ||||||||||||
Equity compensation | $ 298 | 298 | |||||||||||||
Repurchase of Class A Units | (942) | $ (942) | |||||||||||||
Repurchase of Class A Units (Shares) | (89,919) | ||||||||||||||
Contributions | 2 | 2 | |||||||||||||
Unrealized gain on cash flow hedge | 159 | 159 | |||||||||||||
Accretion of Class A Founders' Units to redemption value | (31,991) | $ 31,991 | (383) | (31,608) | |||||||||||
Net income | 1,102 | 1,102 | |||||||||||||
Temporary Equity, Ending Balance at Mar. 27, 2021 | $ 121,231 | $ 24,909 | |||||||||||||
Temporary Equity, Ending Balance (Shares) at Mar. 27, 2021 | 8,309,193 | 2,500,000 | |||||||||||||
Ending Balance at Mar. 27, 2021 | 172,502 | $ 264,849 | (91,979) | (368) | |||||||||||
Ending Balance (Shares) at Mar. 27, 2021 | 26,311,170 | 1 | 1,000 | ||||||||||||
Temporary Equity, Beginning Balance at Dec. 26, 2020 | $ 89,240 | $ 24,909 | |||||||||||||
Temporary Equity, Beginning Balance (Shares) at Dec. 26, 2020 | 8,309,193 | 2,500,000 | |||||||||||||
Beginning Balance at Dec. 26, 2020 | 203,874 | $ 265,791 | 83 | (61,473) | (527) | ||||||||||
Beginning Balance (Shares) at Dec. 26, 2020 | 26,401,089 | 1 | 1,000 | ||||||||||||
Net income | 8,831 | 8,831 | |||||||||||||
Temporary Equity, Ending Balance at Jun. 26, 2021 | $ 151,809 | $ 24,909 | |||||||||||||
Temporary Equity, Ending Balance (Shares) at Jun. 26, 2021 | 8,309,193 | 2,500,000 | |||||||||||||
Ending Balance at Jun. 26, 2021 | 150,718 | $ 264,849 | (113,843) | (288) | |||||||||||
Ending Balance (Shares) at Jun. 26, 2021 | 26,311,170 | 1 | 1,000 | ||||||||||||
Temporary Equity, Beginning Balance at Mar. 27, 2021 | $ 121,231 | $ 24,909 | |||||||||||||
Temporary Equity, Beginning Balance (Shares) at Mar. 27, 2021 | 8,309,193 | 2,500,000 | |||||||||||||
Beginning Balance at Mar. 27, 2021 | 172,502 | $ 264,849 | (91,979) | (368) | |||||||||||
Beginning Balance (Shares) at Mar. 27, 2021 | 26,311,170 | 1 | 1,000 | ||||||||||||
Equity compensation | 259 | 259 | |||||||||||||
Contributions | 726 | 726 | |||||||||||||
Unrealized gain on cash flow hedge | 80 | 80 | |||||||||||||
Accretion of Class A Founders' Units to redemption value | (30,578) | $ 30,578 | (985) | (29,593) | |||||||||||
Net income | 7,729 | 7,729 | |||||||||||||
Temporary Equity, Ending Balance at Jun. 26, 2021 | $ 151,809 | $ 24,909 | |||||||||||||
Temporary Equity, Ending Balance (Shares) at Jun. 26, 2021 | 8,309,193 | 2,500,000 | |||||||||||||
Ending Balance at Jun. 26, 2021 | 150,718 | $ 264,849 | (113,843) | (288) | |||||||||||
Ending Balance (Shares) at Jun. 26, 2021 | 26,311,170 | 1 | 1,000 | ||||||||||||
Beginning Balance at Dec. 25, 2021 | 341,241 | 341,241 | $ 0 | $ 0 | 182,919 | (3,487) | (45) | $ 161,854 | |||||||
Beginning Balance (Shares) at Dec. 25, 2021 | 36,932,423 | 26,700,477 | |||||||||||||
Equity compensation | 3,335 | 3,335 | |||||||||||||
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock, Shares | 100,000 | (100,000) | |||||||||||||
Vesting of restricted stock, shares | 6,042 | ||||||||||||||
Forfeiture of unvested units, shares | (166,841) | ||||||||||||||
Distributions to members of EWC Ventures | (2,272) | (2,272) | |||||||||||||
Establish tax receivable agreement liability | (347) | (347) | |||||||||||||
Reclassification of loss on cash flow hedge to earnings | 45 | 45 | |||||||||||||
Impact of change in ownership on noncontrolling interest | (1,149) | 1,149 | |||||||||||||
Net income | 4,026 | 1,885 | 2,141 | ||||||||||||
Ending Balance at Mar. 26, 2022 | 346,028 | $ 0 | $ 0 | 184,758 | (1,602) | 0 | 162,872 | ||||||||
Ending Balance (Shares) at Mar. 26, 2022 | 37,038,465 | 26,433,636 | |||||||||||||
Beginning Balance at Dec. 25, 2021 | 341,241 | 341,241 | $ 0 | $ 0 | 182,919 | (3,487) | (45) | 161,854 | |||||||
Beginning Balance (Shares) at Dec. 25, 2021 | 36,932,423 | 26,700,477 | |||||||||||||
Impact of change in ownership on noncontrolling interest | (2,946) | ||||||||||||||
Net income | 6,057 | 6,057 | |||||||||||||
Ending Balance at Jun. 25, 2022 | 134,147 | 134,147 | $ 0 | $ 0 | 186,786 | (122,861) | 0 | 70,222 | |||||||
Ending Balance (Shares) at Jun. 25, 2022 | 39,503,811 | 23,943,795 | |||||||||||||
Beginning Balance at Mar. 26, 2022 | 346,028 | $ 0 | $ 0 | 184,758 | (1,602) | 0 | 162,872 | ||||||||
Beginning Balance (Shares) at Mar. 26, 2022 | 37,038,465 | 26,433,636 | |||||||||||||
Equity compensation | 2,000 | 2,000 | |||||||||||||
Exchange of Class B Common Stock and EWC Ventures Units for Class A Common Stock, Shares | 2,459,302 | (2,459,302) | |||||||||||||
Vesting of restricted stock, shares | 6,044 | ||||||||||||||
Forfeiture of unvested units, shares | (30,539) | ||||||||||||||
Distributions to members of EWC Ventures | (2,488) | (2,488) | |||||||||||||
Dividend paid to shareholders for Class A common stock | 87,130 | $ (122,227) | $ (122,227) | (87,130) | $ 0 | ||||||||||
Dividend equivalents paid or payable to holders of Ventures' common stock | 87,130 | (122,227) | $ (122,227) | (87,130) | $ 0 | ||||||||||
Establish tax receivable agreement liability | (4,067) | (4,067) | |||||||||||||
Impact of change in ownership on noncontrolling interest | (4,095) | 4,095 | (4,095) | ||||||||||||
Net income | 2,031 | 968 | 1,063 | ||||||||||||
Ending Balance at Jun. 25, 2022 | $ 134,147 | $ 134,147 | $ 0 | $ 0 | $ 186,786 | $ (122,861) | $ 0 | $ 70,222 | |||||||
Ending Balance (Shares) at Jun. 25, 2022 | 39,503,811 | 23,943,795 |
Nature of Business and Organiza
Nature of Business and Organization | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Nature of business and organization | 1. Nature of business and organization European Wax Center, Inc. (the “Company”) was formed as a Delaware corporation on April 1, 2021. 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 proprietary 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 June 25, 2022 and June 26, 2021 both consisted of 13 weeks. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Summary of Significant Accounting Policies | 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 SEC 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. On August 4, 2021, we completed an internal reorganization, referred to as the “Reorganization Transactions” pursuant to which we were appointed the sole managing member of EWC Ventures. The Reorganization Transactions are more fully described in our annual report on Form 10-K for the fiscal year ended December 25, 2021. EWC Ventures has been determined to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the 13 and 26 weeks ended June 26, 2021 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of EWC Ventures. The amounts as of June 25, 2022 and December 25, 2021 and for the 13 and 26 weeks ended June 25, 2022 reflect the consolidated operations of the Company. The condensed consolidated balance sheet as of December 25, 2021 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 December 25, 2021 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 December 25, 2021 included in our annual report on Form 10-K, except as described below relating to our adoption of Accounting Standards Codification ("ASC") Topic 842, Leases and restricted cash. (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, inventory reserves, 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. (c) Implications of being an Emerging Growth Company 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) Restricted Cash In accordance with the Company’s securitized financing facility, which is described in Note 6, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”). The Company holds restricted cash that primarily represents cash collections held by the Trustee, which includes interest, principal, and commitment fee reserves. As of June 25, 2022, the Company had restricted cash held by the Trustee of $ 10,866 . Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the condensed consolidated statements of cash flows. (e) Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases and established ASC Topic 842, Leases (“ASC 842”), which supersedes ASC Topic 840, Leases . ASC 842 requires a lessee to recognize a lease right-of-use (“ROU”) asset and a corresponding lease liability on its balance sheet along with additional qualitative and quantitative disclosures. We adopted this guidance on December 26, 2021 (the beginning of fiscal year 2022) by applying the provisions of this guidance on a modified retrospective basis as of the effective date. As such, comparative periods have not been restated and the disclosures required under the new standard have not been provided for periods prior to December 26, 2021. However, we have provided the applicable disclosures required under ASC 840 for the prior year comparative period. We elected the package of practical expedients whereby we were not required to: i) reassess whether any expired or existing contracts are or contain leases, ii) reassess the lease classification of existing leases and iii) reassess initial direct costs for any existing leases. We did not elect the hindsight practical expedient or the practical expedient related to land easements. We have assessed and updated our business processes, systems and controls to ensure compliance with the recognition and disclosure requirements of the new standard. Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities of $ 6,799 and $ 7,630 , respectively, as of December 26, 2021 to recognize operating leases which were not recognized on our condensed consolidated balance sheets under previous guidance. The adoption of this guidance did not have a material impact on our condensed consolidated statements of operations or on our condensed consolidated statements of cash flows as our leases retained their classifications as determined under previous guidance. (f) Recently issued accounting pronouncements not yet adopted In June 2017, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)—Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The standard replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on its financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update, as well as subsequently issued amendments, provide temporary, optional guidance to ease the burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships. The relief provided by this ASU does not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. However, hedging relationships that apply certain optional expedients prior to December 31, 2022, will be retained through the end of the hedging relationship, including for periods after December 31, 2022. We will evaluate the impact of this guidance as contracts are modified through December 2022. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Fair Value Measurements | 3. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to their present value on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. These two types of inputs create a three-tier fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. GAAP categorizes inputs used in fair value measurements into three broad levels as follows: • (Level 1) Quoted prices in active markets for identical assets or liabilities. • (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. • (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs. The Company previously used an interest rate cap to manage its interest rate exposure. However, the Company terminated its interest rate cap in March 2022. These interest rate caps were recorded at fair value. Changes in fair value of our interest rate caps were previously recognized as a component of accumulated other comprehensive loss on the condensed consolidated balance sheets. However, upon termination of the interest rate cap the balance of our accumulated other comprehensive loss was reclassified to the condensed consolidated statement of operations as a component of interest expense. Refer to Note 7— Derivative instruments and hedging activity for additional discussion. Fair value measurements are summarized below: Fair Quoted prices Significant Significant Interest rate cap June 25, 2022 $ — $ — $ — $ — December 25, 2021 $ ( 242 ) $ — $ ( 242 ) $ — The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of thes e instruments. Our outstanding Class A-2 Notes, as defined in Note 6, approximated fair value at June 25, 2022 as they were recently issued. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 25, 2022 | |
Prepaid expenses and other current assets | 4. Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following: June 25, December 25, Prepaid insurance $ 1,507 $ 2,308 Prepaid technology fees 1,886 1,500 Prepaid other & other current assets 3,640 2,119 Total $ 7,033 $ 5,927 The prepaid other & other current assets amounts are primarily composed of prepaid marketing, prepaid commissions and sales taxes. |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 6 Months Ended |
Jun. 25, 2022 | |
Accounts payable and accrued liabilities | 5. Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following: June 25, December 25, Accounts payable $ 8,033 $ 7,684 Accrued inventory 1,799 2,665 Accrued compensation 2,899 5,401 Accrued taxes and penalties 1,504 1,432 Accrued lease termination costs — 588 Accrued technology and subscription fees 207 196 Accrued interest 4,871 1,477 Accrued professional fees 321 2,090 Accrued marketing fees 588 489 Accrued dividend equivalents 1,290 — Other accrued liabilities 963 1,133 Total accounts payable and accrued liabilities $ 22,475 $ 23,155 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 25, 2022 | |
Long-term Debt | 6. Long-term debt Long-term debt consists of the following: June 25, December 25, Class A-2 Notes $ 400,000 $ — 2026 Term Loan — 180,000 Less: current portion ( 4,000 ) ( 5,625 ) Total long-term debt 396,000 174,375 Less: unamortized debt discount and deferred financing costs ( 25,511 ) ( 1,768 ) Total long-term debt, net $ 370,489 $ 172,607 On April 6, 2022 (the “Closing Date”), EWC Master Issuer LLC, a limited-purpose, bankruptcy remote, indirect subsidiary of the Company (the “Master Issuer”), completed a securitization transaction pursuant to which it issued $ 400,000 in aggregate principal amount of Series 2022-1 5.50 % Fixed Rate Senior Secured Notes, Class A-2 (the “Class A-2 Notes”). We received $ 384,328 in proceeds from the issuance of the Class A-2 Notes after deducting the original issue discount of $ 15,672 and prior to paying any expenses related to the issuance. In connection with the issuance of the Class A-2 Notes, the Master Issuer also entered into (i) a revolving financing facility that allows for the issuance of up to $ 40,000 in Variable Funding Notes (”Variable Funding Notes”), and certain letters of credit and (2) an advance funding facility with Bank of America, N.A. (“BofA”), whereby BofA and any other advance funding provider thereunder would, in certain specified circumstances, make certain debt service advances and collateral protection advances (not to exceed $ 5,000 in the aggregate). The Variable Funding Notes were undrawn at closing and as of June 25, 2022. The net proceeds from the issuance of the Class A-2 Notes were used to repay the previous term loan due in 2026 (the “2026 Term Loan”), fund certain reserve amounts under the securitized financing facility, pay the transaction costs associated with the securitized financing facility, and fund a one-time special dividend to stockholders (See Note 15). We incurred a loss on debt extinguishment of $ 1,957 related to the repayment of the 2026 Term Loan which was recorded as a component of interest expense in the accompanying condensed consolidated statement of operations. Of this loss, $ 1,880 was attributable to the write-off of unamortized debt discount and debt issuance costs and the remaining $ 77 was attributable to the payment of fees associated with the repayment of the 2026 Term Loan. In connection with the issuance of the Class A-2 Notes and the Variable Funding Notes we incurred $ 12,419 in lender and third-party fees. Of these fees, $ 10,858 and the original issue discount described above related to the Class A-2 Notes and have been recorded as a reduction of long-term debt on the accompanying condensed consolidated balance sheet. The remaining $ 1,561 of fees along with $ 148 of unamortized deferred financing costs related to the Variable Funding Notes have been recorded as other non-current assets on the accompanying condensed consolidated balance sheet. The debt discount and deferred financing costs attributed to Class A-2 Notes will be amortized to interest expense through the Anticipated Repayment Date, which is defined below, using the effective interest method. The deferred financing costs attributed to the Variable Funding Notes will be amortized to interest expense on a straight-line basis through the Anticipated Repayment Date, which is defined below. The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes.” The Notes were issued in a securitization transaction pursuant to which substantially all of the Company’s revenue-generating assets in the United States are held by the Master Issuer and certain other limited-purpose, bankruptcy remote, wholly-owned direct and indirect subsidiaries of EWC Holding Guarantor (including the Master Issuer) (collectively, the “Securitization Entities”) that have pledged substantially all of their assets to secure the Notes and, with respect to the Securitization Entities other than the Master Issuer, act as guarantors of the Notes. While the Class A-2 Notes are outstanding, payments of principal and interest are required to be made on the Class A-2 Notes on a quarterly basis. The quarterly payments of principal on the Class A-2 Notes may be suspended in the event that the leverage ratio for the Company and its subsidiaries, including the securitization entities, is, in each case, less than or equal to 5.00 x. The legal final maturity date of the Class A-2 Notes is in March of 2052 , but it is anticipated that, unless earlier prepaid to the extent permitted under the Base Indenture, dated April 6, 2022 (the “Indenture”), the Class A-2 Notes will be repaid in March of 2027 (the “Anticipated Repayment Date”). If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to their Anticipated Repayment Date, additional interest will accrue on the Class A-2 Notes equal to the greater of (A) 5.00 % per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of (i) the yield to maturity (adjusted to a quarterly