Let’s dig into the relative performance of European Wax Center (NASDAQ:EWCZ) and its peers as we unravel the now-completed Q3 leisure facilities earnings season.
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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 4.5% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.5% 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 $55.43 million, flat year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
David Berg, Executive Chairman and CEO of European Wax Center, Inc. stated, “We are pleased that our third quarter results were in line with the revised expectations we provided in August. Over the past three months, I’ve been immersing myself in the business, refining our key focus areas and developing a robust action plan focused on driving new guests and ticket growth. Over time, we believe our efforts will enhance unit economics and financial returns for our franchise partners, enable thoughtful growth for European Wax Center, and deliver long-term value to our stakeholders.”
Unsurprisingly, the stock is down 20.2% since reporting and currently trades at $6.40.
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Best Q3: 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 $7.65 billion, down 6.2% year on year, falling short of analysts’ expectations by 2.1%. However, the business still had a very strong quarter with a solid beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 6.1% since reporting. It currently trades at $131.47.
Weakest Q3: Dave & Buster's (NASDAQ:PLAY)
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.Dave & Buster's reported revenues of $453 million, down 3% year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted a significant miss of analysts’ EPS and adjusted operating income estimates.
Dave & Buster's delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 23.8% since the results and currently trades at $28.06.
Topgolf Callaway (NYSE:MODG)
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE:MODG) sells golf equipment and operates technology-driven golf entertainment venues.Topgolf Callaway reported revenues of $1.01 billion, down 2.7% year on year. This number surpassed analysts’ expectations by 3.2%. Taking a step back, it was a satisfactory quarter as it also logged a solid beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.
The stock is down 18.5% since reporting and currently trades at $7.70.
Vail Resorts (NYSE:MTN)
Founded by two Aspen, Colorado ski patrol guides, Vail Resorts (NYSE:MTN) is a mountain resort company offering luxury experiences in over 30 locations across the globe.Vail Resorts reported revenues of $260.3 million, flat year on year. This print topped analysts’ expectations by 4.2%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $189.81.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
