We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
EWCZ vs. SBH: Which Beauty Retail Stock is a Better Buy Now?
Read MoreHide Full Article
Key Takeaways
EWCZ saw a 54.8% stock gain in 3 months, beating SBH's 27.2%, amid digital and franchise model strength.
EWCZ is refining marketing, expanding franchise support, and targeting underpenetrated areas for growth.
SBH's ecommerce rose 6% as digital strategy gains, despite softness in hair care and traffic headwinds.
European Wax Center (EWCZ - Free Report) and Sally Beauty Holdings (SBH - Free Report) cater to the evolving needs of the beauty and personal care industry, each targeting different yet complementary segments. While EWCZ emphasizes a service-driven model with its franchised waxing centers, offering specialized grooming experiences, SBH focuses on retail by supplying professional-grade beauty products to both consumers and salon professionals.
This article explores their business models, growth strategies, and market positioning amid evolving consumer preferences and macroeconomic headwinds. As both navigate a highly competitive landscape, EWCZ’s service-led franchise approach contrasts with SBH’s product-driven retail and digital initiatives, setting the stage for a compelling side-by-side analysis of performance, innovation and future potential.
The Case for European Wax Center
EWCZ is building a data-rich, digital-first marketing platform aimed at driving guest acquisition. The company introduced new tools in the first quarter of 2025 to better measure advertising effectiveness, enabling more efficient media spend and lowering the cost per acquisition. Management noted sequential improvement in new guest trends on a two-year basis, supported by refined marketing content.
The company is also focusing on franchisee profitability and operational support. EWCZ expanded the franchisee support team, introduced new tracking and accountability tools, and increased engagement with the learning management system by 50%. These efforts are designed to improve performance at underperforming centers and enhance network-wide execution.
European Wax Center is taking a more disciplined approach to expansion, focusing on profitable growth and long-term network health. The company is working with franchisees to target underpenetrated trade areas with strong demand for out-of-home hair removal, setting the stage for new center openings in 2026. To support this, EWCZ has enhanced the market planning tools and implemented a rigorous site approval process, aiming to improve new center performance and return to net unit growth by the end of 2026.
Despite strategic progress, the company is contending with rising SG&A costs and elevated interest expenses. The projected net reduction in center count for 2025 reflects the need to rationalize its footprint, even as it invests in tools and strategies to drive long-term expansion.
The Case of Sally Beauty
Sally Beauty remains focused on executing its core strategic initiatives, which include enhancing customer centricity, accelerating high-margin owned brand growth, driving innovation, and improving operational efficiency. The company continues to advance its digital and marketplace strategy, resulting in global ecommerce sales of $94 million at constant currency in the second-quarter fiscal 2025, an increase of 6% and representing 11% of total net sales. Notably, ecommerce sales in the Sally segment rose 21%, driven by the strength of the digital marketplace strategy.
As part of the transformation, Sally Beauty is executing a comprehensive brand refresh to solidify its position as a destination for beauty discovery. Starting in May 2025, the company introduced a modernized brand expression across all digital and in-store touchpoints, centered on unified messaging around hair. Initial store refreshes in Orlando received positive customer feedback, with over 30 additional locations slated for updates by the year-end. These efforts are designed to enhance the in-store experience and broaden the brand’s appeal to a more loyal and diverse customer base.
Operational excellence remains a critical focus, with the Fuel for Growth program delivering $20 million in pre-tax savings during the first half of fiscal 2025. Year-over-year profitability improved as adjusted SG&A declined by $11 million in the fiscal second quarter, supported by the favorable impact from foreign currency exchange rates, savings from the Fuel for Growth program, lower advertising expense and depreciation expense. These reflect disciplined cost control and the successful execution of initiatives aimed at strengthening long-term financial performance.
Despite these advancements, Sally Beauty continues to navigate a dynamic macro environment marked by cautious consumer spending and category-specific softness, most notably in hair care.
How Does the Zacks Consensus Estimate Compare for EWCZ & SBH?
The Zacks Consensus Estimate for European Wax Center’s 2025 earnings per share (EPS) implies year-over-year growth of 35.6%. The EPS estimates remained unchanged at 61 cents in the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Sally Beauty’s fiscal 2025 EPS suggests year-over-year growth of 3.6%. EPS estimates remained unchanged at $1.75 in the past 30 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of EWCZ & SBH
European Wax Center has emerged as a strong performer amid the beauty market’s recent rebound, with its stock surging 54.8% over the past three months, significantly outperforming Sally Beauty’s 27.2% gain over the same period.
Image Source: Zacks Investment Research
When it comes to valuation, European Wax Center trades at a forward P/E of 7.51X, modestly higher than Sally Beauty’s 5.52X, reflecting a market premium for its growth potential.
Image Source: Zacks Investment Research
Bottom Line
While both European Wax Center and Sally Beauty present unique investment cases within the beauty sector, European Wax Center appears better positioned for long-term growth. Its franchise-based model, disciplined expansion strategy, and digital-first marketing execution offer scalable advantages as consumer demand rebounds. EWCZ’s strong projected EPS growth, superior stock performance, and focus on profitable unit growth reflect a business gaining momentum. Meanwhile, Sally Beauty’s strength in owned brands and cost control supports stability, but softer category trends and macro pressures may limit upside. For investors seeking growth in the beauty space, European Wax Center currently offers a more attractive risk-reward profile than Sally Beauty.