bond equivalent basis) on such anticipated repayment date of the United States Treasury Security having a term closest to ten ( 10 ) years plus (ii) 5.00 %, plus (iii) 3.87 %, exceeds the original interest rate. The Class A-2 Notes rank pari passu with the Variable Funding Notes. Interest on the Variable Funding Notes will be payable at per annum rates based on term SOFR (plus a credit adjustment spread) or the lenders’ commercial paper funding rate plus 212.5 basis points. There is a commitment fee on the unused portion of the Variable Funding Notes facility, equal to 50 basis points per annum. It is anticipated that the principal and interest on the Variable Funding Notes will be repaid in full on or prior to March 2025, subject to two additional one-year extensions at the option of the Company. Following the anticipated date of repayment (and any extensions thereof), additional interest will accrue on the Variable Funding Notes equal to 5.00 % per annum. The Notes are secured by a security interest in substantially all of the assets of the Securitization Entities. The assets of the Securitization Entities include substantially all of the Company’s revenue-generating assets in the United States, which principally consist of franchise-related agreements, certain supply, distribution and logistics services agreements, intellectual property and license agreements for the use of intellectual property. The Notes are subject to a series of financial and non-financial covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain a stated debt service coverage ratio, the sum of system-wide sales being below certain levels on certain measurement dates, certain manager termination events (including in certain cases a change of control of EWC Ventures), an event of default and the failure to repay or refinance the Notes on the applicable anticipated repayment date. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments. |
Derivative instruments and hedg
Derivative instruments and hedging activities | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Derivative instruments and hedging activities | 7. Derivative instruments and hedging activities In December 2018, the Company entered into an interest rate cap derivative instrument which was designated as a cash flow hedge. The Company’s objective was to mitigate the impact of interest expense fluctuations on the Company’s profitability resulting from interest rate changes by capping the LIBOR component of the interest rate at 4.5 % on $ 175,000 of principal outstanding under its long-term debt arrangement, as the interest rate cap provided for payments from the counterparty when LIBOR rises above 4.5 %. The interest rate cap was terminated in March 2022. Changes in the fair value of the interest rate cap were recognized in other comprehensive loss and was reclassified out of accumulated other comprehensive loss and into interest expense upon termination of the interest rate cap. Cash flows related to derivatives qualifying as hedges are included in the same section of the condensed consolidated statements of cash flows as the underlying assets and liabilities being hedged. Refer to Note 3— Fair value measurements for information on the fair value of the Company’s interest rate cap derivative instrument. Our cash flow hedge position related to the interest rate cap derivative instrument is as follows: Balance Sheet June 25, December 25, Derivatives designated as hedging instruments: Interest rate cap, current portion Other current liabilities $ — $ ( 182 ) Interest rate cap, non-current portion Other long-term liabilities — ( 60 ) Total derivative liabilities designated as $ — $ ( 242 ) The table below presents the net unrealized gain recognized in other comprehensive income (“OCI”) resulting from fair value adjustments of hedging instruments: Net Unrealized Gain For the Thirteen Weeks Ended For the Twenty-Six Weeks Ended June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021 Derivatives designated as hedging instruments: Interest rate cap $ — $ 80 $ — $ 239 Total $ — $ 80 $ — $ 239 As a result of the termination of the interest rate cap, we recognized a gain of approximately $ 138 as a component of interest expense on the condensed consolidated statement of operations for the 26 weeks ended June 25, 2022. Of this gain, $ 196 related to fair value adjustments which was partially offset by $ 58 related to cash paid to terminate the interest rate cap. |
Leases
Leases | 6 Months Ended |
Jun. 25, 2022 | |
Lessee Disclosure [Abstract] | |
Leases | 8. Leases The Company leases various corporate-owned centers and office space to support ongoing business operations under non-cancellable lease agreements with terms expiring through 2032. These lease agreements typically have a lease term ranging from one to 10 years. Many of our leases contain renewal options which are exercisable at our discretion. These renewal options allow us to extend certain leases for an additional five to 10 years. Most lease arrangements contain tenant improvement allowances, rent holidays and/or rent escalation clauses. In addition to base rent, certain leases require the Company to pay a portion of real estate taxes, utilities, building operating expenses, insurance and other charges in addition to rent. Certain of our leases are subject to variable lease payments that are determined on a basis other than an index or a rate. As such, they are excluded from the calculation of lease liabilities and right-of-use assets and are expensed as incurred. We currently have two sublease agreements in which we sublease real estate no longer used by the Company to other entities with terms expiring through 2023. Neither of these sublease agreements provides for any renewal options and expire on the same dates as their respective head leases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have no related party leases. We determine if an arrangement is a lease at the inception of the arrangement. A contract is or contains a lease if it conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Lease liabilities are recognized based on the present value of lease payments over the lease term at the arrangement’s commencement date. Right-of-use assets are recognized based on the amount of the measurement of the lease liability adjusted for any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and any initial direct costs incurred. Renewal options are included in the calculation of our right-of-use assets and lease liabilities when it is determined that they are reasonably certain of exercise based on an analysis of the relevant facts and circumstances. As the implicit rate of return of our lease agreements is usually not readily determinable, we generally use our incremental borrowing rate in determining the present value of lease payments. We determine our incremental borrowing rate based on information available to us at the lease commencement date. Information we consider in the determination of our incremental borrowing rate includes factors such as our credit ratings, credit spreads, the term of the lease agreement and the impact of collateral. Certain of our lease arrangements contain lease and non-lease components. We have elected to account for non-lease components related to real estate leases as a part of the related lease components. As such, all fixed payments included in a real estate lease agreement are included in the measurement of the lease liabilities and the corresponding right-of-use assets and variable payments are presented and disclosed as variable lease cost. For all other leases we account lease and non-lease components separately. Leases with an initial term of 12 months or less are not recognized on our balance sheet. We recognize the expense for these leases on a straight-line basis over the lease term. Total lease costs consisted of the following: 13 Weeks Ended 26 Weeks Ended Operating lease costs $ 581 $ 1,179 Variable lease costs 196 384 Sublease income ( 183 ) ( 367 ) Total lease costs $ 594 $ 1,196 Rent expense for the 13 and 26 weeks ended June 26, 2021 was $ 539 and $ 1,153 , respectively. Lease costs for the 13 and 26 weeks ended June 25, 2022 and June 26, 2021, respectively, were included in selling, general and administrative expense on the condensed consolidated statements of operations. Future maturities of operating lease liabilities as of June 25, 2022 were as follows: Fiscal Years Ending 2022 (from June 26, 2022) $ 1,067 2023 1,524 2024 1,346 2025 1,232 2026 880 Thereafter 1,152 Total lease payments 7,201 Less: amount representing interest ( 725 ) Present value of lease liabilities 6,476 Less: current portion ( 1,628 ) Operating lease liabilities, net of current portion $ 4,848 Future minimum rental payments as of December 25, 2021 were as follows: Fiscal Years Ending 2022 $ 2,098 2023 1,524 2024 1,346 2025 1,232 2026 880 Thereafter 1,152 Total $ 8,232 The weighted average lease term and discount rate of our operating leases as of June 25, 2022 were as follows: Weighted average remaining lease term (years) 4.8 Weighted average discount rate 4.3 % Cash paid for amounts included in the measurement of lease liabilities was as follows: 13 Weeks Ended 26 Weeks Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 649 $ 1,297 |
