Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the European Wax Center's Fourth Quarter Fiscal 2022 Earnings Call. At this time, all participants are listed on mute mode. After the speaker's presentation, there'll be a question-and-answer session. In order to facilitate as many participants as possible, we ask that you please limit yourself to one question and one follow-up during the Q&A session. If you have additional questions, you may rejoin the queue. At this time, I'd like to turn the conference over to Bethany Johns, Director of Investor Relations. Ma'am, you may begin. Thank you, and welcome to European Wax Center's Fourth 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 fourth quarter and full year performance and discuss our priorities for fiscal 2023. David Willis will provide additional details regarding our fiscal 2022 financial performance and our fiscal 2023 outlook. Following the prepared remarks, David Berg and David Willis 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 call and earnings release issued 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. 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 these non-GAAP financial measures and a reconciliation of these 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. Thank you, Bethany. Good morning, everyone. Thank you for joining the call today. We are incredibly pleased to deliver a strong Q4 performance and equally strong fiscal year. We continue to believe it's important that our says and dos match. We delivered record top and bottom-line results in line with the annual guidance we gave at the beginning of last year, despite a significant change in the consumer landscape during 2022, generating $899 million in system-wide sales and $71.6 million in Adjusted EBITDA representing 13% and 12% growth, respectively. The European Wax Center business model remains consistent. Our performance is anchored by the recurring nature of hair growth and our strong relationships with guests who continue to prioritize their personal care routines in our clean, hygienic centers with a predictable, efficient, and professional service that only our highly trained wax specialists can provide. I would like to thank our associates and our franchisee partners for driving our continued success in 2022 and for their steadfast commitment to living our values each and every day. We were recently certified by Great Place To Work, a recognition we share proudly with our team members. Thanks to their efforts, we have extended our leadership position in this highly fragmented out-of-home waxing category that European Wax Center created nearly 20 years ago. Let me give a quick recap on 2022. Throughout last year, I updated you on the progress we made against some of our 2022 priorities. First, we grew our pipeline of current and future wax specialists, planting the seeds that will support both existing centers and new center openings in the future. Second, we leveraged our scale to support our network by mitigating or offsetting much of their supply chain cost headwinds. Third, we optimized our capital structure through a whole business securitization and returned approximately $220 million to shareholders through dividends and buybacks. Fourth, we implemented an enterprise data warehouse that will serve as the backbone for enhanced marketing outreach to drive incremental engagement from our guests. Finally, and most importantly, we delivered on both of our key growth vectors, unit growth and in-center sales growth. We generated over 10% new center growth and ended the year with our deepest pipeline ever. We also grew system-wide sales by 13% and same-store sales by 10.4%. Let me spend a minute and talk about the health of our guests. In 2022, our guests demonstrated their commitment to their waxing routines despite a difficult year for the consumer at large. Our highly trained wax specialists performed over 22 million services last year for more than 3.5 million people. We continue to attract new guests to the brand, converting them into repeat guests and ultimately into Wax Pass guests. Our Wax Pass program engenders brand loyalty, with Wax Pass sales representing commitments to the brand that generate predictable visit frequency. Wax Pass holders represent nearly 40% of total guests and generate 2/3 of our annual visits and system-wide sales dollars. Compared to 2021, these guests have increased their frequency to nearly 7.5 visits per year. More than double the frequency and annual spend of our episodic non-Wax Pass holders. Wax Pass adoption remained robust in 2022, with 16% growth in Wax Pass sales during our customary Q4 promo period. The bottom line is that our most loyal guests are driving the majority of our network sales and have not changed their waxing routines, demonstrating that they continue to view our services as nondiscretionary, even in a highly inflationary environment. I'll touch on those strategies in a few minutes. Overall, we are pleased with how our core guest is engaging with the brand. As David Willis will cover shortly in our 2023 outlook, we expect mature center transaction trends to remain consistent with the second half of 2022. That stability and the loyalty of our Wax Pass guests have continued into 2023 and are key assumptions in our outlook for this year. Before I dive into our priorities for 2023, let me remind you where we fit into the highly fragmented hair removal landscape. European Wax Center created a category for professionalized out-of-home waxing. We are 6x larger than our closest branded competitor in unit count, and 11x larger by system-wide sales. Today, we remain the only nationwide brand in this space, and we will continue to leverage our scale to extend our leadership position. We deliver a trusted service to our guests by providing a consistent, elevated experience through our highly trained wax specialists, our unparalleled hygiene protocols, and our proprietary Comfort Wax. These differentiators in our operating model keep guests coming back to European Wax Center on a recurring basis. As we expand, we continue to penetrate a growing $18 billion addressable market and feel confident we are capturing our fair share of it. Despite our dominance, we have yet to reach 1/3 of our unit growth potential. We have significant white space for our continued expansion on our expected path to more than 3,000 locations in the U.S. Our franchisees are investing their own capital to develop this white space. In fact, 99% of our new centers in 2022 were opened by existing franchisees. Our