Thanks, everybody, for joining us. We're happy to have the management team of European Wax here for a fireside chat. We will, we'll go through some questions and then see if there's any audience questions when we're finished. But I guess I wanted to, to kick off. Thank you both for being here. And I wanted to kick off by just talking about some of, like, like maybe sizing the market. Talk about your market share, how big it is, and where you see the areas of opportunity for that.
Yeah, thanks, Lorraine, for having us. So we operate in a really highly fragmented market. Our best intel would suggest that the out-of-home hair removal market in the United States is about $18 billion. So when you think of our 2023 system-wide sales, about $955 million, we've got a lot of market share opportunity to go. In terms of the out-of-home waxing part of the market, the realized part of that market is probably around $6 billion, and that is growing about 8%-9% per annum as compared to the overall market that's growing about 2%-3%. So we think we're well positioned within the part of the market that has very attractive growth rates. We've got a lot of white space.
While we're the U.S.'s most significant leader in our space by a pretty wide margin, we think there's a ton of white space for us to grow over the next several years, Lorraine.
Great. And then what are the most popular services and price points? Maybe it would help to set the stage, in terms of sort of how big of a spend is this for your average customer?
Yeah, so our average ticket is right around $60. Most of our tickets have about tend to average about 1.5 services per visit. So our services start off around $12-$14 for the facial services and then work their way up to kind of $70-$80 for some of the larger body part services. In terms of overall mix, we've been pretty consistent. 80%-85% of our service mix has been body services. Those are a bit more expensive services, Lorraine, and the balance of that has been on facial services. One of the needle movers for us is our services per tickets. We have a number of strategies in place working with our franchise owners to really try to drive services per ticket. We wanna optimize revenue per wax suite hour.
That second and third service that a guest may add during their visit has incredibly, accretive gross margin flow-through for our franchise owners.
Thanks. And your core customer base has been really resilient. I think that's been surprising to a lot of people. We always hear the perception of this as it's a treat. It's a spa service. It's, I think what you've seen proven out over the past several years is it's more of a need-based, or that's how your consumer considers it. So maybe talk about your core customer, who she is, and how why you think she's been so stable for the past several years.
Sure. So our core customer we consider our core customer to be our Wax Pass guests and our routine guests. To your point, this is they really view waxing as a nondiscretionary part of their personal care regimen. They've shown incredible resiliency over the last several quarters. They visit 7.5-8 times a year, and they've maintained that visit frequency and their annual spend kind of regardless of what's going on in the macro. So for our franchise owners, it's a very predictable, reliable revenue stream. This core guests if I look at our overall system-wide sales, this core guest makes up over 75% of our system-wide sales. So it's been a very dependable guest for our franchise system and one that's been very predictable over the last several years.
Thanks. And then how does this compare to the more infrequent, episodic guest? Maybe just walk us through visit spend in 2022, 2023, 2024, how that's evolved.
Yeah, so our episodic guest has been probably a bit more impacted by the macro environment. When we refer to the episodic guest, this includes new guests to the brand and those what we would call event-driven waxers. So unlike our core guests, Lorraine, that really view waxing as a nondiscretionary part of their regimen, this is the part of our guest file that views waxing somewhat as a treat. So they will tend to wax before a spring break trip or before a summer vacation or before a holiday party. This part of our guest file visits about three times a year, so not near the same frequency that our core guests visit. And they spend less than half of what our core guests spend.
So we see real opportunity within this part of the file to attract more new guests to the brand and try to get them converted to a Wax Pass where we can see them on a much more predictable basis than the episodic guest.
Mm-hmm. And, maybe talk through some of the strategies. What are you working on to try to attract those customers?
I mean, in many cases, it's really all about the data. So the brand invested a few years ago prior to my joining in a quite sophisticated enterprise data warehouse, and now we're really able to realize more of the fruits of that, especially as we evolve our marketing technology stack and we're able to pull insights out of that and refine the ways in which we reach out to guests. So certainly, it's still email, but now it's also SMS, app push notifications, direct mail, and other tactics. And when you think about where it starts with new guests, that's obviously more of your awareness building.