Equity Based Compensation
Equity Based Compensation | 6 Months Ended |
Jun. 25, 2022 | |
E W C Ventures L L C And Subsidiaries [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Equity Based Compensation | 9. Equity Based Compensation Restricted Stock Units During the 13 and 26 weeks ended June 25, 2022, we granted 671 and 41,171 restricted stock units (“RSUs”), respectively, to certain employees under the 2021 Omnibus Incentive Plan that will vest in three equal installments of 33.33 % on each of the first three anniversaries of the date of grant, subject in all cases to continued employment on the applicable vesting date. The total grant date fair value of the RSUs will be recognized as equity-based compensation expense over the vesting period. The weighted average grant date fair value of the RSUs for the 13 and 26 weeks ended June 25, 2022 was $ 29.80 and $ 26.29 , respectively, and was determined based on the fair value of the underlying Class A common stock on the date of grant. We recognized $ 2,000 and $ 5,335 in equity based compensation expense as a component of selling, general and administrative expense on the condensed consolidated statement of operations during the 13 and 26 weeks ended June 25, 2022, respectively. During the 26 weeks ended June 25, 2022, approximately $ 1,248 of equity based compensation expense related to the acceleration of vesting on 75,000 time-based incentive units granted under the Management Holdco, LLC Equity Incentive Plan in accordance with the separation agreement between the Company and our previous chief financial officer. We recognized $ 259 and $ 557 in equity based compensation expense as a component of selling, general and administrative expense on the condensed consolidated statement of operations during the 13 and 26 weeks ended June 26, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 25, 2022 | |
Commitments and contingencies | 10. Commitments and contingencies Litigation The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material effect on its financial position, results of operations, or cash flow. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Revenue from Contract with Customers | 11. Revenue from contracts with customers Contract liabilities consist of deferred revenue resulting from franchise fees, which are generally recognized on a straight-line basis over the term of the underlying franchise agreement. Also included are service revenues from corporate-owned centers, including customer prepayments in connection with the Wax Pass program. Contract liabilities are classified as deferred revenue on the condensed consolidated balance sheets. Deferred franchise fees are reduced as fees are recognized in revenue over the term of the franchise license for the respective center. Deferred service revenues are recognized over time as the services are performed. The following table reflects the change in contract liabilities for the periods indicated: Contract liabilities Balance at December 25, 2021 $ 9,791 Revenue recognized that was included in the contract liability at the beginning ( 1,400 ) Increase, excluding amounts recognized as revenue during the period 1,821 Balance at June 25, 2022 $ 10,212 The weighted average remaining amortization period for deferred revenue is 3.8 years. The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 25, 2022. The Company has elected to exclude short term contracts, sales-based royalties and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in: Amount 2022 (from June 26, 2022) $ 3,200 2023 1,153 2024 1,090 2025 1,019 2026 909 Thereafter 2,841 Total $ 10,212 The summary set forth below represents the balances in deferred revenue as of June 25, 2022 and December 25, 2021: June 25, December 25, Franchise fees $ 7,842 $ 7,911 Service revenue 2,370 1,880 Total deferred revenue 10,212 9,791 Long-term portion of deferred revenue 6,429 6,787 Current portion of deferred revenue $ 3,783 $ 3,004 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 25, 2022 | |
Income Taxes | 12. Income Taxes The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of EWC Ventures. The remaining share of EWC Ventures income or loss is non-taxable to the Company and is not reflected in current or deferred income taxes. EWC Ventures is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, EWC Ventures is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by EWC Ventures is passed through to and included in the taxable income or loss of its members on a pro rata basis, subject to applicable tax regulations. Because EWC Ventures is our financial reporting predecessor and not subject to entity level income tax, no current or deferred income taxes were recorded for the 13 and 26 weeks ended June 26, 2021. We recorded $ 19 and $ 46 in income tax expense for the 13 and 26 weeks ended June 25, 2022 primarily due to state income taxes. The effective tax rate was 0.9 % and 0.8 % for the 13 and 26 weeks ended June 25, 2022, respectively. The effective tax rate for both the 13 and 26 weeks ended June 25, 2022 differs from the U.S. federal statutory rate primarily due to the effects of decreases in the valuation allowance against our deferred taxes, non-taxable income attributable to non-controlling interest and the tax effects of stock compensation. As of June 25, 2022, we continue to conclude that the negative evidence regarding our ability to realize our deferred tax assets outweighed the positive evidence, and the Company has a full valuation allowance against its federal and state net deferred tax assets. The Company has a history of cumulative pre-tax losses for the three previous fiscal years which we believe represents significant negative evidence in evaluating whether our deferred tax assets are realizable. Given these cumulative losses and lack of forecast history we do not believe we can rely on projections of future taxable income exclusive of reversing taxable temporary differences to support the realization of our deferred tax assets. In upcoming quarters, we will continue to evaluate both the positive and negative evidence surrounding our ability to realize our deferred tax assets. Tax Receivable Agreement As of June 25, 2022, future payments under the Tax Receivable Agreement (“TRA”) are expected to be $ 134,720 . Payments made under the TRA represent payments that otherwise would have been made to taxing authorities in the absence of attributes obtained by us as a result of exchanges by our pre-IPO members. Such amounts will be paid only when a cash tax savings is realized as a result of attributes subject to the TRA. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which we are able to utilize certain tax benefits to reduce our cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in other expense on the condensed consolidated statement of operations in the period in which the change occurs. As of June 25, 2022, the TRA liability recorded was $ 64,399 based on current projections of future taxable income taking into consideration the Company’s full valuation allowance against its net deferred tax asset. |
Noncontrolling interest
Noncontrolling interest | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Noncontrolling interest | 13. Noncontrolling interest We are the sole managing member of EWC Ventures and, as a result of this control, and because we have a substantial financial interest in EWC Ventures, we consolidate the financial results of EWC Ventures. We report noncontrolling interests representing the economic interests in EWC Ventures held by the other members of EWC Ventures. Income or loss is attributed to the noncontrolling interests based on their contractual distribution rights, and the relative percentages of EWC Ventures Units by us and the other holders of EWC Ventures Units during the period. The EWC Ventures LLC Agreement permits the members of EWC Ventures to exchange EWC Ventures Units, together with related shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis or, at the election of the Company, for cash at the current fair value on the date of the exchange. Changes in the Company’s ownership interest in EWC Ventures while retaining control of EWC Ventures will be accounted for as equity transactions. As such, future redemptions or direct exchanges of EWC Ventures Units by the other members will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. Additionally, certain members of EWC Ventures hold unvested EWC Ventures Units that are subject to service, performance, and/or market conditions. The vesting of EWC Ventures units will result in a change in ownership and increase the amount recorded as noncontrolling interest and decrease additional paid-in capital. The following table summarizes the ownership of EWC Ventures as of June 25, 2022: June 25, Units Owned Ownership Percentage European Wax Center, Inc. 39,503,811 63.5 % Noncontrolling interest 22,658,035 36.5 % Total 62,161,846 100.0 % The following table presents the effect of changes in the Company’s ownership interest in EWC Ventures on the Company’s equity for the periods indicated: 13 Weeks Ended 26 Weeks Ended Net income attributable to European Wax Center, Inc. $ 968 $ 2,853 Transfers from noncontrolling interests: Increase in additional-paid-in-capital as a result of equity allocations to the noncontrolling interest 4,095 2,946 Net increase in equity of European Wax Center, Inc. due to equity interest transactions with noncontrolling interests $ 5,063 $ 5,799 |