significant market opportunity is the foundation for our two growth vectors. First, expanding our footprint through new center growth, and second, driving in-center sales, which benefits both system-wide and same-store sales growth. I'll start with our unit growth vector. At over 400 licenses, our new center pipeline is the deepest in our brand's history. We delivered more than 10% unit growth year-over-year in 2022. Expect to deliver another 10% growth rate in 2023. Nearly all of our 2023 openings will be located in existing markets, with a focus on California, Texas, Florida, Illinois, and Georgia. As of today's call, two-thirds of our targeted 95-100 new centers are already open or under construction. Our franchisees are well-capitalized. Coupled with the modest cost to build, elevated interest rates have not impacted their appetite for expansion. Franchisee demand, especially among growth partners and multi-unit developers, remains robust. To support new centers, we will build on the momentum generated in 2022 by continuing to refine tools to help our franchisees recruit and optimize their wax specialist pipeline and enhance our already best-in-class unit economics. Our average center generates nearly $500,000 in sales in its first year of operations and nearly $800,000 in year two. It breaks even in month 14 and reaches maturity in year five, generating $1.1 million in sales with over 60% cash-on-cash returns. Make no mistake, these returns are already phenomenal, but we plan to put even more rigor around the pre-opening playbook for new centers to drive faster break-even sales. Our most recent cohorts are opening at higher initial volumes than our historical average. We plan to leverage their best practices with the network to drive more momentum. We also recently launched enhanced reporting that enables better access to real-time performance analytics. Ultimately, strong unit economics translate to a growing license pipeline to support our long-term unit growth targets. Existing franchisees make up more than 90% of our pipeline. Our smaller operators, who opened almost half of our 2022 new centers, are the backbone of our brand and continue to be critical to our success. We continue to have growing interest from our institutional growth partners who represent 40% of existing centers, but 70% of our future pipeline. Both of these groups continue to demonstrate their steadfast commitment to our long-term growth. Turning to our second growth vector, driving in-center sales growth, which benefits both system-wide and same-store sales growth. We are excited to drive even deeper engagement with our guests this year through our three-pillared Attract More, Buy More, and Visit More strategy. The Attract More pillar is focused on attracting new guests to European Wax Center. First, we are helping our network optimize their local marketing spend by increasing the number of regions in key states. By working together in regions, centers reduce the cost of acquiring new guests by more than 20%. Second, we recently engaged a new creative agency, recognized in 2022 as the small ad agency of the year, to enhance our creative assets and campaigns that reinforce EWC as the category killer in the space. In Q2, we will launch a new campaign that celebrates inclusivity, reinforces our brand differentiators, and projects irresistible confidence for everyone. Lastly, because our retention rates remain strong, we will shift more of our digital media spend to early 2023 to attract new guests sooner and retain them all year long. We are pleased with the traction we've seen thus far from our first quarter spend. Our second pillar, Buy More, focuses on increasing the average ticket in centers. We will roll out strategic service recommendations in 2023 through both online booking and our app, suggesting incremental services for guests to seamlessly add to their reservations. We are also elevating our retail strategy for 2023. It's better informed by guest behavior and seasonal considerations with focused limited time offers that sell out and drive product attachment. As a reminder, sales of retail products are a small piece of system-wide sales but represent a larger portion of our product revenue as a franchisor. We believe both of these initiatives will work together to increase average dollars per ticket this year. Our third pillar, Visit More, is designed to increase frequency among our existing guests. Our network-facing contest in 2022 successfully generated higher rebooking rates in-center, which translates to more visits per guest per year, so we will carry on that initiative in 2023. We have also invested in resources to develop an integrated multi-channel customer journey later this year, enabled by our enterprise data warehouse that we established in 2022. Our data and technology enhancements will enable us to leverage our enhanced CRM capabilities to deliver the right message to the right guest at the right time via the right platform. We kicked off this effort by rolling out SMS messaging capabilities a few weeks ago. We believe our CRM efforts will be the most effective driver of incremental guest behavior, especially amongst more episodic guests that present the biggest opportunity. Our fragmented competitive set simply cannot make these types of investment, it gives us the opportunity to continue to take market share. Lastly, we have refined and optimized our loyalty program for 2023 to reward the desired behaviors we seek, specifically maximizing rebookings and referrals while minimizing the financial cost to the network. While EWC Rewards is a great tool, we recognize that our Wax Pass program is our most powerful loyalty driver and the leading indicator of future visits to our centers. As we execute on our Attract More, Buy More, and Visit More initiatives, we expect to attract new guests to the brand, convert them into repeat guests, and drive valuable Wax Pass adoption. We expect these efforts, coupled with our strong unit growth, to drive 7%-10% top-line growth in 2023. From a long-term standpoint, our expanding network footprint drives continued revenue growth for us as a franchisor and gives us the ability to leverage our fixed cost profile, delivering margin expansion and generating significant cash flow. Over time, this translates to significant value creation for European Wax Center's franchisees and our shareholders. Before I hand it over to David Willis, our CFO and COO, I want to highlight the executive eadership changes we announced earlier this morning, which reflects our commitment to