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European Wax Center pops in trading debut

European Wax Center made its public debut on the Nasdaq under the ticker ‘EWCZ’. European Wax Center CEO David Berg joins Yahoo Finance Live to discuss.

Video transcript

- We've got a new entry on the NASDAQ today. The European Wax Center raising $180 million in its IPO listing under the ticker EW season. We saw shares just begin trading a short time ago. The stock getting a big pop on the day, up about 13% after the Texas based company priced shares at $17 each. That's about in the middle of its range.

Let's bring in the CEO of the European Wax Center, we've got David bERG. And David, perfect timing. We heard all the cheers behind you as the shares began trading. I imagine, you like so many companies, are really seeing a healthy bounce back right now after what was a really slow period during the pandemic. Talk to me about the timing of the IPO? Why you wanted to get out in front here and go public?

DAVID BERG: Sure, we're the leader in the industry. Always have been since our founders started the business back in 2004 and really professionalize the out-of-home waxing category. It was just a logical next step for us. We made the right investments in terms of our human capital, our infrastructure that really allows us to take the next step as a public company.

And it does a couple of things for us. We talk about instilling unapologetic confidence for our guests. And this is another confidence builder for us as the brand. For our associates, to make sure that we attract and retain the greatest associates that we have already. To our franchisees, who deliver services every single day to delight our guests. And finally, to continue to give our guests confidence to keep coming back to the leader in the industry.

- You know, I'm not going to present myself as a waxing expert here, but I will kind of talk about the numbers. And I'd love to get your take on kind of the growth you're seeing. As you guys point out in your prospectus here in the S-1 filing, you had increased net revenue from 2016 to 2019. Only prepaid numbers here. $107 million to $154, CAGR at 13%.

But we talk about the seasonality of this business too kind of in the summers and holidays. What can you do to maybe broaden out the growth beyond those? And is that just kind of systematic to, I guess, the waxing industry?

DAVID BERG: Yeah, really modestly seasonality. A little bit more in the summertime as folks get ready for the beach. And a bit of a pop at holidays. But generally speaking, very, very smooth throughout the four quarters of the year.

We're really focused on two things. How do we continue our thoughtful growth and adding units across the United States? And similarly, how do we just continue to drive same store sales comps as we continue to delight guests every time they come in, every center, with every waxing experience. So it's a very straightforward and focused growth plan for us as we go forward.

- Yeah, on that growth, you've got more than 800 locations already across the US. We're all familiar with the services in these stores. But I wonder what other channels of revenue you're looking to build on through products, for example. What do you see in your future on that front beyond the services?

DAVID BERG: Yeah, so we're going to stay focused. We are the experts in wax, champions in confidence. And we're going to stay focused on that. And that was really what our founders believed in, in making waxing the star of the show. So we don't believe that we have to go far afield from that. We're going to go where our brand gives us permission or where our guests give us permission to play. And that's in all things wax.

So you mentioned the retail products. There 31 skews, they're proprietary to us, our recipe. And these are products that enhance the service, that add to the efficacy of the waxing experience. So we don't sell body wash and shampoos, we actually sell those products that are going to make your experience that much better.

- David Berg, CEO of European Wax Center, congratulations on the listing today. I appreciate the time.