Net Income per Share
Net Income per Share | 6 Months Ended |
Jun. 25, 2022 | |
Net Income per Share | 14. Net income per share Basic net income per share of Class A common stock is computed by dividing net income attributable to Class A common shareholders for the period by the weighted average number of shares of Class A common stock outstanding for the same period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted net income per share of Class A common stock is computed by dividing net income attributable to Class A common shareholders by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities using the more dilutive of either the treasury stock method or the if-converted method. Prior to the Reorganization Transactions, the EWC Ventures capital structure included Class A, Class B, Class C, and Class D Units. We determined that the presentation of net income per unit for the period prior to the Reorganization Transactions would not be meaningful to the users of these unaudited condensed consolidated financial statements due to the significant nature of the Reorganization Transactions on the capital structure. Therefore, net income per unit information has not been presented for the 13 and 26 weeks ended June 26, 2021. The following table sets forth the computation of basic net income per share of Class A common stock for the 13 and 26 weeks ended June 25, 2022: 13 Weeks Ended 26 Weeks Ended June 25, 2022 June 25, 2022 (in thousands, except for share and per share amounts) Net income $ 2,031 $ 6,057 Less: net income attributable to noncontrolling interests 775 2,694 Net income applicable to Class A common shareholders $ 1,256 $ 3,363 Basic weighted average outstanding shares Class A Common Stock 37,911,637 37,432,586 Basic net income per share applicable to common shareholders: Class A Common Stock $ 0.03 $ 0.09 The following table sets forth the computation of diluted net income per share of Class A common stock for the 13 and 26 weeks ended June 25, 2022: 13 Weeks Ended 26 Weeks Ended June 25, 2022 June 25, 2022 (in thousands, except for share and per share amounts) Net income $ 2,031 $ 6,057 Less: net income attributable to noncontrolling interests 853 2,872 Net income applicable to Class A common shareholders $ 1,178 $ 3,185 Diluted weighted average outstanding shares Basic weighted average outstanding shares - Class A Common Stock 37,911,637 37,432,586 Effect of dilutive securities: RSUs 207,550 196,794 Options 36,252 32,598 Diluted weighted average outstanding shares - Class A Common Stock 38,155,439 37,661,978 Diluted net income per share applicable to common shareholders: Class A Common Stock $ 0.03 $ 0.08 Shares of Class B common stock do not share in the earnings or losses attributable to the Company and are therefore not participating securities. As such, separate presentation of basic and diluted net income per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related EWC Ventures Units, are exchangeable into shares of Class A common stock on a one-for-one basis. The 23,943,795 shares of Class B common stock outstanding as of June 25, 2022 were determined to be antidilutive and have therefore been excluded from the computation of diluted net income per share of Class A common stock. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Stockholders' Equity | 15. Stockholders’ equity Secondary Public Offering On May 24, 2022, we completed a secondary public offering (the “Secondary Offering”) of 5,175,000 shares of our Class A common stock at a price of $ 21.50 per share. All of the shares sold in the Secondary Offering were sold by certain of the Company’s stockholders. As such, we did not receive any proceeds from the Secondary Offering. The shares sold in the secondary offering consisted of 2,771,772 existing shares of Class A common stock and 2,403,228 newly issued Class A shares issued in connection with the exercise of exchange rights in which 2,403,228 EWC Ventures Units and corresponding number of shares of Class B common stock were exchanged for the newly issued shares of Class A common stock. Share Exchange Transactions During the 26 weeks ended June 25, 2022 certain EWC Ventures Post-IPO Members exercised their exchange rights and exchanged 156,074 EWC Ventures Units and the corresponding shares of Class B common stock for 156,074 newly issued shares of Class A common stock. These exchange transactions, together with the share exchanges completed in connection with the Secondary Offering, increased the Company’s ownership interest in EWC Ventures. Special Cash Dividend On April 11, 2022, the Board of Directors of the Company declared a special cash dividend of $ 122,227 , or $ 3.30 per share, of Class A common stock which was paid on May 6, 2022 to its Class A common stock holders. The Company also paid dividend equivalents of $ 82,746 , or $ 3.30 per unit, to holders of EWC Ventures Units on May 6, 2022. These payments were funded through existing cash and proceeds from the Company’s securitization transaction (See Note 6 for more information). In addition, we accrued $ 4,384 of dividend equivalents for future payment to holders of unvested EWC Ventures Units to be paid upon the vesting of the related awards. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) - European Wax Center, Inc. and Subsidiaries | 6 Months Ended |
Jun. 25, 2022 | |
Basis of presentation and consolidation | (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 SEC 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. On August 4, 2021, we completed an internal reorganization, referred to as the “Reorganization Transactions” pursuant to which we were appointed the sole managing member of EWC Ventures. The Reorganization Transactions are more fully described in our annual report on Form 10-K for the fiscal year ended December 25, 2021. EWC Ventures has been determined to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior to the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the 13 and 26 weeks ended June 26, 2021 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of EWC Ventures. The amounts as of June 25, 2022 and December 25, 2021 and for the 13 and 26 weeks ended June 25, 2022 reflect the consolidated operations of the Company. The condensed consolidated balance sheet as of December 25, 2021 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 December 25, 2021 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 December 25, 2021 included in our annual report on Form 10-K, except as described below relating to our adoption of Accounting Standards Codification ("ASC") Topic 842, Leases and restricted cash. |
Use of estimates | (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, inventory reserves, 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. |
Implications of being an emerging growth company | (c) Implications of being an Emerging Growth Company 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) Restricted Cash In accordance with the Company’s securitized financing facility, which is described in Note 6, certain cash accounts have been established in the name of Citibank, N.A. (the “Trustee”). The Company holds restricted cash that primarily represents cash collections held by the Trustee, which includes interest, principal, and commitment fee reserves. As of June 25, 2022, the Company had restricted cash held by the Trustee of $ 10,866 . Restricted cash has been combined with cash and cash equivalents when reconciling the beginning and end of period balances in the condensed consolidated statements of cash flows. |
Recently adopted accounting pronouncements | (e) Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases and established ASC Topic 842, Leases (“ASC 842”), which supersedes ASC Topic 840, Leases . ASC 842 requires a lessee to recognize a lease right-of-use (“ROU”) asset and a corresponding lease liability on its balance sheet along with additional qualitative and quantitative disclosures. We adopted this guidance on December 26, 2021 (the beginning of fiscal year 2022) by applying the provisions of this guidance on a modified retrospective basis as of the effective date. As such, comparative periods have not been restated and the disclosures required under the new standard have not been provided for periods prior to December 26, 2021. However, we have provided the applicable disclosures required under ASC 840 for the prior year comparative period. We elected the package of practical expedients whereby we were not required to: i) reassess whether any expired or existing contracts are or contain leases, ii) reassess the lease classification of existing leases and iii) reassess initial direct costs for any existing leases. We did not elect the hindsight practical expedient or the practical expedient related to land easements. We have assessed and updated our business processes, systems and controls to ensure compliance with the recognition and disclosure requirements of the new standard. Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities of $ 6,799 and $ 7,630 , respectively, as of December 26, 2021 to recognize operating leases which were not recognized on our condensed consolidated balance sheets under previous guidance. The adoption of this guidance did not have a material impact on our condensed consolidated statements of operations or on our condensed consolidated statements of cash flows as our leases retained their classifications as determined under previous guidance. |