building a strong bench of leaders that will continue to execute on our growth strategy and propel European Wax Center forward. We have appointed Stacie Shirley as our next Chief Financial Officer, and she will begin her role effective March 27th. Stacie will succeed David, who has been promoted to President of the company. David, Stacie, and I will work closely together over the next few months to ensure a seamless transition. We are thrilled to welcome Stacie as our next CFO. She is a proven leader with over 20 years of consumer industry and franchise expertise, and she brings a unique understanding of our business and the guests we serve. The board and I have complete confidence in her, and I look forward to introducing her to many of you soon. David, on behalf of the entire European Wax Center family, we thank you for your invaluable contributions to the success of our business and the execution of our financial objectives while wearing both CFO and COO hats. You stepped back into this role last year and have done a tremendous job steering us through our first full year as a public company. We have incredible confidence in you, as President, to execute on our growth strategy and further expand our footprint as a category leader in out-of-home waxing, and I look forward to our continued partnership. With that, I'd like to turn the call over to you, David, to review our financial performance and our guidance details for fiscal 2023. Thanks, David. Good morning, everyone. I'd also like to offer Stacie a warm welcome to the European Wax Center family. I look forward to working closely with her in the coming months, and am confident that her experience and leadership will deliver substantial value to all of our stakeholders. Before I begin my remarks, I'd like to remind everyone that in some instances, I will speak to adjusted metrics on this call. You can find reconciliation tables to the most comparable GAAP figures in our press release in 8-K filed with the SEC today. Turning to our financial performance, as David mentioned, we delivered solid results ahead of our expectations, thanks in part to strong Wax Pass sales in the quarter. Q4 system-wide sales increased 11.6% to $225.4 million, and total revenue increased 18.7% to $53.5 million. Top line growth was a result of unit expansion, including 33 net new centers during the quarter, coupled with a strong 6.3% same-store sales increase driven by all cohorts, including mature centers. Total revenue growth exceeded system-wide sales growth due to the medical supply arrangement with franchisees that began early in 2022, which generated approximately $12 million in total revenue for European Wax Center on an annualized basis. As we've shared before, this arrangement optimizes the procurement process for our network, and while it was approximately 220 basis points diluted to gross margin rates in 2022, it is accretive to gross margin dollars. From a profit standpoint, Q4 Adjusted EBITDA increased 25.9% to $19.2 million. Fourth quarter Adjusted EBITDA margins increased 210 basis points to 35.9%, primarily driven by SG&A leverage on top line growth and a favorable shift in the timing of advertising expense year-over-year. Adjusted net income grew from $8.5 million in Q4 of 2021 to $48.7 million in Q4 2022. Fourth quarter GAAP net income of $2.3 million includes a $55.9 million expense related to the remeasurement of our tax receivable agreement liability and a $53.3 million income tax benefit triggered from the release of a valuation allowance on our related deferred tax assets. For the full year, we opened 91 net new centers, representing 10.7% unit growth, once again exceeding our long-term high single-digit growth target. System-wide sales increased 12.8% to $898.6 million. Total revenue increased 16% to $207.4 million. Same-store sales increased 10.4%, driven by both the price increase our franchisees implemented in Q1 of 2022 and by transaction growth across all center cohorts. Adjusted EBITDA was $71.6 million, up 11.7% from $64.1 million in fiscal 2021. Adjusted EBITDA margins decreased 140 basis points year-over-year to 34.5%, primarily due to public company costs in the new medical supply arrangement, partially offset by operating expense leverage from top line growth. Full year interest expense increased to $23.6 million from $20.3 million in 2021 as a result of our whole business securitization that closed in April of last year, which locked in a fixed 5.5% rate on all of our long-term debt. Lastly, adjusted net income grew to $71.5 million in 2022 from $29.7 million in 2021, while GAAP net income increased to $13.6 million from $4 million the prior year. In terms of the balance sheet, we ended the quarter with $44.2 million in cash and $398 million outstanding under our senior secured notes. Our $40 million revolver remains fully undrawn. Net leverage at the end of fiscal 2022 was 4.9x Adjusted EBITDA. We expect to de-lever nearly an additional full term in 2023 to approximately 4x based on our fiscal guidance that I'll cover shortly. Net cash provided by operating activities was $44.4 million in fiscal 2022, compared to only a quarter million dollars in investing outflows, a signature of our asset-light, capital-light model. We repurchased approximately $10 million of our Class A common stock during the fourth quarter, with $30 million remaining under our current authorization. Our industry-leading free cash flow profile gives us continued optionality to deploy cash to the benefit of our model, our network, and our shareholders. Now turning to our outlook for fiscal 2023. As David mentioned earlier, we plan to deliver more than 10% unit growth once again based on 95-100 net new center openings this year, with 45-50 expected openings in each half of the year. Our license pipeline is the deepest it's ever been, with over 400 centers to be developed, representing unprecedented interest and firm commitments from existing franchisees and growth partners. We feel incredibly confident in our long-term goal of 3,000 European Wax Centers nationwide. From a top-line standpoint, we expect system-wide sales between $965 million and $990 million, and total revenue between $222 million and $229 million, which implies a 7%-10% growth for both metrics in 2023. We also expect mid-single-digit same-store sales growth. New centers continue to generate a strong maturity curve. Their sales ramp in years 2 through 5 will drive our overall comp performance in 2023. In fact, as David mentioned, our recent cohorts are opening at higher average unit volumes than