You're introducing the brand, making sure that they're understanding our value propositions around speed and efficiency and cleanliness and expertise, hygiene, all of these things, and then making sure that from that point on, especially after a first visit, we are being very, very clear in all of our messaging flows about what Wax Pass is, the value of a routine waxing regimen, why Wax Pass itself is really valuable from a financial standpoint, a savings standpoint, and explaining that story to them.
And you said Wax Pass. We haven't touched on that yet. So, maybe you could just talk about what is Wax Pass? What is it? How do you sell it? I think it's a really important part of the recurring nature of the business model.
It really is. It's the Wax Pass, it's almost like a membership light program. It's an economic bundle that we make available to our guests. So a guest can purchase 11 or 12 wax services for the price of nine. So we call it a 9+ 2 or a 9+ 3. What we found is if a guest is new to waxing, the first visit is really about education. And as Andrea had mentioned, that second and that third visit, it's just a better service. The hair grows back finer. It's a more comfortable service that second or third visit. So all of the scripts that we use within our centers are really designed to educate new guests to the benefits of waxing, what to expect on that second or third visit.
It's really that third visit that is your best sales point to get the guest hooked on a Wax Pass. And we found that once a guest will make that financial commitment to the brand, it does a couple of things. It provides the franchise owners great visibility into future visits, and that guest then tends to use it. We see very little breakage in the Wax Pass. So most guests that purchase a Wax Pass tend to actually consume them and ultimately repeat purchase.
What percentage of the business has done using a Wax Pass?
Between the Wax Pass, it's just over 65% of our business. When I include our routine guests that we consider those our core guests, that then gets you over 75% of the business.
And then, I think it serves as a really good indicator for the future of the business. Can you talk about how it helps you predict,
It really does. When you think about so within our four walls, labor is the single largest cost item. So giving franchisees visibility into future visits allows them to really optimize the scheduling of their wax specialists. So, when a guest makes that commitment to the brand, it really allows our franchise owners and center managers to schedule with more efficiency. Those franchisees that are managing their books, managing the schedule, the most efficiently tend to make the most money.
You recently tested out a 3+1 Wax Pass, which is different than what you described earlier. I think this was to attract and retain new guests. Do you plan to roll this out across the network and maybe just elaborate more on the test and how it impacted the customer acquisition?
We are rolling that out. We're in the process of finalizing that right now. It will go network-wide this spring. It is really it's exciting for us. It's really meant to create a sense of urgency at a guest's first visit. As David said, the first visit is really that introduction. And but we do think there's an opportunity there to for a guest to commit a little bit upfront. The feedback we were getting, though, is that the wax pass is intriguing, but I've been here once, and I'm not quite ready to commit to a 9 + 2, a 9 + 3. And so this is a way to say, "We wanna recognize that you're here and that you're interested in continuing to wax with us.
Here's an option that feels a little bit more digestible, accessible for you, and that's the 3+ 1. So throughout last fall, the way that we got there is that we had this kind of hypothesis that something could move the needle with these new guests and tested a number of different options. This one clearly rose to the top of the heap in terms of conversion at that first visit. So we're excited about that.
What are the implications of that from a sales or sales predictability or margin standpoint versus the traditional wax pass?
Well, there's upside there, because the conversion, at least based on the test that we ran, which was done in quite a scientific way, the conversion there will be so much stronger than what we had previously been seeing from a bigger wax pass at that first visit. And so we think there's incremental opportunity there. Obviously, still early innings on it. It was only a test. And so now we'll see with the rollout. Obviously, we do need to get our in-center teams on board with communicating it and selling it and seeing the value in it. But certainly, we think that there is upside there, or we wouldn't be as excited about it.
Okay. And is there a limit on the redemption period for the smaller ones?
Our Wax Passes, don't expire. You know, we're always looking at everything we do, but certainly Wax Pass as well and how we might wanna evolve programs. But Wax Pass does not expire.
Okay.
And the longer-term goal there, Lorraine, I mean, that is really a means to an end. It's to get that new guest, give them an opportunity, and give them a reason to come back for that second and third visit. The end goal would be to ultimately get them on a 9+ 2 or a 9+ 3.
Mm-hmm.