Image: Bigstock
EWCZ vs. SBH: Which Beauty Retail Stock is a Better Buy Now?
Key Takeaways
European Wax Center (EWCZ - Free Report) and Sally Beauty Holdings (SBH - Free Report) cater to the evolving needs of the beauty and personal care industry, each targeting different yet complementary segments. While EWCZ emphasizes a service-driven model with its franchised waxing centers, offering specialized grooming experiences, SBH focuses on retail by supplying professional-grade beauty products to both consumers and salon professionals.
This article explores their business models, growth strategies, and market positioning amid evolving consumer preferences and macroeconomic headwinds. As both navigate a highly competitive landscape, EWCZ’s service-led franchise approach contrasts with SBH’s product-driven retail and digital initiatives, setting the stage for a compelling side-by-side analysis of performance, innovation and future potential.
The Case for European Wax Center
EWCZ is building a data-rich, digital-first marketing platform aimed at driving guest acquisition. The company introduced new tools in the first quarter of 2025 to better measure advertising effectiveness, enabling more efficient media spend and lowering the cost per acquisition. Management noted sequential improvement in new guest trends on a two-year basis, supported by refined marketing content.
The company is also focusing on franchisee profitability and operational support. EWCZ expanded the franchisee support team, introduced new tracking and accountability tools, and increased engagement with the learning management system by 50%. These efforts are designed to improve performance at underperforming centers and enhance network-wide execution.
European Wax Center is taking a more disciplined approach to expansion, focusing on profitable growth and long-term network health. The company is working with franchisees to target underpenetrated trade areas with strong demand for out-of-home hair removal, setting the stage for new center openings in 2026. To support this, EWCZ has enhanced the market planning tools and implemented a rigorous site approval process, aiming to improve new center performance and return to net unit growth by the end of 2026.
Despite strategic progress, the company is contending with rising SG&A costs and elevated interest expenses. The projected net reduction in center count for 2025 reflects the need to rationalize its footprint, even as it invests in tools and strategies to drive long-term expansion.
The Case of Sally Beauty
Sally Beauty remains focused on executing its core strategic initiatives, which include enhancing customer centricity, accelerating high-margin owned brand growth, driving innovation, and improving operational efficiency. The company continues to advance its digital and marketplace strategy, resulting in global ecommerce sales of $94 million at constant currency in the second-quarter fiscal 2025, an increase of 6% and representing 11% of total net sales. Notably, ecommerce sales in the Sally segment rose 21%, driven by the strength of the digital marketplace strategy.
As part of the transformation, Sally Beauty is executing a comprehensive brand refresh to solidify its position as a destination for beauty discovery. Starting in May 2025, the company introduced a modernized brand expression across all digital and in-store touchpoints, centered on unified messaging around hair. Initial store refreshes in Orlando received positive customer feedback, with over 30 additional locations slated for updates by the year-end. These efforts are designed to enhance the in-store experience and broaden the brand’s appeal to a more loyal and diverse customer base.
Operational excellence remains a critical focus, with the Fuel for Growth program delivering $20 million in pre-tax savings during the first half of fiscal 2025. Year-over-year profitability improved as adjusted SG&A declined by $11 million in the fiscal second quarter, supported by the favorable impact from foreign currency exchange rates, savings from the Fuel for Growth program, lower advertising expense and depreciation expense. These reflect disciplined cost control and the successful execution of initiatives aimed at strengthening long-term financial performance.
Despite these advancements, Sally Beauty continues to navigate a dynamic macro environment marked by cautious consumer spending and category-specific softness, most notably in hair care.
How Does the Zacks Consensus Estimate Compare for EWCZ & SBH?
The Zacks Consensus Estimate for European Wax Center’s 2025 earnings per share (EPS) implies year-over-year growth of 35.6%. The EPS estimates remained unchanged at 61 cents in the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Sally Beauty’s fiscal 2025 EPS suggests year-over-year growth of 3.6%. EPS estimates remained unchanged at $1.75 in the past 30 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of EWCZ & SBH
European Wax Center has emerged as a strong performer amid the beauty market’s recent rebound, with its stock surging 54.8% over the past three months, significantly outperforming Sally Beauty’s 27.2% gain over the same period.
Image Source: Zacks Investment Research
When it comes to valuation, European Wax Center trades at a forward P/E of 7.51X, modestly higher than Sally Beauty’s 5.52X, reflecting a market premium for its growth potential.
Image Source: Zacks Investment Research
Bottom Line
While both European Wax Center and Sally Beauty present unique investment cases within the beauty sector, European Wax Center appears better positioned for long-term growth. Its franchise-based model, disciplined expansion strategy, and digital-first marketing execution offer scalable advantages as consumer demand rebounds. EWCZ’s strong projected EPS growth, superior stock performance, and focus on profitable unit growth reflect a business gaining momentum. Meanwhile, Sally Beauty’s strength in owned brands and cost control supports stability, but softer category trends and macro pressures may limit upside. For investors seeking growth in the beauty space, European Wax Center currently offers a more attractive risk-reward profile than Sally Beauty.
At present, EWCZ carries a Zacks Rank #3 (Hold), while SBH has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.