Recently issued accounting pronouncements not yet adopted | (f) Recently issued accounting pronouncements not yet adopted In June 2017, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)—Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. The standard replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13, and related amendments, are effective for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on its financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments in this update, as well as subsequently issued amendments, provide temporary, optional guidance to ease the burden in accounting for reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. The amendments primarily include relief related to contract modifications and hedging relationships. The relief provided by this ASU does not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. However, hedging relationships that apply certain optional expedients prior to December 31, 2022, will be retained through the end of the hedging relationship, including for periods after December 31, 2022. We will evaluate the impact of this guidance as contracts are modified through December 2022. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of fair value measurements | Fair value measurements are summarized below: Fair Quoted prices Significant Significant Interest rate cap June 25, 2022 $ — $ — $ — $ — December 25, 2021 $ ( 242 ) $ — $ ( 242 ) $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
Schedule of Prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following: June 25, December 25, Prepaid insurance $ 1,507 $ 2,308 Prepaid technology fees 1,886 1,500 Prepaid other & other current assets 3,640 2,119 Total $ 7,033 $ 5,927 |
Accounts payable and accrued _2
Accounts payable and accrued liabilities (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: June 25, December 25, Accounts payable $ 8,033 $ 7,684 Accrued inventory 1,799 2,665 Accrued compensation 2,899 5,401 Accrued taxes and penalties 1,504 1,432 Accrued lease termination costs — 588 Accrued technology and subscription fees 207 196 Accrued interest 4,871 1,477 Accrued professional fees 321 2,090 Accrued marketing fees 588 489 Accrued dividend equivalents 1,290 — Other accrued liabilities 963 1,133 Total accounts payable and accrued liabilities $ 22,475 $ 23,155 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
Schedule of Debt | Long-term debt consists of the following: June 25, December 25, Class A-2 Notes $ 400,000 $ — 2026 Term Loan — 180,000 Less: current portion ( 4,000 ) ( 5,625 ) Total long-term debt 396,000 174,375 Less: unamortized debt discount and deferred financing costs ( 25,511 ) ( 1,768 ) Total long-term debt, net $ 370,489 $ 172,607 |
Derivative instruments and he_2
Derivative instruments and hedging activities (Tables) - European Wax Center, Inc. and Subsidiaries | 6 Months Ended |
Jun. 25, 2022 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |
Schedule of Interest Rate Derivatives | Our cash flow hedge position related to the interest rate cap derivative instrument is as follows: Balance Sheet June 25, December 25, Derivatives designated as hedging instruments: Interest rate cap, current portion Other current liabilities $ — $ ( 182 ) Interest rate cap, non-current portion Other long-term liabilities — ( 60 ) Total derivative liabilities designated as $ — $ ( 242 ) |
Schedule of Net Unrealized Gain Recognized in Other Comprehensive Income (“OCI”) | The table below presents the net unrealized gain recognized in other comprehensive income (“OCI”) resulting from fair value adjustments of hedging instruments: Net Unrealized Gain For the Thirteen Weeks Ended For the Twenty-Six Weeks Ended June 25, 2022 June 26, 2021 June 25, 2022 June 26, 2021 Derivatives designated as hedging instruments: Interest rate cap $ — $ 80 $ — $ 239 Total $ — $ 80 $ — $ 239 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
Leases [Abstract] | |
Schedule of Components of Lease Cost | Total lease costs consisted of the following: 13 Weeks Ended 26 Weeks Ended Operating lease costs $ 581 $ 1,179 Variable lease costs 196 384 Sublease income ( 183 ) ( 367 ) Total lease costs $ 594 $ 1,196 |
Schedule of Maturities of Lease Liabilities | Future maturities of operating lease liabilities as of June 25, 2022 were as follows: Fiscal Years Ending 2022 (from June 26, 2022) $ 1,067 2023 1,524 2024 1,346 2025 1,232 2026 880 Thereafter 1,152 Total lease payments 7,201 Less: amount representing interest ( 725 ) Present value of lease liabilities 6,476 Less: current portion ( 1,628 ) Operating lease liabilities, net of current portion $ 4,848 |
Schedule of Future maturities of operating lease obligations | Future minimum rental payments as of December 25, 2021 were as follows: Fiscal Years Ending 2022 $ 2,098 2023 1,524 2024 1,346 2025 1,232 2026 880 Thereafter 1,152 Total $ 8,232 |
Schedule of Weighted Average Lease Term and Discount Rate of Operating Leases | The weighted average lease term and discount rate of our operating leases as of June 25, 2022 were as follows: Weighted average remaining lease term (years) 4.8 Weighted average discount rate 4.3 % |
Schedule of Payment for Measurement of Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities was as follows: 13 Weeks Ended 26 Weeks Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 649 $ 1,297 |
Revenue from Contract with Cu_2
Revenue from Contract with Customers (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
Summary of Balances in Deferred Revenue | The summary set forth below represents the balances in deferred revenue as of June 25, 2022 and December 25, 2021: June 25, December 25, Franchise fees $ 7,842 $ 7,911 Service revenue 2,370 1,880 Total deferred revenue 10,212 9,791 Long-term portion of deferred revenue 6,429 6,787 Current portion of deferred revenue $ 3,783 $ 3,004 |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Changes in Contract Liabilities | The following table reflects the change in contract liabilities for the periods indicated: Contract liabilities Balance at December 25, 2021 $ 9,791 Revenue recognized that was included in the contract liability at the beginning ( 1,400 ) Increase, excluding amounts recognized as revenue during the period 1,821 Balance at June 25, 2022 $ 10,212 |
Schedule of Revenue Expected to be Recognized in Future Related to Performance Obligations | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 25, 2022. The Company has elected to exclude short term contracts, sales-based royalties and any other variable consideration recognized on an “as invoiced” basis. Contract liabilities to be recognized in: Amount 2022 (from June 26, 2022) $ 3,200 2023 1,153 2024 1,090 2025 1,019 2026 909 Thereafter 2,841 Total $ 10,212 |
Noncontrolling interest (Tables
Noncontrolling interest (Tables) - E W C Ventures L L C And Subsidiaries [Member] | 6 Months Ended |
Jun. 25, 2022 | |
Noncontrolling Interest [Line Items] | |
Summary of ownership of EWC Ventures LLC | The following table summarizes the ownership of EWC Ventures as of June 25, 2022: June 25, Units Owned Ownership Percentage European Wax Center, Inc. 39,503,811 63.5 % Noncontrolling interest 22,658,035 36.5 % Total 62,161,846 100.0 % |
Summary of ownership interests in EWC Ventures LLC on equity | The following table presents the effect of changes in the Company’s ownership interest in EWC Ventures on the Company’s equity for the periods indicated: 13 Weeks Ended 26 Weeks Ended Net income attributable to European Wax Center, Inc. $ 968 $ 2,853 Transfers from noncontrolling interests: Increase in additional-paid-in-capital as a result of equity allocations to the noncontrolling interest 4,095 2,946 Net increase in equity of European Wax Center, Inc. due to equity interest transactions with noncontrolling interests $ 5,063 $ 5,799 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 6 Months Ended |
Jun. 25, 2022 | |
European Wax Center, Inc. and Subsidiaries | |
