Good day, and thank you for standing by. Welcome to the European Wax Center's second quarter earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during this session, you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amir Yeganehjoo, Senior Vice President of Finance and Investor Relations. Please go ahead. Thank you, and welcome to European Wax Center's second quarter fiscal 2022 earnings call. With me today are David Berg, Chief Executive Officer, and David Willis, Chief Financial and Chief Operating Officer. For today's call, David Berg will begin with a brief review of our second quarter performance and discuss the progress against our fiscal 2022 priorities. Then David Willis will provide additional details regarding our financial performance and our guidance. Following our prepared remarks, David Berg, David Willis, and I will be available to take questions. Before we start, I would like to remind you of our legal disclaimer. We will make certain statements today which are forward-looking within the meaning of the Federal Securities Laws, including statements about the outlook of our business and other matters referenced in our earnings release today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings as well as our earnings release issued today for a more detailed description of the risk factors that may affect our results. Please also note that these forward-looking statements reflect our opinions only as of the date of this call, and we take no obligation to revise or publicly release the results of any revision to our forward-looking statements in light of new information or future events. Also, during this call, we will discuss non-GAAP financial measures, which adjust our GAAP results to eliminate the impact of certain items. You will find additional information regarding those non-GAAP financial measures and a reconciliation of those non-GAAP to GAAP measures in our earnings release. A live broadcast of this call is also available on the investor relations section of our website at investors.waxcenter.com. I will now turn the call over to David Berg. Thanks, Amir, and good afternoon, everyone. Thank you for joining us today. You heard me say many times that I firmly believe our says and does must match. When we commit to something as an organization, we follow through and deliver. That is why I'm so pleased with our solid performance in the first half of this year, including a second quarter that once again met our strategic and financial expectations. Based on our strategy, our performance to date, and our current visibility into the back half of the year, we are reiterating our full-year financial outlook while increasing expectations for new center openings. I'm incredibly proud of both our team and our franchisee partners, who remain relentlessly committed to delighting our guests and executing our initiatives. Even in the most uncertain macroeconomic environment, the EWC model continues to perform. There's a lot of discussion right now about the state of the consumer, particularly within the context of rapid inflation. While we are clearly paying close attention to the macro environment, we are confident we have a resilient business model, and we are taking decisive actions to successfully manage through this period. A few important points to highlight. First, European Wax Center has a high-earning customer demographic. The average household income is over $100,000 and significantly higher for our most engaged guests. For context, our services start at just $12, and our average service is about $34. Our value proposition that provides quick, hygienic, and effective hair removal continues to generate repeat visits from the significant number of guests we acquired in 2021. Second, our most valuable guests consider waxing to be a non-discretionary part of their routines. We drove strong Wax Pass sales above our expectations during Q2, and the number of guests on Wax Pass continues to grow. We also continue to see high engagement from our most loyal guests. Lastly, our marketing capabilities give us the levers that we can pull to drive guest acquisition, retention, and frequency in the back half of the year and beyond. As a reminder, these data-driven levers are a significant competitive advantage for us as the dominant player in a highly fragmented market, one that smaller-scale regional competitors and independent salons cannot replicate. Our guests continue to demonstrate enthusiasm for the brand, and we are excited to lead the category from a position of strength. While we are mindful of the inflationary environment and its near-term impact on the consumer, we believe that the recurring nature of our services, as well as the unparalleled EWC experience, will remain an integral part of our guests' personal and beauty care routines. We view the current operating environment as an opportunity to continue to grow our market share. Turning to our Q2 results, we once again delivered on our primary growth drivers of, one, opening new centers and, two, driving positive same-store sales. We opened 19 new centers, ending the quarter with 893 centers. Our expansion strategy focuses on first densifying the top 20 DMAs, and we have opportunities in all of them. In 2022, we are growing primarily in existing markets such as Philadelphia, New York, and Chicago, and more than 10% of this year's new locations will be in California. We are also adding a handful of new markets. In