Yeah.
Okay. Any other initiatives you're working on to drive Wax Pass sales?
It's there. There are. And some of them, I think, are discrete initiatives such as how do we wanna approach Wax Pass promo period that we already have, and what are the types of new offerings like a 3+ 1. Another that I would put in this category of discrete initiatives is that we're now selling Wax Pass online for the first time. That was something that, believe it or not, we're 20 years this month. In our 20-year history, we hadn't done until last fall. And so we are seeing that is, one, it just removes friction. It's what our guests expect us to be able to do and that is a way of increasing our recurrence of Wax Pass purchases and also bringing new Wax Pass guests into the fold. So that's an exciting one.
And then beyond that, it's thinking about how we talk about Wax Pass. Historically, for example, our in-center creative was all about, you know, terrific images and people. And that's still important, but we saw an opportunity to make some of our in-center creative actually more text-heavy. And before you even walk in the door, make sure that we're communicating the value of Wax Pass. So there are tactics like that as well. And then, as I briefly mentioned earlier, thinking about what are these educational flows, we call them, after the first visit where we wanna make sure that guests know that we have Wax Pass if they didn't already see the in-center creative and hear about it other ways and that we're educating them about why it's a great routine to get in and how this is the most best financial way to do it.
And then you recently engaged with a new media agency to drive the in-center reservations.
Yes.
Can you discuss the program and the impact that agency's had?
Sure, sure. Thank you. So I'm glad that you mentioned that we engaged with them to drive in-center reservations because all of the national media work that we do really is to drive in-center reservations. We're not doing big top-of-funnel media. We're not doing it. It's not a national play. We say that we, excuse me, market nationally to drive reservations locally. And so it is all about that. And what we've seen so far, we onboarded with this new agency end of October last year. And from the time that they really took over the accounts and started adding new accounts until now, we've seen a very consistent increase in efficiency. And so this is something else where it's early.
I wouldn't say that we have a very significant amount of time and spender under our belts, especially given that this was through the holiday season, which is always a little bit, kind of can be an outlier in terms of digital media spend. So we're continuing to test and learn, but overall, really happy with our ability to get more efficient in what we were already doing and also to get into some newer channels such as affiliates and TikTok. Although I guess with TikTok, we'll see what Congress says today.
And so they're driving in-center reservations. How exactly? And maybe talk about, you know, the guest experience.
Mm-hmm.
Any incentives you're adding to try to increase the number of reservations as well?
Well, from a media standpoint, we're really focused on making sure that our value propositions, the ones that I've mentioned earlier around efficiency, hygiene, expertise, that that's actually part of the advertising that we're doing. So again, this goes back to we may have said everybody's smooth, which is one of our big headlines before, but didn't necessarily carry through what that means and how you get there. So we're being more explicit now in that way. We're also using what's called performance creative. So rather than having creative and just testing to see what works in digital, we are actually designing modules and ads specifically for different channels and different purposes. So that makes a big difference as well. In terms of incentives, First Wax Free has been what we've hung our hat on for 20 years now, and that continues to be a mainstay.
I think that the add-on there is, okay, you get the First Wax Free, and now we're going to tell you about this 3+ 1. So it kind of comes back to that and then also flows into this new and more consistent messaging around Wax Pass.
And then, in the room with the esthetician at the checkout, you know, how are you trying to drive that repeat appointment creation?
So our training is something that I'm really proud of. We actually have a new training system with new technology and new modules as part of that rolling out this year, which will really enhance the way that all of our wax specialists and our guest services associates at the front desk are able to learn what types of scripts are most valuable, what are the key messages that they wanna be highlighting. So we are pulling that into the wax suites more and more. We're doing visual merchandising actually within the suites of our retail product to make it easier for wax specialists to talk about that. We have some new fun buttons that they can wear now that say, "Ask me about Wax Pass," or "Ask me what my favorite retail product is," just again to introduce some of these prompts.
And of course, our, you know, our franchisees are also always thinking about the right ways to incent their teams for different behaviors as well. So I think that's where it all comes together.
Mm-hmm. Well, I'm gonna switch gears to pricing. Can you talk a little bit about your history of taking price, how that's executed, what you're recommending to your franchisees, and what they've actually been doing over time?