our historical averages. As we shared with you on our last call, mature center transaction volumes have remained stable for the past 2 quarters and continue to remain stable through the first 2 months of 2023. While stable, these trends are slightly below our long-term growth algorithms. Our top-line outlook assumes continued transaction stability, supported by the unwavering loyalty of our recurring Wax Pass guests. It is important to note that our outlook does not assume any service price increases for 2023. We recommended modest price increases to our network in both 2021 and 2022. We'll continue to analyze and evaluate consumer trends and behavior as we move throughout the year. Our gross margin outlook is approximately 71%, which reflects the wraparound impact of our medical supply arrangement that was implemented in late Q1 of last year. Underlying gross margins are largely stable from 2022. As a reminder, while outbound freight rates continue to remain elevated from historical levels, as a franchisor with scale, we have leverage with both our suppliers and franchisees to mitigate cost increases and protect gross profit. We expect to deliver $77 million-$80 million of adjusted EBITDA, translating to modest margin expansion year-over-year. Our model naturally generates meaningful SG&A expense leverage. We are reinvesting a portion of this in 2023 to support our continued growth and evolution as a public company. First, we have the wraparound impact from associates hired in 2022 to support public company operations and compliance. Second, we are making key strategic hires in development, field operations, and finance to support our growing license pipeline and drive four-wall profitability over time. Lastly, we are investing in our associates through larger merit increases given the inflationary macro environment. We believe rewarding our associates for their commitment to the brand is the right thing to do and in line with our corporate values. We are pleased that these investments should strengthen our leadership position over time, and we expect to return to meaningful EBITDA margin expansion in fiscal 2024. We expect approximately $28 million of interest expense this year, slightly weighted to Q4, given a 53rd week in 2023. With the valuation allowance on our deferred tax assets now fully released, we currently believe our 2023 effective tax rate will increase to approximately 18% before discrete items. Given our capital structure, we expect our effective tax rate to increase to the 25% statutory rate over time as pre-IPO shareholders exchange their Class B shares for Class A shares. Incorporating these interest and tax estimates, we expect adjusted net income between $22 million and $24.5 million. Before I open the call for Q&A, I'd like to provide some insights on the seasonality of our full year outlook. We expect same-store sales growth to be fairly consistent throughout the year. At a high level, the first half of the year will benefit from last year's service price increase, while the back half of the year will benefit from lapping the modest transaction headwinds we began seeing midway through 2022. From a system-wide sales perspective, we believe that 2023 sales will be slightly more weighted to Q2 and Q4 as compared to prior year, with the continued strength of Wax Pass sales generated in those quarters during our regular semi-annual promotional periods. In terms of SG&A, we expect the payroll deleverage from the investments I mentioned earlier to be more concentrated in the back half of the year as associates are hired. Additionally, we plan to shift our marketing spend within the year. Our marketing fund approximates 3% of system-wide sales, which means that as we grow our network and top line, our marketing budget expands as well. In 2023, our annual budget is increasing by approximately $2 million. As David alluded to in his opening comments, we plan to spend the vast majority of those incremental dollars in Q1 to attract more new guests to the brand earlier in the year. We expect Q1 Adjusted EBITDA margins near 30%, increasing to the mid-30s margin rates for the remainder of the year. In summary, we are as confident as ever in the underlying strength of our business model and the predictable recurring visits from our Wax Pass holders. Transaction trends remain solid. Franchisees are expanding their portfolios with us, driving continued momentum in unit growth. We are leaning into our marketing and CRM enhancements to attract more new guests to the brand and then drive them to visit more frequently and spend more money with us. We are making investments in the right areas to extend our leadership position as a category killer and creator and as we continue taking share in this growing yet highly fragmented category. We'd now like to open up the call for questions. Operator? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please note to limit yourself to one question and a follow-up, then you may queue. Please stand by while we compile the Q&A roster. Our first question comes from Randy Konik from Jefferies. Your line is open. Yeah, thanks, good morning, everybody. I wanted to kind of unpack and discuss deeper the repeated commentary around the positive initial volume increases you're seeing from the, I guess, more recent cohorts. Maybe can you give us some perspective on just how much that has changed versus, I guess, years past? Kind of some of the learnings you have and what's driving that would be super helpful as we think about, you know, openings in the next few years, which sound like they're going to be, you know, opening up at higher rates on year one. Can we just unpack that a little bit? Thanks, guys. Hey, Randy. David Willis. Thanks for the question. In terms of order of magnitude, the last couple year cohorts are opening at about 10%-15% higher than what our historical maturation curve would suggest. As we really diagnose that, we see some common themes overall. One, some consistent upfront marketing spend to really drive the new guest files, so when the center opens, they've got an existing book of guests they can market to. The other thing that we've seen is our franchisees are hiring more waxers earlier in the cycle to support additional walk-in traffic and candidly just more transaction volume. Those are the 2 common threads. What we had referred to in terms of our focus this year is candidly further unpacking that in publishing to our network best practices. We plan to elevate those franchisees that are driving this level of momentum with the NCOs, put