fact, we added our 45th state this quarter with our first center in Sioux Falls, South Dakota. Our development pipeline continues to expand through robust franchisee demand. From a same-store sales perspective, we delivered a 6.7% increase. As a reminder, we generated an outsized 29% same-store sales increase in Q1 as our centers lapped COVID-related constraints in early 2021. The first quarter of fiscal 2022 also reflected very strong Wax Pass sales and redemptions, some of which were pulled forward from our Q2, as we communicated on our last earnings call. Despite that pull forward, our twice annual buy 9, get 3 free wax promotion in May and June generated stronger sales year-over-year. As a reminder, Wax Passes drive higher spend and retention through recurring visits and are a leading indicator of the health of our business. Given all of the focus on near-term trends, I want to take a moment to dissect our same-store sales performance. We are very pleased that our 6.7% increase was driven by both ramping and mature centers. Our top quintile guests, who generate over half of our sales dollars, are coming more often and spending more than they have in the past. However, during the quarter, we did observe a slight increase in the average guest time between visits, which impacted transactions. Network performance improved later in Q2, and that improved performance has sustained into the third quarter thus far. To support transactions in the back half of the year, we are deploying additional marketing levers, which I'll discuss shortly. These levers give us confidence in reiterating our guidance for the full year. In addition to our two growth drivers, system-wide sales of $231 million increased 6%. Total revenue of $53.4 million grew 11%, and we delivered Adjusted EBITDA of $18.6 million. While our second quarter results demonstrate that we are on track to deliver a solid fiscal year, we remain focused on our long-term objectives. We are well-positioned to continue making progress on the following fiscal 2022 growth priorities. One, capitalizing on our enhanced marketing and loyalty programs to drive deeper customer engagement. Two, expanding our national footprint through new centers. Three, increasing the pipeline of wax specialists to support our long-term growth. Four, leveraging our scale to benefit our supply chain and franchisees. Finally, five, optimizing our capital structure to lower our cost of capital and increase flexibility. Starting with our marketing and loyalty programs. As we shared last quarter, our marketing team is focused on three objectives, attract more, buy more, and visit more to drive our second growth vector, same-store sales. As always, we continuously refine our analytics to efficiently target existing and potential guests. To support customer acquisition, we are leaning into the attract more guests by highlighting our unique Comfort Wax and our position as the leader in out-of-home waxing. Additionally, we are working with franchisees to optimize their media spend and expand local programming because local marketing efforts are correlated to new guest acquisition. From a customer retention standpoint, rates remain strong. We are leveraging our CRM initiatives and loyalty program, both of which are key competitive advantages for European Wax Center versus independent providers to drive brand affinity and repeat visits. We are focused on supporting transactions and frequency in Q3 and Q4. Specifically, we have rolled out new efforts to drive our buy more and visit more objectives, such as our services retargeting campaign and our rebooking and referral incentives. We believe these initiatives will drive traffic and services per ticket from existing guests, giving us confidence in reiterating our full-year expectations. Wax Pass adoption also remains a key priority for us this year and over the longer term. Since our IPO last year, we have shared that Wax Pass holders tend to buy more, visit more, and stay active longer. In fact, they drive nearly 60% of our transactions. We are converting new guests into Wax Pass holders at a healthy rate, and our Wax Pass sales for May and June were better than expectations. With less than half of our total guests on a Wax Pass, we have a significant opportunity to convert episodic guests into Wax Pass holders. To that end, we are launching a limited time Wax Pass offer in August and September that enables guests to buy three visits and get one free. Because this offer is at a lower price point than our semiannual buy 9, get 3 promotion, we believe that it will attract guests that want a great value but may be feeling the effects of higher inflation. By driving additional Wax Pass adoption, we can encourage episodic guests to visit European Wax Center on a more regular cadence, thereby increasing visit frequency. Overall, we believe we are taking the right steps to engage our guests and continue to take market share. Turning to our second priority, new center development. We are targeting a high single-digit annual growth rate on our path to 3,000+ centers nationwide, and we are very confident in our growth trajectory. Compared to a relatively modest upfront investment of approximately $350,000, Average Unit Volume of over $1 million that are higher than they were pre-pandemic. Despite inflationary pressures, four-wall margins remain strong. These unit economics are allowing our franchisees to continue to realize great returns. As a