Q2 Earnings Roundup: European Wax Center (NASDAQ:EWCZ) And The Rest Of The Leisure Facilities Segment

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the leisure facilities industry, including European Wax Center (NASDAQ:EWCZ) and its peers.

Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.

The 12 leisure facilities stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 13.8% below.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Leisure Facilities stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.

European Wax Center (NASDAQ:EWCZ)

Founded by two siblings, European Wax Center (NASDAQ:EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.

European Wax Center reported revenues of $59.87 million, up 1.3% year on year. This print fell short of analysts’ expectations by 2.4%. Overall, it was a slower quarter for the company with full-year revenue guidance missing analysts’ expectations.

David Berg, Executive Chairman and CEO of European Wax Center, Inc. stated, “I’m excited to be back as CEO at European Wax Center during an important time for our business. While the second quarter marked a period of top line growth, anchored by the consistency and stability of our core guests, the ongoing macroeconomic environment continues to pressure consumer spending and our ability to attract and retain new guests to our brand. We have also worked with our franchise partners to reevaluate near-term development plans and extend the timeline of new center openings to allow more capacity and resources to improve overall performance. As a result, we are updating our full year financial guidance, including our outlook for new center openings.”

Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $6.81.

Read our full report on European Wax Center here, it’s free.

Best Q2: Life Time (NYSE:LTH)

With over 150 locations and gyms that include saunas and steam rooms, Life Time (NYSE:LTH) is an upscale fitness club emphasizing holistic well-being and fitness.

Life Time reported revenues of $667.8 million, up 18.9% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with an impressive beat of analysts’ same-store sales and earnings estimates.

Life Time delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 15.5% since reporting. It currently trades at $24.02.

Is now the time to buy Life Time? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Xponential Fitness (NYSE:XPOF)

Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE:XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.

Xponential Fitness reported revenues of $76.52 million, down 1.1% year on year, falling short of analysts’ expectations by 8.5%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

Xponential Fitness delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 29.1% since the results and currently trades at $12.06.

Read our full analysis of Xponential Fitness’s results here.

Sphere Entertainment (NYSE:SPHR)

Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE:SPHR) hosts live entertainment events and distributes content across various media platforms.

Sphere Entertainment reported revenues of $273.4 million, up 112% year on year. This print met analysts’ expectations. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ earnings estimates.

Sphere Entertainment pulled off the fastest revenue growth among its peers. The stock is up 15.2% since reporting and currently trades at $47.

Read our full, actionable report on Sphere Entertainment here, it’s free.

Live Nation (NYSE:LYV)

Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE:LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.

Live Nation reported revenues of $6.02 billion, up 7% year on year. This result met analysts’ expectations. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ operating margin estimates.

The stock is up 17.8% since reporting and currently trades at $111.53.

Read our full, actionable report on Live Nation here, it’s free.

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