Yes. So as we've said before, pricing was a tailwind for us in both 2021 and 2022. I do need to remind everybody that legally, our franchisees set their own prices. So we wanna be a helpful partner in that process. We are constantly analyzing the market and trying to come up with insights and recommendations even that we can share. But at the end of the day, it's a decision that our franchisees make. Some of the factors that weigh into what we're sharing with them and what those recommendations might be are what our transactions trends are across the network and in certain areas, what our competition is doing, what we perceive consumer willingness to spend and elasticity to be, our costs, franchisees' four-wall margins. So all of that is a part of it.
We don't at this point have widespread plans to make widespread price increase or decrease recommendations for this year. But it's really an always-on kind of awareness that we wanna be bringing to franchisees. We, as a part of how we think about pricing, also talk about bundles. So how can we, you know, put two different services together, get guests to pay a little bit more, not as much as if they were paying separately for these services? And that is a way to increase the dollars per ticket, we say.
Okay. Bundles meaning the Wax Pass or bundles meaning.
I'm sorry.
Adding services together?
Exactly. Two services. Yes. So maybe you wanna, you know, do a leg and add on a brow, things like that.
Okay. Got it. So within your comp expectations for this year, is there any price that you expect to realize or mix from the?
With the gains for this year, we would assume most of the comp is coming from an increase in transactions and tickets. We had talked a bit that we expect the comp to build throughout the year. So we think Q1 will be the low point. But we think the lion's share of the comp this year should come from initiatives where we're driving more transactions through the system.
Okay.
More so than price.
And then unit growth is a key tenet of the European Wax story. Can you talk about the new center economics? What's the cost to open, the break-even, the maturity, and then how consistent these centers have been to ramp?
Yeah. So historically, they've ramped very consistently, really, across geography. So if you think about the upfront cost, this is a 1,400-1,500 sq ft box. The standard configuration has five or six wax suites. It's about $400,000-$450,000 to open a European Wax Center. Those costs obviously vary a bit market by market based on GC labor costs. Historically, over the brand, year-one revenues have been kind of $450,000, franchisees to get to four-wall break-even typically by month 14. It generally follows a four to five-year ramp. We consider a mature center around year five. And historically, those have been throwing off $1 million in AUV and around 20% four-wall EBITDA. The $400,000-$450,000 has increased from used to be $350,000 a few years ago. So what we're really focused on is driving faster eight-year-one AUV ramps.
We had our franchise conference a couple of weeks ago in Vegas, and we introduced what we call our new and improved NCO playbook. All we've really done is we've studied in any given year when I say 450 is the average year-one AUVs; we have centers that open far north of that every year. So we've studied our best-performing centers that have opened over the last couple of years and just making recommendations, in fact, prerequisites for the network for them to open their centers. We've studied the amount of money they spend before they open, the number of guests they have in their file on day one. Candidly, our best operators are spending more money in months two, three, and four. So we're being a bit more prescriptive to our network, say, "Hey, here's how many guests you need the day you open.
Here's what you need to do in the months after you open. And also what the both in terms of headcount, the number of staff you need to have and the requisite training. We saw in some instances over the last couple of years, we allowed centers to open, didn't have enough new guests in their file, or maybe they weren't properly staffed. And it perhaps no surprise they did not perform as well as those folks that spent the right amount of money, had the right number of guests on day one, and were properly staffed from both a headcount perspective and an experience set. We've seen our best centers open with more experienced waxers out of the gate and a bit more experienced center managers.
So we're very excited about this playbook, and we think this, the whole goal of this is to help our centers open with a steeper ramp in year one, if you will.
Mm-hmm. And the pipeline's deep. I think over 370 licenses. Can you talk about center opening plans for this year, how many and what types of markets?
Yeah. So, our guide was 75-80 new centers in fiscal 2024, which is in line with our long-term growth algorithm. We have this is on the backside. The last two years in a row, we've opened 10%-11% new units in each of the last two years. So we feel really good about our ability to deliver 75-80 on the backside of low-double-digit two years in a row. We have been very active in California, Texas, Florida, New York, New Jersey over the last couple of years. I expect this to remain active in those markets but probably different DMAs. For example, we had the great franchise brand ambassador that was very active in the San Diego market the last couple of years. We probably won't stand up a lot of units in that particular market this year.