result, existing franchisees comprise over 90% of our development pipeline, and the vast majority are multi-unit agreements where they have commitments to open multiple units in the coming years. We have nearly a dozen growth partners in our pipeline as well. These are private equity-backed operators, family offices, and self-funded growth partners who have contractually committed to develop more than 2/3 of our growth over the next few years. With a well-capitalized franchisee base, we do not expect rising interest rates to materially impact their profile or appetite for committed growth as we expand across the country. We also continue to have strong demand from our smaller franchisees, owners with less than five centers who operate about half of our existing network. They have been instrumental in helping us to grow to this point and will continue to be a critical part of our long-term growth story. In summary, franchisee demand is a key reason we have confidence in achieving our unit growth objectives. As a result of our momentum this year, we are raising our outlook for fiscal 2022 net new centers to 83-85 units, up from 70-72 that we had previously announced. This represents 10% annual growth. We opened 40 net new centers in the first half of the year, and all remaining centers to be opened in 2022 are either currently in permitting or under construction. By partnering with our franchisee group and brand partners, we continue to see opportunities to expand and take share in our growing, highly fragmented category. With that, I'd like to turn the call over to David Willis to review our remaining strategic priorities, our second quarter performance, and our guidance for the balance of the year. David? Thanks, David, and good afternoon, everyone. Our third priority, increasing the pipeline of wax specialists, will help ensure that we deliver on our long-term growth commitments. To be clear, regardless of labor market conditions, we will always have a focus on recruiting and retaining wax specialists. We continue to work diligently to increase awareness with potential candidates and refer them to franchisees. Consequently, our franchisees are successfully hiring the licensed aestheticians and cosmetologists they need to deliver unmatched expertise with every service. Given our leadership position in out-of-home waxing, European Wax Center is uniquely positioned to retain top talent, which is a benefit to both recruitment and four-wall profitability. With solid progress achieved on the hiring front, we are focused on optimizing retention of wax specialists and efficiency within the centers. We are rolling out resources in the third quarter to help franchisees better calculate and understand their turnover to bolster their retention strategies. We are also implementing more tools like labor utilization reporting to help them enhance staffing levels. Through an operational focus on system improvements and scheduling efficiency, we have effectively freed up more booking availability in 2022 versus last year. From a longer-term perspective, we made a commitment to support our franchisees in 2019 through the creation of our internal industry relations team. Our team continues to launch partnerships and produce educational content to further our beauty school outreach programs. All of these efforts strengthen our confidence in delivering our unit growth targets for years to come. Our fourth priority is to continue leveraging our scale to enhance our supply chain and in turn, share these benefits with our franchisees. Being the category leader enables us to use our scale to support the European Wax Center network and build a more efficient organization. For instance, compared to the independent salons comprising the majority of our industry, we are the largest buyer of depilatory wax in the United States. Our buying power is a competitive advantage that has allowed us to mitigate cost increases as our volume grows. Additionally, we have the flexibility to pass on cost increases to our franchisees and in turn, increase service pricing to protect four-wall profitability. As we shared last quarter, four-wall margins in 2021 were actually higher than in 2019, despite pandemic-constrained volumes early in the year. However, we want to be prudent in how we respond to cost increases. Costs have recently increased on our proprietary retail product line, which represents approximately 6% of system-wide sales. We proactively tested an end consumer price increase and expanded this to the network a few days ago after seeing only marginal transaction impact during the test. From a financial perspective, we expect this retail price increase to be small and net neutral, both to European Wax Center and our franchisees. It's an example of how thoughtfully we evaluate our response to a dynamic supply chain environment. In May, we shared that the international freight rates to import our wax from Europe had significantly increased. At the time, we decided to absorb approximately $500,000 of additional freight on behalf of our franchisees while we monitored the situation. We are pleased to report that rates have stabilized since Q2. Therefore, our expectations for freight expense in the back half of this year remain unchanged, and we do not expect incremental headwinds to impact fiscal 2022. Finally, from a supply standpoint, we are in a good inventory position. As a reminder, relative to traditional retailers, we have