Stacie Shirley: Yes. Hi, Melanie, this is Stacie, and thanks for being on the call. The guidance we gave was 2% to 5% for the year. And as we look at that over the course of the year, we’ll ramp as the number of initiatives that David spoke about both in-center and from a marketing perspective as those continue to gain traction. And so think of that as you go through the year. Q1 will be the lowest and will continue to ramp. From a system-wide sales perspective, similarly Q1 will be our lightest quarter with Q2 being the heaviest quarter, which is similar to what we’ve seen in the past. From a pricing perspective, we have not baked in kind of an EWC corporate enterprise-wide guidance into our guide on the top line. However, as you know, our franchisees often take price where they think that it is appropriate.
And we will continue to monitor is there opportunity whether that is again a broad based price increase recommendation or even service-by-service. But today, that’s not necessarily baked into those projections.
Unidentified Analyst: Thank you.
Stacie Shirley: Thank you.
Operator: Thank you. One moment please for our next question. And our next question coming from the line of Scot Ciccarelli from Truist. Your line is open.
Josh Young: Hey. Good morning. This is actually Josh Young on for Scot. So another one on that ’24 sales guidance. What have you guys baked in terms of trends for the different guest cohorts, specifically around that more episodic guest?
Stacie Shirley: So we don’t really break that out as far as how that would come into play on the guidance. But what I would tell you is as we exited Q4, I think from a macro perspective, not big changes, right? Not necessarily a deterioration, but not really an improvement. We had started to see an improvement in that, can call it, non-core guest as we entered into Q4 as a result of the number of things that we were doing. But we haven’t really, we’re not breaking that out. Our Wax Pass or core guests, right, which is Wax Pass and our routine guests, those continue to be very strong and their behavior has not changed as it relates to their spend and their frequency of visits. Again, that represents a little more than 75% of our total system-wide sales. Anything to add?
David Willis: No. The only thing I would add to that, Josh, is as we had mentioned in our prepared remarks, we’ve onboarded this new media agency that’s hyper focused on driving in-center reservations. We have a number of initiatives focused on driving new guests to the brand. And we also candidly in this macro environment believe we can control the things that we can control. So we’re redeploying our field trainers to embed them in markets working with our franchisees to drive impact at the local level. Now, a number of those initiatives we would expect to see materialize in terms of tickets and transaction growth throughout the year. So we feel very good about our overall guidance, but it will build, we do expect that to build throughout the year.
Josh Young: Yes, that’s helpful. Thank you. And then one more follow-up, if you could talk about the trends you’re seeing in terms of hiring, retaining wax specialists. And then any thoughts there as it relates to the outlook for ’24?
David Willis: You bet. So candidly, we ended the year, we think in a very healthy position in terms of overall network levels of staffing. The average center had the requisite number of — target number of wax specialists, our operations and industry relations teams supporting our franchisees made some good headways throughout 2023 and actually elevating the mix of our more experienced waxers relative to our less experienced waxers. We’ve extended our beauty school partnership programs. I think we’re now in 31 schools in eight different states. So overall, I think we feel like the network is adequately staffed and we are well positioned to support continued growth for the brand.
Josh Young: Got it. That’s helpful. Thank you.
Operator: Thank you. And our next question coming from the line of Korinne Wolfmeyer with Piper Sandler. Your line is open.
Korinne Wolfmeyer: Hey, good morning team. Thanks for taking the questions. I’d like to touch a bit on the expectations for EBITDA for the year. I think you said about like excluding the laser investment about 130 basis points of margin expansion. Is that how we should be thinking about the expansion beyond 2024? And then as you continue to roll out laser, should we expect further investments in the out years to help support that, or is this more of a onetime thing here in 2024? Thank you.
Stacie Shirley: So we haven’t given guidance, obviously, outside of 2024. But I think as you think about that, right, we show typically, we show leverage on our SG&A. And then I would consider some level of margin expansion, gross margin expansion would be built into those numbers. So you would expect some level of expansion year-over-year for sure. From a laser perspective, the investments that we’re making this year, some of those are just one time foundational type investments, some of which are also to build the infrastructure that we would need to expand this test and to further centers. So there would continue to be investments, but not I wouldn’t assume at this level.
Korinne Wolfmeyer: Very helpful. Thank you. And then if you could just touch a little bit on what’s driving the improvement that you saw in Q4 for those episodic guests. How much of it you think is attributed to your increased marketing efforts that you’ve been implementing versus just general market improvement? Thanks.
Andrea Wasserman: Hi, thanks for the question. This is Andrea. I’ll take that one. So when we think about our marketing efforts, it’s really focused on two segments of our guest population. First and foremost, bringing new guests to the brand, and secondarily, making sure that we’re increasing the conversion of Wax Pass once we have guests in the fold. And so that really is our focus as opposed to the smaller segment of the guest population that is more episodic, as you said. That said, we do think about what will motivate that population, and we know which portion of that segment is responsive to promotions. We can be very tailored in doing that, so that we’re not promoting more often than necessary or doing things in a blanket way and so some of that certainly does help as we think about the right times and tactics to use in increasing visits among that episodic guests.