We wanna give those markets time to absorb what has been developed over the last couple of years. But we've got another great, great growth partner in Northern California that hasn't been quite as active that we would expect to pick up some activity this year. So the 370 licenses in our pipeline, we feel good about our visibility, not just for 2024, but our ability to deliver high single-digit unit growth in 2025 and beyond.
Who, who's opening these? What kinds of franchisees are you focused on?
Well, we're fortunate to receive commitments from franchise owners of all sizes. When I look at the pipeline of 370, about 70% of that is which represent commitments from our larger growth partners. These are either private equity-backed operators or self-funded multi-unit developers. So they've got their own source of capital. We've got about 14 of these groups now that are active in the network. So we refer to them as our growth partners. These folks represent about 50% of all the open centers in the country and about 70% of our commitments going forward. They are. We talk about them more as the rainmakers because they're the ones that kinda make outsized commitments in terms of total license counts.
We're equally excited about the smaller folks that might own two centers that are still signing up to develop another one or two units in their respective markets. So we welcome growth from everyone in our network. We've seen over the last couple of years, over 90% of all new centers are coming from existing franchisees. That's important to us. It tells us they are generating sufficient returns on their capital and they're willing to reinvest with the brand. So we hope to keep supporting that group and see continued reinvestment from our existing operators.
A question I hear a lot is, how the rate environment changes things. You know, rates are higher than they were when you laid out your initial plan at IPO. So how does that change the appetite or the profitability of your franchisees?
Well, certainly, the higher rates for those that have put leverage on their balance sheets, it's impacting their bottom lines more than it did a couple of years ago. And we're sensitive to that, Lorraine. We, I think by and large, the visibility we have into our franchisees' balance sheets would say they, the leverage that's there is at responsible levels. Thus far, we really haven't seen the elevated interest rates put a dent in demand for additional licenses or developments. But we are sensitive to the fact that at a higher interest rate, these guys are making less net income than they were, you know, in a lower-rate environment. We're doing our best to support our network to ensure that the four-wall cash flows are still very positive, that will support further development.
And, are there any constraints on unit growth, finding labor, materials, the right markets?
I think a practical governor on unit growth would probably be access to labor. Now, as we exited the year, all of our centers had the target number of wax specialists on their payrolls. And actually, we're making very good progress on driving the mix of our most experienced waxers to have a higher mix of what we call our Red and Orange-level waxers. Our industry relations team has been very active in supporting our franchisees in terms of recruitment and making sure those centers are properly staffed. We have beauty school partnerships now in eight different states with, I think, 38 different beauty schools. So while that's the practical governor, it has not put a constraint on our ability to grow. But I think at some point, that could be the practical governor on our unit growth.
I wanted to spend a little bit of time on laser, which is a trial that's underway. Can you talk about the rationale behind moving into laser and what the opportunities look like there?
Yeah. So we saw laser really as an opportunity to drive incremental four-wall revenue and EBITDA for our franchisees. As we polled our guests, we learned that guests basically would give us permission to try other forms of hair removal beyond just our core service, which is which is waxing. So we started this pilot in six centers in New York, and we wanted to prove a couple of things to ourselves. One, could we use laser to drive attract new guests to the brand? 20 weeks of data would suggest, yes, we, we can do that. We wanted to evaluate whether we could drive a greater share of wallet. So could we get a guest that's waxing one body part to laser another body part? Thus far, the pilot has proven we can do that. And can we contain cannibalization to within acceptable levels?
This cannibalization, I'm referring to as within our core services. We found through 20 weeks of data at these 6 centers, we've been able to do that. The ultimate driver and litmus test for this to prove successful for the brand is can we drive incremental four-wall revenue and EBITDA? 20 weeks of data would say this has significant potential for the brand. On our most recent earnings call, we, we decided and discussed that we want to expand the pilot. The current franchisee that's in pilot has seen enough data that he's going to expand the number of centers in New York where, where he's offering laser services. As you may know, the regulatory environment varies a little bit by state. We wanna get smarter in other states that have different regulatory environments than the state of New York.
