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Randal J. Konik * | Equity Analyst(212) 708-2719 | rkonik@jefferies.comCorey Tarlowe * | Equity Analyst(212) 323-7541 | ctarlowe@jefferies.comCarlos Gallagher * | Equity Associate+1 (786) 535-2025 | cgallagher1@jefferies.comKylie Cohu * | Equity Analyst(212) 778-8701 | kcohu@jefferies.comMantero Moreno-Cheek * | Equity Associate(212) 778-8407 | mmorenocheek@jefferies.comMina Solujic * | Equity Associate+1 (212) 444-4298 | msolujic@jefferies.com Summary of ChangesCompanyEuropean Wax CenterEWCZ^Prior trading day's closing price unless otherwise noted.Please see important disclosure information on pages 6 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Chart 1 - EWCZ Income Statement.European Wax Center, Inc.Income Statement (fiscal year end December 31)(in Millions, except per share amounts)Total SalesCost of RevenueGross ProfitTotal Operating ExpensesAdj. Operating Income (Loss)Adjusted EBITDANet Interest Expense (Income)Pretax IncomeIncome TaxesAdj. Net IncomeMargin AnalysisGross MarginTotal Operating ExpensesAdjusted Operating IncomeAdjusted EBITDAPretax IncomeTax Rate (% of Pretax)Net Income% Growth, YoYSalesGross MarginTotal Operating ExpensesAdjusted Operating IncomeAdjusted EBITDANet IncomeBPs Change, YoYGross MarginTotal Operating ExpensesAdjusted Operating IncomeAdjusted EBITDANet IncomeSame Store SalesTotal CompanySource: Company data, Jefferies estimates.Source: Company data, Jefferies estimatesPlease see important disclosure information on pages 6 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. The Long View: European Wax CenterInvestment Thesis / Where We DifferWe believe EWCZ's strong brand, attractive recurring revenue base (via WaxPass sales), and enticing unit development opportunity could help createmeaningful long-term competitive advantages for the company, particularlygiven the highly fragmented nature of the US Hair Removal industry/OOH (out-of-home) waxing market.Base Case,$15, +188%•LSD% unit growth•Expansion of services alongside Wax Passsalesgrowth provides predictable,recurringrevenue, driving healthy FCF generation.•$15 PT, based on F'26E EBITDA of $75M; ~15xEV/EBITDA.Sustainability MattersTop material issue(s): 1)Product Quality and Safetyare of paramount focus, and EWCZ's productsundergo rigorous safety, clinical, and dermatological testing prior to hitting the market.2) EmployeeEngagement, Diversity, & Inclusion.With >60% of the company’s leaders females and >70% fromunderrepresented groups, EWCZ remains focused on creating a more inclusive and equitable workplace.Company Target(s): 1)EWCZ doesn't farm bees or harm them during the end of the harvestingprocess.2)The company's total energy consumption was ~2,179 MMBtu in 2022, and mgmt expects tofurther improve upon this number.3)The company provides associates with a $500/year professionaldevelopment stipend and noted 40 corporate associates took part in the program in 2022.Qs to mgmt: 1)What are the key areas you're focused on improving from an ESG perspective movingforward?2)What steps are you taking to further improve your environmental footprint?3)Where do youcurrently source your wax from and are there more sustainable methods of doing so?Multiline and Specialty Retailers & Distributors ESG Integration RefreshPlease see important disclosure information on pages 6 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,$24, +361%•Customer adoption of new services outpacesexpectations,drivingcomp growth.•New marketing initiatives drive more efficientcustomer acq., resulting in outsized adj. EBITDAgrowth.•Wax Pass program adoption is better thanexpected, driving outsized revenue growth.•$24 Upside PT, based on F'26E EBITDA of $87M;~19x EV/EBITDA. Risk/Reward - 12 Month View252015105020252024better-than-expectedDownside Scenario,$3, -42%•Macro headwinds alongside weaker-than-expected customer adoption of new servicesdrivefranchisees away from new builds,impacting unit growth.•Wax Pass members trade out of theprogram, resulting in weaker revenue and profitpredictability.•Further deterioration of the macro putspressure on the company's core consumers,driving increased churn and fewer visits.•Weaker revenue drives fixed-cost deleverage,impacting margin performance.•$3 Downside PT, based on F'26E EBITDA of$42M; ~8x EV/EBITDA.Catalysts•Potential laser hair removal launch across theentire network•Unit expansion•Marketing enhancements to drive improvedcustomer acquisition and Wax Pass adoption 4 Financials: European Wax CenterEstimate changesUSDRev. (MM)Cons. Rev.PreviousEBITDA (MM)Cons. EBITDAPreviousValuation metricsUSDEV/RevP/RevEV/EBITDAPlease see important disclosure information on pages 6 - 12 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. 2023A2024A221.0216.9--7