a limited number of products and minimal inventory obsolescence risk. We have sufficient retail product and safety stock of wax, and our vendors can produce everything we need to operate and grow. Ultimately, we believe we are well-positioned to navigate the current macro dynamics. Finally, I'd like to briefly touch on our fifth priority, continuing to optimize our capital structure. Q2 was the first quarter with our new financing structure in place. We are pleased to have secured a 5.5% fixed rate facility early in this rising interest rate environment. With our asset-light model and ability to generate strong and recurring cash flows, we are comfortable with maintaining longer-term leverage targets that are in line with best-in-class franchise models. However, we also recognize the value of delevering over time and expect to do so by approximately one turn every 18 months through continued EBITDA growth. We expect net leverage at the end of fiscal 2022 to be approximately 4.8 x. Turning to our Q2 financial performance. As David mentioned, we delivered solid results in line with our expectations. Q2 system-wide sales increased 5.7% to $231.1 million, and total revenue of $53.4 million rose 11.4% from Q2 last year. Total revenue growth outpaced system-wide sales growth due to the introduction of our new medical supply arrangement with franchisees in late Q1. As a reminder, we expect that agreement will generate an incremental $8 million-$10 million in total revenue for European Wax Center this year. We delivered $18.6 million in Adjusted EBITDA, down from $19.8 million in Q2 last year, primarily due to expenses required to operate our first year as a public company. We have also shifted more of our annual marketing spend into the second quarter compared to 2021, which drove nearly 200 basis points of Adjusted EBITDA margin decline year over year. While the cadence of our spend has changed within the year, we expect marketing as a percent of sales to be consistent with fiscal 2021 on a full year basis. Interest expense was $8.1 million, which included approximately $2 million in debt extinguishment costs related to the refinancing we executed in April. Income tax expense was negligible as expected, and Adjusted net income was $7.4 million compared to $9.9 million in Q2 last year. In terms of the balance sheet, we ended the quarter with $42.1 million in cash. This included $10.9 million classified as restricted cash related to upcoming principal and interest payments on long-term debt. We had $400 million outstanding under our senior secured notes and no amounts outstanding on our $40 million revolver. Finally, I'd like to turn to our outlook for the balance of fiscal 2022. With our expanding pipeline and all of our fiscal 2022 new center openings already in permitting or under construction, we are confident in raising our outlook for net new center openings to 83-85 this year. Considering our typical maturity ramp and the fact that the incremental centers are opening later in the year, we expect their impact to fiscal 2022 sales and profitability will be immaterial. However, we look forward to the productivity ramp of these additional centers in fiscal 2023. Considering macroeconomic headlines, we are pleased to reiterate the rest of our fiscal year outlook, which we raised in May. Our outlook incorporates our third quarter to date run rate, which has improved from the transaction trends we observed in May and June. We expect full year system-wide sales between $875 million and $915 million, total revenue between $199 million and $209 million, and same-store sales between 9.5% and 10.5%. From a cadence standpoint, we expect Q3 and Q4 to each generate approximately 50% of our remaining top line. Typically, Q3 generates slightly higher volume than Q4, but we expect that some of our new marketing initiatives, which are meant to address near-term transaction trends, will drive visits into the fourth quarter. It's important to note that we do not expect these initiatives to have a gross margin impact, and we are reiterating our annual gross margin guidance of 71%-71.5%. To support the rollout of these initiatives, we are pulling some of our back half advertising spend into the third quarter. As a result, we expect Adjusted EBITDA between $17 million and $18.5 million in Q3. For the full year, we still expect Adjusted EBITDA between $69.5 million a nd $72.5 million and Adjusted net income between $24 million and $28.5 million. Our outlook for fiscal 2022 interest expense remains approximately $23.5 million. Again, this includes $2 million of debt extinguishment costs in Q2. Given our ownership structure and current valuation allowance, our outlook still assumes negligible corporate income tax expense this year. From a long-term standpoint, our previously communicated growth targets remain intact. These are compounding annual growth of high single digits for new centers, high single digits for same-store sales, low double digits for total revenue, and low to mid-teens for Adjusted EBITDA. Under these growth assumptions, we expect to drive long-term Adjusted EBITDA margin expansion to the mid to high 30s%. Before we take questions, I'd like to turn the call back to David for final remarks. David? Thanks, David. In summary, while no company is immune to inflation, we believe European Wax Center is better positioned than most to navigate this challenging macroeconomic environment. Because hair growth is