20 weeks of data, we're very encouraged. It's still very early days. We think an expansion of the pilot could inform ultimately how big and how broad laser could become within European Wax Center.
Thanks. And I think it's a very different business because you have to attract. It's not as much of an evergreen customer, but it's a much higher price point. So how do your franchisees balance those two factors?
It is. So if you think about our approach on pricing has been a little bit different than the market. We've tried to be very transparent about, "Here's the cost for this body part or that body part," and the price of laser is quite a bit higher. If you think about laser pricing relative to wax pricing, to laser one body part, that represents kind of two-three years' worth of waxing revenue. And so thus far, what we've really when you look at our number one core service, the Brazilian bikini service is our number one core service. We're seeing thus far a lot of interest in lasering other body parts beyond Brazilian bikini service. So we do wanna strike that balance. And 20 weeks of data thus far would say we've been able to do that.
But I still think we have quite a bit to learn, Lorraine, on how big and broad laser could go.
Okay. Thanks. And then moving on to another opportunity that you had tested and now you're rolling out, which is brow tinting. Can you talk, well, maybe just define for the audience first, what is brow tinting? You might not have a lot of brow tinters in the audience. What is it, the success of the trial? And then, what made you wanna expand it?
So very briefly, it's putting color into the brow as opposed to just removing hair from it. And the reason that we wanted to test this is because we knew that our guests were coming to us for waxing, brow waxing being our, our second most popular waxing service that we offer, and then yet going somewhere else for their brow tinting, which is not convenient for them. It's a missed share of wallet opportunity for us. And brow tinting happens to be a really quick service that can fit very nicely into the 15-minute reservation booking window that we're using for the brow waxing anyway. So from a, you know, labor and margin standpoint, very, very opportunistic in that way as well. We did test it in a subset of centers, got a really positive reaction from franchisees, from their teams, from guests.
We actually saw that guests coming in for brow tint in a lot of cases were new guests to our brand who found this a good entry point for them and also that a good proportion of these guests were coming back in quick order for more brow tinting. So some nice repeat behavior there as well. And because of that, we are rolling it out almost network-wide this spring. I say almost because there are a couple of states that prohibit it, at least prohibit most formulas for it, the ones that we would be comfortable using. But most of the country will get it this spring.
Okay. All right. And then, you know, men represent a small proportion of the customer file. We highlight First Wax Free for the audience. But talk a little bit about the market size and the opportunity there.
We do know that it's an opportunity. As you pointed out, it is a small portion of our guest file today. We talked a couple of times today about differing costs of guest acquisition, laser being more, different channels being less, efficiency. It turns out that the male guest in this category is more expensive to acquire. And so when we think about our most efficient opportunities to drive in-center reservations, which we said is the goal of all of our media, we wanna be really measured in how we are reaching out to this target audience, to this demographic. But it is. We know that for every point of market share that we can gain there, there is some nice upside.
And so the way that we're approaching it is taking a hard look at our website, at our digital experiences, making sure that they're well optimized for anybody who is searching digitally for male waxing, for men's waxing services, things like that. And then also, once guests get to our website, that it's very easy to find and book the services that are most popular and most in demand from men or from people who may be making reservations for men.
Got it. So let's open it up and see if there's any questions.
All right. Couple of questions. Thanks. I guess the first one, just getting back to the brow. Isn't there eyeliner tinting also? Like, if someone's coming to do the brow, can you also do it? It's probably maybe a dumb question. But isn't, don't people do both?
I think you're talking about permanent makeup.
Right.
Which is a little bit different and would go a step farther. Or the way that we think about the expansion of services is what is kind of very adjacent or within that hair removal space. So obviously, you know, we're known for waxing. Laser is another modality of hair removal. Tinting is often something that goes along with brow waxing. I think that beyond that, other forms of permanent or semi-permanent makeup are probably a little bit different, and not something that we have plans to do right now.