them on the spotlight and tell the rest of the network what they have found to work in their respective centers. That at least gives you kind of the satellite view of what we're seeing with the NCOs, Randy. Super helpful. My last question. There's a lot of opportunity, it seems, around you talk about average dollar sale or services per transaction to drive that higher. If I recall, in the last couple of years with COVID, there had been some probably some hesitation around, let's say, face services. Maybe give us some perspective of where we are in, you know, face services as a proportion of where they usually have stood in the past. Then just some of the strategies you're working on to drive additional services per visit, per customer going forward. Thanks, guys. Hey, Randy, thanks. It's David. A couple things on that front. One of the things that we ran very successfully was a rebooking contest in center, where we incented our wax specialists and our Guest Services Associates to ensure that before the guest left the center, that they rebook their next service. We saw a nice lift in terms of rebookings, which gives us that confidence that when you rebook in center, you're highly likely to come back at your scheduled date going forward. We've seen that be effective, and we're gonna continue to run that program in 2023 to drive that frequency of guests. Your specific question around face, we really haven't seen a significant difference in terms of our body face mix. The bulk of our guests continue to skew towards body services. We have expanded. We have a test going on in 250 centers around brows. We've done a couple things. One is that a real focused retraining on our brow waxing capability to make sure that that's best in class, particularly coming out of COVID when there wasn't as much face being done. Then second, we've introduced in these, we're testing brow tinting in 250 centers. We're gonna run that test for about another 30 days. We feel really good about the initial results that we have. I think, Randy, we're gonna cautiously optimistic that we can continue to see face percentages go up in 2023 as we add additional services. Great. Thanks, guys. Really helpful. Thanks. Thanks, Randy. Our next question comes from Jonathan Komp with Baird. Your line is open. Yeah. Hi, good morning. Thank you. Maybe a broader question, just as you look back over the last few quarters and your ability to read and react to the lower frequency of some of your guests. Just any current thoughts on, you know, the economic sensitivity of your guests. And coming into 2023, would you say you're better prepared to react to anything that may come up, just given all the initiatives you've outlined today? Hey, good morning, John. Yeah, listen, I think the good news is that we feel and have seen over the past few quarters, really sort of stable transactions in terms of across all of our guest profile. We always talk about sort of that Wax Pass holder, and the great news there is that Wax Pass holder continues to come, you know, 7.5 times a year, very regular. The top quintile come in 9.5 times a year. Generating, you know, 2/3 of our revenue. We always ring-fence kind of that real solid Wax Pass holder. We talked certainly at the end of last year about that episodic guest. You may recall, John, we talked about, we introduced a limited time offer of the 3 + 1 Wax Pass to help that guest that might have had a little bit more of an economic pinch in the back half of 2022. We retargeted a percentage of those guests that bought the 3 + 1 Wax Pass at the end of last year and saw a very nice mix. We offered them the opportunity to come onto the 9 + 3 with a little bit of an incentive to do that and saw a nice lift in terms of folks that migrated up from 3 + 1 to 9 + 3. As we continue to talk about us getting folks on a 9 + 3 Wax Pass is really our best loyalty program in inciting folks to do that. I think we've got, you know, better opportunities as we've got a better visibility to CRM and brought new capabilities in to help drive that, where we can take a look at those guests that might have not come as often as they had been in 2021 and 2022, and really retarget them with very specific, personalized, targeted messaging to drive them back into the center. We feel good about our opportunity with that guest and obviously continue to drive that loyal guest to stay on the regular routine that they've demonstrated over the years. Yeah, great. That's really helpful. Maybe one other question then just on the unit growth outlook. With, with you projecting another year above your high single-digit long-term growth target for new unit growth, should this be sort of a new run rate that we think about going forward, given the pipeline that you have? Just any updates you could share on a few of the more institutional franchise owners that you have in the system? Yeah, John. I don't think we're prepared to say, this is the new long-term growth algorithm. While we're incredibly pleased to deliver this level of unit growth in back-to-back years, and as David touched on, we feel incredibly confident about future development, I don't think we're there yet to say, let's assume 10+% is the new baseline. We are, our growth partners that we've talked about the prior quarters, while they represent 40% of existing centers in the system, they do represent 70% of that licensed pipeline yet to be developed. We feel incredibly confident about their ability to keep growing their respective footprints in their respective markets. Having said that, we had a very nice balance of NCOs from franchisees of all sizes in 2022. We had a very healthy percentage of our NCOs that were delivered from our smaller franchise groups. While we're excited about kind of the headline-grabbing numbers that the larger institutional players have committed to, we're equally happy that we have smaller franchisees still willing to commit to opening another one or two centers within. That's great. Best of luck. Thank you. Thanks, John. We have a question from Dana Telsey from Telsey Group. Your line is open. Thank you. Good morning, everyone. As you think about the product sales and new product introductions and what you've developed in 2022, what is the outlook for 2023, and how do you think of the margin opportunity there? The other thing, David, that you mentioned is that reporting for real-time analytics has been enhanced. What are you learning, and what adjustments or enhancements are you gaining from that process that impact 2023? Thank you. Hey, Dana. Good morning. Let