recurring, we believe there will always be a need for our services. We have a highly engaged and loyal consumer who views hair removal as nondiscretionary. We are the category leader in a highly fragmented space and can leverage our scale to attract top talent, deploy targeted customer acquisition and retention strategies, mitigate cost increases, and unlock value for both our franchisees and guests. Finally, our strong unit economics and significant white space continue to create demand among our franchisees for new centers. Ultimately, we have a very strong asset-light business model that is generating cash flow and driving value for our guests, franchise partners, and shareholders. We are the category creator and believe our business model will continue to strengthen over time. I will now turn the call back over to the operator for questions. Operator? Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Jonathan Komp with Baird. Your line is open. Yeah. Hi. Thank you. Hello, everyone. Jonathan. David, I wanted to first ask maybe to get your broader assessment of some of the consumer trends you're seeing. I know you highlighted some minor volatility in the transaction patterns that has since improved. Just what's your assessment of the behavior you're seeing? Then as you think forward to some of the referral initiatives or, you know, the August and September planned Wax Pass initiative, do you have any historical frame of reference to have a sense how the consumer might react to those? Yeah. Jonathan, thanks for the question. I think, you know, we saw as we mentioned in our opening remarks a little bit of time gap on average starting really kind of the back half of May and into June. What we've seen since that time is an improvement in terms of the frequency that our guests are coming into our system. What's really important to remember is that those folks that are on a Wax Pass, and particularly our top quintile guests, were actually coming more often and spending more money in the quarter. We feel great about that. We took a look at a couple of, you know, items that we thought might be impacting our guests. We certainly have talked to our guests about the impact of inflation, what's going on with gasoline prices and grocery. Is that impacting your willingness to come into European Wax Center? That led us to the couple things that you mentioned. I'll double-click on them, Jonathan, just for a minute. One of the things that I would start with that's critically important in any franchise system is that anything we are gonna roll out, we wanted to make sure that the system and our franchisees understood how to perform that. Everything that we've talked about, we've done before. Let me start with kind of as we break out the attract more, buy more, visit more. From an attract more standpoint, as we mentioned, continue to really emphasize our leadership position, the differentiator in Comfort Wax that is unique to us, and working with our franchisees to drive more local marketing because we know that drives guests. One of the other critical things that drives guests, new guests into our system on top of our First Wax Free promise is the referral system. Historically, we have increased it. Normally, it's a $10 referral. You get an additional $10 of reward points. We're doubling that to drive new guests because we know that's a great driver. You trust the person that says, "Hey. Go into European Wax Center. I had an amazing experience. Go in there." We have had experience, Jonathan, with that, and we've seen a lift in terms of new guests coming into the system as a result of that. From a buy more standpoint, you know, we'll continue to have our regular promotions that we run, where if you buy more product, you save more, the kind of bundling packages that we have. We ran an offer this summer that gave 50% off if you tried a new service to continue to incent our guests to buy more services. One of the nice things we've seen is that our attachment rate from a retail product has not declined. Even in what might be tougher economic times, the attachment rate to retail product is still there. We're gonna continue to focus again on those things that we know how to do. From a visits-more standpoint, two things. The rebooking focus, this is really a bonus program for our centers. We know how to rebook. We know how important that is, and we certainly have had great results when we put some compensation out for our franchisees, to incent them to drive behavior that we want, and rebooking is one of those things to get the guests coming back in on a more regular basis. Tried and true on that one. The 3+1, we've offered a 3+1 program before where you buy 3 and get 4 Wax Passes, but it's been limited to college students. We just thought, given the economic environment and some of the inflationary woes that folks were feeling, that this is a great opportunity for somebody who can't maybe afford, you know, $400 or $500 for a 9+3 Wax Pass to buy the 3+1. The average price on that, think about that sort of about $120-$125. We think it's a great opportunity for them to get onto a Wax Pass, and gives us the opportunity to then convert them into the 9+3 when we run into those promotional periods later this year or early next. That's kind of the thinking behind all those, but it is premised on things that we've done before, have proven track records, and that our network is very familiar with and executing. Yeah, great. Sounds