Okay. Then when you think about the customer base, beyond trying to expand in the male, just what's happening age demographics? You know, we've seen, you know, teens, preteens even very interested in skincare, right? I guess it's the Sephora teens, right? So is your customer base beginning to, you know, age or, or, are people coming into the door maybe at a younger age and, and just, you know, is there a way to sort of take advantage of that?
Overall, we've seen a lot of stability in the broad age range that we serve as a brand. Over time, those endpoints really have not changed very much. In terms of the distribution within them, anecdotally, yes, we do know that people are starting their hair removal journeys, be it laser or wax, at an earlier age. So far, that's not registering heavily in the data, I think in part because of the way that we're able to collect data and who's actually making the reservation and some nuances like that. But certainly would agree with the trend that you're pointing to. You know, we are hearing a lot about spring break this month in particular. We're seeing nice yes, exactly.
Yes.
We are seeing that trend, specifically in centers that are near universities. That's been prevalent specifically over the past week. I was, you know, we were talking about this data yesterday. And that is, again, a bit of a younger customer, perhaps not as young as you're talking about. But overall, yes, is a trend. And we are thinking about at what age we want to be marketing to guests and how to go about doing that.
And then when you think about, like, the wallet, I guess, for self-care and beauty care, you know, how much of it do you compete more directly with nail salons or, you know, just thinking about how people are allocating what they're gonna spend on, you know, their beauty basically, like, what do you, where do you find your sort of competing against most?
Well, I think, you know, as Lorraine said, for our core guest, which again, between Wax Pass and routine, is making up over 75% of our revenue, they don't see waxing as a trade-off with anything else. So they are routinely coming in every, you know, four-ish weeks. They are not going to say, "I'm going to get my nails done this month," or, "I'm going to get a facial this month," or anything else instead of getting wax. This is a priority, and it's something that they will continue to do. So we don't hear as much about the trade-offs. This really does seem in a lot of ways to be a category unto itself that people are evaluating in that box, if you will. That said, of course, we know the reality is that people have all kinds of expenses in their lives.
And so if they really need to do something else, then for that minority of our guest file, they may be trading off.
Okay. The last one, just in terms of approaching males, right, men, you know, we've seen in like the alcohol industry, right, that the growth in hard seltzers was really started with women.
Mm-hmm.
Then women male men following what women were doing, right? You know, it, it ended up being a category that was like 50% male, 50% female, far different than the beer industry. Is the door to, to, to males, their partners, whether they're whether it's a female or a male, and I don't know, Couples' Day or I don't know, you know, like, something like that?
We've talked about that. If you would like a role on our marketing team, no, we've definitely talked about things like that. It certainly is one of the doors in. I would say that the nice thing about this target audience is that there is more than one door. We know that there are entire populations that really are for themselves, just like we say generally that you, you know, you can wax for yourself, not for anybody else. It's all about revealing beautiful skin. That applies to men as well. And so we definitely do seek self-interest. And then yes, all of the time, we hear about partners who would like to be making reservations for men in their lives.
I guess maybe one more quick question. Retail products, we haven't spoken about that at all. It's not a huge part of your business, but it is a nice adjacency. Where are you in terms of how happy are you with the product at this point? What percentage of the business is it, and do you expect it to grow?
The product I'm very happy with. I mean, as I've come in and gotten up to speed on the efficacy of it, the ingredients, the clinical testing that it goes through, it's a. It does not exist elsewhere in the market. And the vision for the portfolio has been and will continue to be what really enhances and extends our services. And so it's meant to really be sold as part of a reservation. Like, your reservation is not really your visit with us is not really over until you have taken care of your in-between visit care needs. And so when you asked about what wax specialists are accountable for, part of that is making sure that they're walking guests to the wall and introducing them to this product and making really specific recommendations about what they need.
We do see that when guests at their first visit buy retail product, they are quite significantly more likely to return because it makes their whole experience better.
In terms of overall contribution to the business, the $1 million AUVs I was referring to, about 6%-7% of that is gonna be retail product. The balance will be services. Now, our best retailers in the network are pushing 15%, 20% of their sales in terms of retail product. I think we have opportunity to drive more retail product to the system.
Great. Well, thank you both for being here today.
Thank you so much.
I appreciate your time.
Thank you for hosting us.