Schedule of Computation of Basic Net Income Per Share | The following table sets forth the computation of basic net income per share of Class A common stock for the 13 and 26 weeks ended June 25, 2022: 13 Weeks Ended 26 Weeks Ended June 25, 2022 June 25, 2022 (in thousands, except for share and per share amounts) Net income $ 2,031 $ 6,057 Less: net income attributable to noncontrolling interests 775 2,694 Net income applicable to Class A common shareholders $ 1,256 $ 3,363 Basic weighted average outstanding shares Class A Common Stock 37,911,637 37,432,586 Basic net income per share applicable to common shareholders: Class A Common Stock $ 0.03 $ 0.09 The following table sets forth the computation of diluted net income per share of Class A common stock for the 13 and 26 weeks ended June 25, 2022: 13 Weeks Ended 26 Weeks Ended June 25, 2022 June 25, 2022 (in thousands, except for share and per share amounts) Net income $ 2,031 $ 6,057 Less: net income attributable to noncontrolling interests 853 2,872 Net income applicable to Class A common shareholders $ 1,178 $ 3,185 Diluted weighted average outstanding shares Basic weighted average outstanding shares - Class A Common Stock 37,911,637 37,432,586 Effect of dilutive securities: RSUs 207,550 196,794 Options 36,252 32,598 Diluted weighted average outstanding shares - Class A Common Stock 38,155,439 37,661,978 Diluted net income per share applicable to common shareholders: Class A Common Stock $ 0.03 $ 0.08 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 26, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 6,476 | |
European Wax Center, Inc. [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Restricted Cash | $ 10,866 | |
ASC 842 Adoption [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 6,799 | |
Operating lease liabilities | $ 7,630 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | $ 0 | $ 242 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | 0 | 0 |
Significant observable inputs (Level 2) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | 0 | 242 |
Significant unobservable inputs (Level 3) | ||
Fair Value Option Quantitative Disclosures [Line Items] | ||
Interest rate cap | $ 0 | $ 0 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Prepaid Expenses And Other Current Assets Details [Line Items] | ||
Prepaid insurance | $ 1,507 | $ 2,308 |
Prepaid technology fees | 1,886 | 1,500 |
Prepaid other & other current assets | 3,640 | 2,119 |
Total | $ 7,033 | $ 5,927 |
Accounts payable and accrued _3
Accounts payable and accrued liabilities (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Payables And Accruals [Line Items] | ||
Accounts payable | $ 8,033 | $ 7,684 |
Accrued inventory | 1,799 | 2,665 |
Accrued compensation | 2,899 | 5,401 |
Accrued taxes and penalties | 1,504 | 1,432 |
Accrued lease termination costs | 0 | 588 |
Accrued technology and subscription fees | 207 | 196 |
Accrued interest | 4,871 | 1,477 |
Accrued professional fees | 321 | 2,090 |
Accrued marketing fees | 588 | 489 |
Accrued dividend equivalents | 1,290 | 0 |
Other accrued liabilities | 963 | 1,133 |
Total Accounts payable and accrued liabilities | $ 22,475 | $ 23,155 |
Long-term Debt - Schedule of De
Long-term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 25, 2022 | Apr. 06, 2022 | Dec. 25, 2021 |
Class A-2 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Term Loan | $ 400,000 | ||
European Wax Center, Inc. and Subsidiaries | |||
Debt Instrument [Line Items] | |||
Less: current portion | $ (4,000) | $ (5,625) | |
Total long-term debt | 396,000 | 174,375 | |
Less: unamortized debt discount and deferred financing costs | (25,511) | (1,768) | |
Total long-term debt, net | 370,489 | 172,607 | |
European Wax Center, Inc. and Subsidiaries | Class A-2 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Term Loan | 400,000 | 0 | |
European Wax Center, Inc. and Subsidiaries | 2026 Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Term Loan | $ 0 | $ 180,000 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Apr. 06, 2022 USD ($) OperatingSegment | Mar. 31, 2025 | Jun. 25, 2022 USD ($) | Jun. 26, 2021 USD ($) | Dec. 25, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Increase (Decrease) | 3.87% | ||||
Debt Instrument, Covenant Description | The Notes are subject to a series of financial and non-financial covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain a stated debt service coverage ratio, the sum of system-wide sales being below certain levels on certain measurement dates, certain manager termination events (including in certain cases a change of control of EWC Ventures), an event of default and the failure to repay or refinance the Notes on the applicable anticipated repayment date. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective and certain judgments. | ||||
Debt Instrument, Description | If the Master Issuer has not repaid or refinanced the Class A-2 Notes prior to their Anticipated Repayment Date, additional interest will accrue on the Class A-2 Notes equal to the greater of (A) 5.00% per annum and (B) a per annum interest rate equal to the excess, if any, by which the sum of (i) the yield to maturity (adjusted to a quarterly bond equivalent basis) on such anticipated repayment date of the United States Treasury Security having a term closest to ten (10) years plus (ii) 5.00%, plus (iii) 3.87%, exceeds the original interest rate. The Class A-2 Notes rank pari passu with the Variable Funding Notes. | ||||
Payments of debt extinguishment costs | $ 77 | ||||
Loss on debt extinguishment | $ (1,957) | $ 0 | |||
Class A-2 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Increase (Decrease) | 5% | ||||
Debt instrument, Term | 10 years | ||||
Term loan | $ 400,000 | ||||
Leverage ratio | 5 | ||||
Unamortized deferred financing costs | $ 10,858 | ||||
Debt Discount | 15,672 | ||||
Proceeds from Issuance of Debt | $ 384,328 | ||||
Fixed Rate Senior Secured Notes | 5.50% | ||||
Variable Funding Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum Debt Service and Collateral Protection Advances | $ 40,000 | ||||
Number of additional extensions | OperatingSegment | 2 | ||||
Unamortized deferred financing costs | 1,561 | ||||
Variable Funding Notes [Member] | Other Noncurrent Assets [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized deferred financing costs | 148 | ||||
Class A-2 Notes and Variable Funding Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized deferred financing costs | 12,419 | ||||
Scenario Forecast | Variable Funding Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Increase (Decrease) | 5% | ||||
2026 Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Payments of debt extinguishment costs | 77 | ||||
Loss on debt extinguishment | 1,957 | ||||
Write off of deferred loan costs | $ 1,880 | ||||
Anticipated Repayment [Member] | Class A-2 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Mar. 31, 2027 | ||||
Legal Maturity [Member] | Class A-2 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Mar. 31, 2052 | ||||
Indenture [Member] | Class A-2 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Issuance Date | Apr. 06, 2022 | ||||
Commercial Paper [Member] | SOFR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis point | 212.50% | ||||
Advance Funding Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum Debt Service and Collateral Protection Advances | $ 5,000 | ||||
European Wax Center, Inc. and Subsidiaries | Class A-2 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Term loan | 400,000 | $ 0 | |||
European Wax Center, Inc. and Subsidiaries | 2026 Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Term loan | $ 0 | $ 180,000 |
Derivative instruments and he_3
Derivative instruments and hedging activities - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 25, 2022 | Jun. 26, 2021 | Dec. 31, 2018 | |
Derivatives Fair Value [Line Items] | |||
Gain Fair Value Adjustments | $ 196,000 | $ 0 | |
Interest Rate Cap | |||
Derivatives Fair Value [Line Items] | |||
Gain on interest rate | 138,000 | ||
Gain Fair Value Adjustments | 196,000 | ||
Cash paid | $ 58,000 | ||
European Wax Center, Inc. and Subsidiaries | |||
Derivatives Fair Value [Line Items] | |||
Derivative Liability, Notional Amount | $ 175,000 | ||
European Wax Center, Inc. and Subsidiaries | Interest Rate Floor | London Interbank Offered Rate (LIBOR) [Member] | |||
Derivatives Fair Value [Line Items] | |||
Derivative, Variable Interest Rate | 4.50% | ||
European Wax Center, Inc. and Subsidiaries | Interest Rate Cap | London Interbank Offered Rate (LIBOR) [Member] | |||
Derivatives Fair Value [Line Items] | |||
Derivative, Cap Interest Rate | 4.50% |
Derivative instruments and he_4
Derivative instruments and hedging activities - Summary of Interest Rate Derivative (Details) - European Wax Center, Inc. and Subsidiaries - Interest Rate Cap - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | $ 0 | $ (242) |
Other Current Liabilities [Member] | ||
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | 0 | (182) |
Other Long-Term Liabilities [Member] | ||
Derivatives designated as hedging instruments: | ||
Total derivative liabilities designated as hedging instruments | $ 0 | $ (60) |
Derivative instruments and he_5
Derivative instruments and hedging activities - Summary of Unrealized Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2022 | Jun. 26, 2021 | Mar. 27, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | |
Derivatives designated as hedging instruments: | |||||
Total | $ 80 | $ 159 | |||
Other Comprehensive Income (Loss) | Designated as Hedging Instrument | |||||
Derivatives designated as hedging instruments: | |||||
Total | $ 0 | 80 | $ 0 | $ 239 | |
Other Comprehensive Income (Loss) | Interest Rate Cap | Designated as Hedging Instrument | |||||
Derivatives designated as hedging instruments: | |||||