like you have a lot of tools at your disposal. Maybe one separate question just on the unit development. Should we be viewing the raise to the new center opening target this year as sort of a one-time bump or any implications to think through for next year? And maybe related to that, could you just comment on the level of interest you're seeing from the larger institutional potential franchisees, either currently in the system or not in the system, and whether or not the interest there could have any impact on your future growth rate? Hey, Jonathan, this is David Willis. Happy to take that. I would not view this as a one-time bump. We simply have better visibility now that we're 90 days past Q1 into what balance of the year looks like. We're pleased that in a handful of markets, not across the board, but a handful of markets, permitting delays are easing up a bit. I think we remain committed to our high single-digit long-term growth algorithm in terms of new units. The commitments that David had mentioned from the franchisees just give us this confidence that we can deliver this increased guidance for this year. This is not pulled forward from 2023. I think we still feel very confident in high single digits in terms of the long-term algorithm. Great. That's encouraging. Thank you. You bet. Thanks, Jonathan. Thank you. One moment. Our next question comes from John Heinbockel with Guggenheim Securities. Your line is open. Hey, guys. I wanna start with local marketing. What on average do the franchisees spend as a percent of sales, right, on their marketing and on what types of things? You know, what would you like to see them spend, you know, in terms of amount or sources, if it's different than they're spending today? Hey, John, it's David. The typical franchisee spends between $500 and $1,000 per month in local marketing. What we've seen is those franchisees that spend that amount or more have a better impact in terms of their results. We like to tell our franchisees that, but it's even more powerful when our local franchisees talk about the spend that they do in their local markets and the impact that it has. Kinda if we could get everybody north of $1,000 a month, John, I think that would be ideal. You know, maybe sort of tying in when you think about, we've talked about this before, right? The four-wall, well, not the four-wall, the unit revenue, right? I know you wanna get to $1 million faster, and Wax Pass is a big part of that. But where are we in moving up the curve faster? And I guess, would that allow them to then spend, you know, a good amount more than $1,000 a month on spend, right, if that maturation is occurring? Yeah, John, I would say we talked, I think, the last few quarters that the cohorts that have opened over the last couple years have demonstrated their ability to ramp faster to $1 million than I would say cohorts 5, 6, 7 years ago. What we're not ready to say is that the ramp forever has changed. We continue to assess that to make sure that that's sustainable. There's a couple things driving that that I think we talked about. One is just commitment to pre-opening marketing spend to build guest file, guest awareness prior to opening. But then also upfront, staff it with more waxers out of the gate. Historically, folks would open with five or six waxers on the payroll. They would ramp at our historical maturation curve. We've seen those that will kind of invest more working capital to get 8, 9, maybe 10 waxers on the payroll out of the gate, have an ability to take more walk-ins, and can ramp a bit faster. We think it's an and. We think it's both the marketing initiatives as well as the staffing. Okay, thank you. Sure. Thanks, John. We have a question from Scot Ciccarelli with Truist. Your line is open. Hi, guys. Scot Ciccarelli. When you talked about or experienced somewhat slower transaction growth at different points in the second quarter, obviously you guys already talked about that. Were there any other kind of notable patterns around it, i.e., was there a shift in maybe Wax Pass sign-up activity or trading across different activities or price points? Scott, we really didn't see a shift in mix, or trade down in service. If you think about our guests that are used to getting a bikini service, they don't really trade down and get an eyebrow service. We really didn't see a pattern of folks trading down. I think as David touched on for the non-WaxPass guests, we just saw them coming in a little less frequent, a little less frequently. Now, David also mentioned we put in place a promo late May, early June, that we saw have, we think, a corollary effect on some of the rebound that we saw back half of June, and we continue to see in the first weeks of July. That combined with very strong Wax Pass sales in the second quarter is what's really giving us confidence that we can deliver our second half performance per our guidance. Got it. Thank you. Just a follow-up. With some of the promotions that you guys were talking about, is there any financial impact on the franchisees when you guys offer those kinds of incremental promotions? It's a mix, Scott. Some of these, if we offer a discount in-center, obviously the franchisees are subsidizing those discounts, but we also run contests that we fund on behalf of the network. It's really who funds the discount varies based on the promotion. Understood. Okay, thanks guys. You bet. We have a question from Kelly Crago with Citigroup. Your