me address the retail question, and then I'll let David talk about sort of the analytics that we're and kind of two pieces that, Dana, that we'll unpack. One is what are we utilizing here from field support, our, what we call our Franchise Business Consultants, what do they have visibility to, and how do they help drive profitability? Also what we're working on to allow the franchisees to have better visibility from a BI perspective at in-center. Retail product, you know, we pretty consistent in terms of what we think margin expectations are gonna be in 2023, as they've been historically. I think one of the things that we really have learned is that limited time offers are really a great driver for us. That newness of product for our guests is critically important and build it such that we run out of supply, so that there is a real high demand for the product. gets excitement within the center and gets excitement within our guest profile to get new products. We just launched a new spring bag that's out in the centers. It's early days. The sales are going very well of that. become accustomed to sort of the quarterly limited time offer offerings. What's really important to us is that our WAX specialists and our GSAs educate the guests on why the aftercare products that we sell are so critical to the overall service. That attachment rate is really what we look at, so that the guest gets the absolute best, the best service that they can. You know, pre, during and post-wax. That, that attachment effort continues to be focused on by our marketing and product team, as well as delivering that training out to the field by our, by our operations team. DW, you want me to just double click on the analytics? Yeah. On the reporting, Dana, I'll first talk about a new report we made available to our internal folks called the Ops Dashboard, and it gives, as David touched on, our Franchise Business Consultants real-time access to KPIs and profitability that they can in turn have those commercial conversations with our franchisees where KPIs may be lagging either benchmark averages or top quartile, arms them to have a healthier commercial conversation with franchisees on where they can drive improvements within their centers. Specifically, one of the most popular tools that we use with our franchisees is what we call a sales opportunity tool, and it's a very simple tool that shows our franchisees, if you sold one more Wax Pass per week, here's what that drives for your center. If you converted one more guest, we'll increase SPT by 10%. Here's what that means to your business on an annualized basis. In the second quarter, we will be launching to our network better reporting so our center-level associates have real-time access to their own KPIs. You may recall a number of our franchisees provide incentive compensation as part of the waxers and the GSAs compensation package. This reporting will allow in-center level associates to see real time how they are tracking on S Wax Pass sales, all those different KPIs that ultimately drive their respective bonuses based on whatever compensation structure the franchisees have in place within their centers. All in, we're excited about what we've already delivered, but we've got more cool stuff that we think can help not only our support for our field business consultants, but center-level associates drive better KPIs within their centers. Got it. Then just one other thing. How was California during the quarter, and what are you seeing there? Just lastly, the Wax Pass promotions. Last year, there was some date or timing shifts. How are you thinking about the Wax Pass promotion cadence this year? I'll start, Dana, with California. All in, we feel good about California. You know, we've spoken on several of these calls that they were playing a bit of catch up to the rest of the network given when they started reopening their centers in the first quarter of 2021. All in, I think our California franchisees feel very good. I think the average franchisee would say they got adequate staff on hand. We continue to focus on leveling up to the most efficient level waxers. All in, we're feeling really good, and we continue to see significant development for NCOs in the state of California, Dana. If I look at our license pipeline, that's probably the deepest pipeline that's concentrated in California amongst our other top states. Hey, hey, Dana, on the Wax Pass promotions, you know, typically, the Wax Pass is you pay for 9 and get 11, so what we call nine plus two. We have really, since the inception of the brand, had a semiannual promotion on that in the months of May and June, where you buy 9 and get 12, similarly in November and December, buy 9, get 12, or 9 + 3, as we call that. The only change we made in 2022 was that November, December timeframe, we pulled that forward and started offering that in mid-October. We'll kind of see, that was really sort of what was going on from a macroeconomic standpoint. Folks Black Fridays were getting announced in August. We just felt it was prudent for us to offer that a couple weeks early. We'll see if we need to do that or not, but we don't anticipate any other promotional aspects of the Wax Pass except for the typical ones that we've done May, June and November and December as we look at 2023. Thank you. Thanks, Dana. Our next question comes from John Heinbockel with Ladenburg Thalmann. Your line is open. Good morning, team. This is Julio Marcilla for John Heinbockel. Just a quick question on the needed ability to source, retail wax specialists and any efforts to further improve the productivity of existing ones. A quick follow-up right after. Yeah, Julio, I would say that overall, we feel quite pleased with the progress that we've made. We had touched on, I think, on prior calls some of the pilot programs that we ran with 21 different beauty schools throughout 2022. The success that we've had with those in terms of engagement with prospects, prospective waxers to our network, we now plan to roll that out to a broader network. I think we touched 750 students through the pilot programs. We had great engagement and conversion. We've made some enhancements to our careers page. We're starting to see better engagement and click-through and candidly submission rates for applications there. All in, from a, from a waxer pipeline perspective, I think we're feeling really good about some of the efforts we've undertaken over the last several quarters are starting to bear fruit for our franchisees. Kind of our barometer, Julio, is if there's a fair amount of