Total | $ 0 | $ 80 | $ 0 | $ 239 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 25, 2022 | Jun. 25, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 581 | $ 1,179 |
Variable lease costs | 196 | 384 |
Sublease income | (183) | (367) |
Total lease costs | $ 594 | $ 1,196 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 25, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2022 (from June 26, 2022) | $ 1,067 |
2023 | 1,524 |
2024 | 1,346 |
2025 | 1,232 |
2026 | 880 |
Thereafter | 1,152 |
Total lease payments | 7,201 |
Less: amount representing interest | (725) |
Present value of lease liabilities | 6,476 |
Less: current portion | (1,628) |
Operating lease liabilities, net of current portion | $ 4,848 |
Leases - Schedule of Future mat
Leases - Schedule of Future maturities of operating lease obligations (Details) $ in Thousands | Dec. 25, 2021 USD ($) |
Leases [Abstract] | |
2022 | $ 2,098 |
2023 | 1,524 |
2024 | 1,346 |
2025 | 1,232 |
2026 | 880 |
Thereafter | 1,152 |
Total | $ 8,232 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Lease Term and Discount Rate of Operating Leases (Details) | Jun. 25, 2022 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 4 years 9 months 18 days |
Weighted average discount rate | 4.30% |
Leases - Schedule of payments f
Leases - Schedule of payments for measurement of lease liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 25, 2022 | Jun. 25, 2022 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 649 | $ 1,297 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 26, 2021 | Jun. 26, 2021 | Jun. 25, 2022 | |
Lessee, Lease, Description [Line Items] | |||
Rent Expense | $ 539 | $ 1,153 | |
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee Operating Lease Term Of Contract | 10 years | ||
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee Operating Lease Term Of Contract | 1 year |
Equity Based Compensation - Add
Equity Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 25, 2022 | Jun. 26, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | Jun. 25, 2021 | |
Restricted Stock Units (RSUs) [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 259 | $ 557 | |||
Time Based Units [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 75,000 | ||||
Time Based Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Equity based compensation | $ 2,000 | $ 5,335 | |||
Expense related to acceleration of vesting | $ 1,248 | ||||
Common Class A [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Weighted-Average Grant Date Fair Value, Granted | $ 29.80 | $ 26.29 | |||
The 2021 Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Directors and Employees [Member] | |||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Granted | 671 | 41,171 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33.33% |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Schedule of Changes in Contract Liabilities (Details) - European Wax Center, Inc. and Subsidiaries $ in Thousands | 6 Months Ended |
Jun. 25, 2022 USD ($) | |
Disaggregation Of Revenue [Line Items] | |
Balance at December 25, 2021 | $ 9,791 |
Revenue recognized that was included in the contract liability at the beginning of the year | (1,400) |
Increase, excluding amounts recognized as revenue during the period | 1,821 |
Balance at June 25, 2022 | $ 10,212 |
Revenue from Contract with Cu_4
Revenue from Contract with Customers - Additional Information (Details) | Jun. 25, 2022 |
European Wax Center, Inc. and Subsidiaries | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-16 | |
Disaggregation Of Revenue [Line Items] | |
Weighted average remaining amortization period of deferred revenue | 3 years 9 months 18 days |
Revenue from Contract with Cu_5
Revenue from Contract with Customers - Schedule of Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Disaggregation Of Revenue [Line Items] | ||
2022 (from June 26, 2022) | $ 3,200 | |
2023 | 1,153 | |
2024 | 1,090 | |
2025 | 1,019 | |
2026 | 909 | |
Thereafter | 2,841 | |
Total deferred revenue | $ 10,212 | $ 9,791 |
Revenue from Contract with Cu_6
Revenue from Contract with Customers - Summary of Balances in Deferred Revenue (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | Jun. 25, 2022 | Dec. 25, 2021 |
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | $ 10,212 | $ 9,791 |
Deferred revenue, net of current portion | 6,429 | 6,787 |
Current portion of deferred revenue | 3,783 | 3,004 |
Franchise Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | 7,842 | 7,911 |
Service Revenue [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total deferred revenue | $ 2,370 | $ 1,880 |
Income Taxes (Additional Inform
Income Taxes (Additional Information) (Details) - European Wax Center, Inc. and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 25, 2022 | Jun. 26, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | Jul. 25, 2022 | Dec. 25, 2021 | |
Income tax expense | $ 19 | $ 0 | $ 46 | $ 0 | ||
Effective income tax rate | 0.90% | 0.80% | ||||
Future payments under tax receivable agreement | $ 134,720 | |||||
Liability under tax receivable agreement | $ 64,399 | $ 64,399 | $ 59,167 |
Noncontrolling interest - Summa
Noncontrolling interest - Summary of the ownership of EWC Ventures LLC (Details) | Jun. 25, 2022 shares |
Noncontrolling Interest [Line Items] | |
Units owned | 62,161,846 |
Ownership percentage | 100% |
European Wax Center, Inc. [Member] | |
Noncontrolling Interest [Line Items] | |
Units owned by parent | 39,503,811 |
Ownership percentage by parent | 63.50% |
Noncontrolling Interest [Member] | |
Noncontrolling Interest [Line Items] | |
Units owned by noncontrolling interest | 22,658,035 |
Ownership percentage by noncontrolling interest | 36.50% |
Noncontrolling interest - Sum_2
Noncontrolling interest - Summary of ownership interests in EWC Ventures LLC on equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 25, 2022 | Jun. 25, 2022 | |
Minority Interest [Line Items] | ||
Net income attributable to European Wax Center, Inc. | $ 968 | $ 2,853 |
Decrease in additional-paid-in-capital as a result of equity allocations to the noncontrolling interest | (4,095) | (2,946) |
Net increase in equity of European Wax Center, Inc. due to equity interest transactions with noncontrolling interests | $ (5,063) | $ (5,799) |
Net Income per Share - Schedule
Net Income per Share - Schedule of Computation of Basic Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 25, 2022 | Mar. 26, 2022 | Jun. 26, 2021 | Mar. 27, 2021 | Jun. 25, 2022 | Jun. 26, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Net income | $ 6,057 | $ 8,831 | ||||
Class B Units [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Effect of dilutive securities: | ||||||
Dilutive Securities | 207,550 | 196,794 | ||||
European Wax Center, Inc. and Subsidiaries | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Net income | $ 2,031 | $ 4,026 | $ 7,729 | $ 1,102 | $ 6,057 | $ 8,831 |
European Wax Center, Inc. and Subsidiaries | Share-Based Payment Arrangement Option [Member] | ||||||
Effect of dilutive securities: | ||||||
Dilutive Securities | 36,252 | 32,598 | ||||
European Wax Center, Inc. and Subsidiaries | Class A Units [Member] | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Net income | 2,031 | 6,057 | ||||
Less: net income attributable to noncontrolling interests | 775 | 2,694 | ||||
Less: net income attributable to noncontrolling interests | 853 | 2,872 | ||||
Net Income applicable to Class A common shareholders | 1,256 | 3,363 | ||||
Net Income applicable to Class A common shareholders | $ 1,178 | $ 3,185 | ||||
Basic weighted average outstanding shares | 37,911,637 | 37,432,586 | ||||
Basic net income per share applicable to common shareholders: | ||||||
Earnings Per Share, Basic | $ 0.03 | $ 0.09 | ||||
Effect of dilutive securities: | ||||||
Diluted weighted average outstanding shares | 38,155,439 | 37,661,978 | ||||
Diluted net income per share applicable to common shareholders: | $ 0.03 | $ 0.08 |
Net Income per Share - Addition
Net Income per Share - Additional Information (Details) | 6 Months Ended |
Jun. 25, 2022 shares | |
Class B Common Stock [Member] | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Common Stock, Shares, Outstanding | 23,943,795 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
May 24, 2022 | Apr. 11, 2022 | Jun. 25, 2022 | Jun. 26, 2021 | |
Dividends to holders of Class A common stock | $ (122,227) | $ (122,227) | $ 0 | |
Dividend equivalents to holders of EWC Ventures units | $ (82,746) | $ (82,746) | $ 0 | |
Common Stock, Dividends, Per Share, Declared | $ 3.30 | |||
Accrued dividend equivalent | $ 4,384 | |||
Common Class A [Member] | ||||
Converted To Class a Common Stock | 156,074 | |||
Common Stock, Dividends, Per Share, Declared | $ 3.30 | |||
Common Class B [Member] | ||||
Converted To Class a Common Stock | 2,403,228 | 156,074 | ||
Secondary Public Offering [Member] | Common Class A [Member] | ||||
Shares Issued, Price Per Share | $ 21.50 | |||
Common stock sold by selling shareholders | 5,175,000 | |||
Converted To Class a Common Stock | 2,403,228 | |||
Secondary Public Offering [Member] | Class A Shares [Member] | ||||
Common stock sold by selling shareholders | 2,771,772 |