line is open. Hi, guys. Thanks for taking my question. I was hoping you could give us an update on some of your talent attraction initiatives. I think you were mentioned earlier this year you're partnering with some school clubs to maybe strengthen that pipeline. Just curious if you've seen any improvements there, if you could just talk about what you've learned and, you know, where you've gained some traction, if at all. Yeah, Kelly. I would say overall, we feel really good about the progress our franchisees have been able to to staff their centers. A couple of just metrics here. This year we've done partnering with our franchisees, seven industry events attended by 5,000 prospective waxers for our network. We continue to elevate EWC as a brand of choice, and I think we talked a bit on our last call, but we're really taking CRM approach in doing proactive campaigns to prospective waxers. Our Indeed and Glassdoor reputations are increasing. There's just overall higher brand sentiment. We've probably reached that point, Kelly, where this is now just part of our normal playbook. We're evolving where we wanna focus not just on recruitment, but also retention of the waxers that our franchisees hire and driving scheduling efficiency. The last few quarters, it's been recruitment, and we're now evolving to where that's just part of the normal playbook, and we also wanna focus on retention and utilization. Just a separate question here, back to some of the transaction changes you saw in the customer behavior. Are you saying sort of as you layered in some of these promotions, you know, that's what sort of got the customer coming back to their prior, you know, patterns of coming in for services, or like in which case you're having to rely more on those going forward, or was it just in your view, just sort of a blip on the radar, you know, based on what was happening in the macro? Just curious if you could clarify. Thank you. Yeah, Kelly, we started to see sort of the transactions rebound in late June and July, where we did not run those specific promotions that we talked about today. The buy three, get one free started in August, as well as the referral enhancement. We think that's just prudent actions for us to take to make sure that we're gonna drive the back half of the year as we've talked about. We've been pleased, as we said, with what we've seen over the first five weeks of Q3 in terms of consumer engagement and transactions. All right. Thank you. Thanks, Kelly. Thank you. As a reminder, if you would like to ask a question, press star one one. We have a question from Simeon Gutman with Morgan Stanley. Your line is open. Hi, guys. Thanks for the time, and this is actually Hannah Pittock on for Simeon Gutman. First question, again on the transactions. You mentioned that you've seen some mild degradation in kind of your top quintile Wax Pass holders. Are you seeing that same level of degradation across customer quintiles? You know, is your middle quintile changing much, or is the degradation really concentrated in the Wax Pass holder? And then maybe a quick follow-up on the attach rates that you haven't seen much shift in. Generally speaking, is the attach rate and overall product sales as distributed as transaction frequency across your kind of top quintile versus middle and bottom quintile customers? And do you see that shifting over time? Yeah, Hannah, let me. Thanks for the question. Let me make sure that I maybe wasn't as clear as I should have been. The top quintile, which makes up over 50% of our sales, actually is coming more often and is spending more in the quarter. It was not our top quintile, our most loyal guests at all. It was really on average that we saw that slight decline in terms of frequency. I just wanna make sure that's really clear. Typically, our Wax Pass holder buys more retail product, and we have a higher attachment rate there, but the overall attachment rate, kinda that mid-teens, has stayed fairly consistent throughout the quarter. Got it. Maybe one quick follow-up. How is California trending, and is the kinda consumer stress slowing that, or is the labor issue kinda worked through at this point? Hannah, I'd say we feel good about California overall. They, as you may recall, over-delivered kind of in the first quarter of this year, and so they reached what we had forecasted to be the recovery rate just early in the year than we had anticipated. Now, their transactions remain below pre-pandemic levels, but we are pleased with where they're trending and pleased overall with where their staffing levels are. Probably the biggest vote of confidence we have in California is, as you know, it represents 15% of our existing network today. David mentioned this in his prepared remarks that California's gonna represent 10%+ of 2022 new center openings, and that state represents 13% of our total licensed pipeline. I think we feel good about where they continue to trend, and we also feel good about expanding our footprint in that state and our franchisees' commitment to do so. Makes sense. Thanks much. Thanks, Hannah. Thank you. I'm showing no other questions in the queue. I'd like to turn the call back to management for closing remarks. Thank you all, very much for joining us, and we'll look forward to speaking with you, when we announce Q3 in early November. Thank you very much. This Q3 in early November. Thanks for the call. Thank you for participating. You may now disconnect.