chatter in the network, I need more waxers. We're not hearing that like we heard a couple of quarters ago. A lot of our operations teams are now really focused on retention strategy. Now that we've recruited adequate headcount within centers, how do you retain those waxers? And most importantly, how do you level them up so you can get them to the most, the highest level of efficiency and maximize revenue per wax week hour? Awesome. Thank you. The next one, just thoughts on further promotional programs around, you know, maybe moving some of those casual guests and, transitioning, you know, the casual or average guest up closer to the. upper quartile type of consumer? Yeah, yeah, Julio, thanks for the question. You know, we are not a discount promotional brand. What we are gonna do is lean into our enterprise data warehouse to really talk about what we call lapsed guests, so guests that may have visited us but haven't been there in the past six months, and send out to them some targeted messaging to drive them back into the center. If there's an opportunity to give them some incentive to do that, we'll do that, but we've got a couple of tools where we can do that via, you know, either reward points or some sort of incentive to come in for multiple services. This is not a, as you know, this is not a discounting brand. be overly promotional. Don't need to be, but it is our opportunity really as we get smarter and better muscle around understanding who those guests are to drive them back in and ensuring that we retain the guests that are most loyal to us to ensure that they stay on their same frequency of visits. That's our game plan under that attract more, buy more, visit more strategy, that 3-pillared strategy around how do we continue to drive sales and same-store sale comps Thank you. Appreciate the call. All right, Julio. Thank you. One moment. Our next question comes from Kelly Kago from Citi. Your line is open. Hi, guys. Thanks for taking my question. I think at you were sort of thinking that the comp progression through the year would be a bit different than what you're saying today. I believe you were pointing to more of a 3%-4% growth rate in the first half as you were, you know, continuing to cycle through the weakness that you've been seeing in the non-Wax Pass customer, and then maybe that was gonna get back up to your long-term algo in the back half of high singles. I think now you're saying it's gonna be more consistent. I'm just curious what's changed. Also, I believe you talked about some strong growth in January, but that might have been Omicron related. Just curious if the momentum you were seeing in January has continued so far quarter to date? Yeah, Kelly, I think, you know, we're 60 days past ICR. We continue to monitor transaction trends. As we touched on in our prepared remarks, we've seen a lot of stability now for the last 8 months really. When I think about kind of how we exited fiscal 2022, comp actually accelerated throughout the fourth quarter. We had a very strong January. Keep in mind our 1st quarter is typically probably our lightest top line from a system-wide sales perspective for the whole year. All in, I don't know that a lot has really changed other than we just have better visibility in terms of ticket trends that we've seen now for 8 months. as we kind of run those through our, our budgets and forecasts, that's kind of netting out to a fairly consistent comp expectation, throughout all four quarters of 2023. All right. Just on the January momentum that you were seeing and whether that's continued, I know you were kind of talking about it perhaps being Omicron related, but, just curious? Yeah, Kelly, I think if I remember right, ICR was the ninth or tenth of January. I think that was really that those comments were related more to sort of the past few weeks of fiscal year 2022, where in calendar year December of 2021, we saw the Omicron impact and we saw a nice lift in the as we exited the year. Got it. Then just lastly from me, you said the transactions are running below where you would typically like to see them. Could you just break down exactly what the sort of the transactions versus ticket growth looked like in the fourth quarter? Then just remind us, I guess when you think about through the year, it seems like maybe first half is more ticket-driven, second half more transaction-driven. I'm just curious if that's how we should be thinking about it. Thanks. Also what will be driving the transaction growth going back half year. Thank you. For Q4, transactions were basically flat. All of the comp in Q4 was really from a price perspective. As we look to 2023, given we don't plan in within our guidance to have taken service level pricing at center, I would expect about 3/4 of our comp in 2023 to come from volume, both primarily from ramping centers and about 1/4 of comp to come from price. Recall, when we take price, it takes about a full year to get the full benefit of that because we have such a high proportion of our service dollars that are being redeemed on Wax Passes. It typically takes a full year to get the full economic benefit of a service price increase, so we still will get a modest lift in comp from price, but most of that we expect to come from volume, specifically the ramping centers. Great. Thank you. Thanks, Kelly. We have a question from Hannah Pittock from Morgan Stanley. Your line is open. Hi there. This is actually Hannah Pidcock on for Simeon. Thanks for taking our question. You've kind of been talking all year about that dip in frequency from the low frequency, kind of non-habitual waxer customer. I'm wondering kind of how that trended through Q4, where it's sitting now. Then thinking about your comp cadence in 23, are you embedding some sequential improvement there, in the health of the consumer, you know, knowing obviously it's a, it's a relatively small percentage of your revenue? Hannah, this is David. We are not assuming there is sequential improvement in that guest. We didn't see any change in behavior in Q4. As I had mentioned earlier, we've really seen stability in our transaction trends, specifically from those guests. Now, notwithstanding, we have kind of better data. We can peel the onion a bit more with our data warehouse, and we understand that's really a subset of guests most recently acquired in 2021, not so much related to guests acquired prior to 2021. With that data, we can now arm our marketing team with who the guest segment is specifically that might have slowed down their visit frequency just a bit, and that's exactly what we plan to do with our CRM strategy. Makes sense. Maybe one quick follow-up. You mentioned you expect to be back to kind of margin expansion in 2024. Would you just walk us through kind of the structure of the investments that you're making, the extent to which they're one-time versus, you know, permanent parts of the base, but lever very quickly, just due to the size? Yeah. That's really associated with the OpEx investments that we've decided to make in 2023. We touched on kind of the wraparound impact from our fiscal 2022 new hires to support us as a public company. We're making discrete investments in our development and operations teams that if you think about as we continue to grow our network, we don't have to add a new development person or a new field Business Consultant every 10 or 20 centers, but every 80 to 100 centers, you're making fairly modest, discrete investments to continue supporting that growth. We are making those investments in 2023. I think when you factor in some additions we're making in finance that I think will continue to help drive our business as well, I would expect us to return to our a better leverage at the Adjusted EBITDA margin in 2024 and beyond. Makes sense. Thanks so much. Thanks, Anna. Our next question comes from Scot Ciccarelli from Truist. Your line is open. Hey, good morning. This is Josh Young on for Scott. Just wanted to ask around the overall staffing levels for the wax specialists. Just curious how that's trending, you know, given the wage pressures out there in the market. Wanted to see if you're seeing any significant changes in turnover rates or anything else to note there. Josh, I would say our staffing levels have continued to improve kinda quarter over quarter within center. From a turnover perspective, I don't think we've seen dramatic shifts, positive or negative, in terms of waxer level turnover. You may recall as we bring new waxers into the system, there's a, you know, decent amount of turnover in that first 90 days, if our franchisees can't, the waxers can't get to a certain level of proficiency within the first three months. We tend to see a fair amount of turnover in those first three months. We've seen no dramatic changes in the most recent quarters versus history there. Once our waxers are with us for a year, they tend to be pretty sticky to the brand. I don't think we've seen any dramatic shifts in terms of turnover. Josh, as David talked about in his earlier comments that, you know, we've had a hyper-focus in working with our franchisees about attracting waxers into the pipeline and making sure that they come to work at EWC. That focus is still ongoing, but also our operations team really working with our franchisees to say, "How do you develop a great culture in your center to retain those wax specialists that have come back and work with us?" I think candidly the strongest testament to the supply of waxers being adequate or back to normal is that our franchisees continue to sort of vote with their checkbooks and grow with us. They are not seeing any kind of an impediment to their continued growth, you know, north of 10% year-over-year growth last year and guiding to the same thing this year. We keep a close ear with our Franchise Advisory Council and all of our franchisees, and I think the fact that they continue to grow with us and not see that as any kind of a deterrent to their growth is a great testament to the ability to get an adequate supply of wax specialists. Got it. That's helpful color. Thank you, guys. Thanks, Josh. We have a question from Korinne Wolfmeyer with Piper Sandler. Your line is open. Hey, good morning, and thanks for taking the question, and congrats on a great quarter. Just to touch on some of the commentary on where the new centers are being built out. I believe you said they're more so gonna be in existing markets. You know, what is the path maybe longer term to moving more into those untapped markets? Is it really just we need to get those franchise relationships? Is it about finding the right market and making sure they're ready to bring in, you know, a waxing center? Just, you know, what is the path to moving into more of those other markets? Thank you. Yeah, Korinne, thanks for the question. Last year, we opened centers in 32 different states. We saw, you know, the heaviest concentration of those NCOs coming in the states where we have already at the most significant presence as our franchisees really wanted to protect and expand their respective markets. Those states are California, Texas, Florida, New York, New Jersey. Illinois saw a fair amount of NCO activity last year. Our franchisees are really developing centers where there's demand from guests. As we say, 70%-75% of our white space resides in markets where we already have a presence. We've got just a lot of opportunity to continue expanding our footprint in the states where we have a presence. It's not to say that we won't go to new markets if there's both franchisee and guest demand there. Most of the demand resides in states where we already have a presence. Hopefully that helps. Yeah, that's very helpful. Thank you. Can you just clarify quickly that 53rd week that's gonna fall in Q4? I believe you touched briefly on, you know, kinda cadence of the top line, maybe a little bit heavier in Q2 and Q4, but can you just elaborate a little bit more on the cadence we should expect in 2023? Yeah. The 53rd week in 2023, you may recall we had a 53rd week in 2022, we're just aligning kind of our fiscal calendar with retail calendars. In terms of a slightly stronger Q2 and Q4, we've seen that over the last two years, actually last several years. You may recall we run our traditional semi-annual Wax Pass promotions in the second quarter and in the fourth quarter. How does 2023 compare to 2022? I would say the second quarter and fourth quarter could be 50 to 100 basis points heavier in both of those quarters relative to 2022. That overall profile is not dramatically different than what the brand's experienced over the last several years. Very helpful. Thank you. Thanks, Korinne. Thank you. There are no other questions in the queue. I'd like to turn the call back to Mr. David Berg for closing remarks. Thank you, everybody, for your time today on the call today. We certainly look forward to chatting with you over the next few days and weeks, and continuing to deliver on our long-term growth objectives. Thank you for joining us on the call this morning. This concludes today's conference call. Thank you for participating. You may now disconnect.