MiniLuxe Holding Corp. (TSXV: MNLX) today announced its financial
results for the 13 and 26 weeks ended June 30, 2024 (“Q2 2024” and
“H1 2024”, respectively). The fiscal year of MiniLuxe is a 52-week
reporting cycle ending on the Sunday closest to December 31, which
periodically necessitates a fiscal year of 53 weeks; fiscal years
referred to in this release consist of 52-week periods. Unless
otherwise specified, all amounts are reported in U.S. dollars.
MiniLuxe’s H1 2024 represented record growth
across several dimensions, including record revenue levels on Core
Studios. Compared to the Company’s peak revenue level pre-COVID
(2019), studio average daily revenue reached new peak levels that
are approximately 25% higher than prior to the pandemic.
Additionally, Core Studios revenue for the trailing twelve months
Q2 2024 is outperforming the same period from Q2 2019 by 37%.
MiniLuxe continued its consistent, organic,
year-over-year growth as Q2 2024 revenue increased 9% over Q2 2023
at $6.9M with gross profit of $3.0M, a 12% increase from Q2 2023.
The Company views gross profit dollar growth as a key indicator of
MiniLuxe’s positive trajectory towards long-term profitability and,
in conjunction with the reduced cost base, moved materially to a
narrowing loss rate. Q2 2024 operating loss was ($1.5M),
representing a $1.1M or 43% reduction of loss when compared to Q2
2023. This increased operating efficiency was driven by reduced
general and administrative expenses, while overall fixed cost
leverage gained significant strides. Cost efficiencies coupled with
overall growth of the business brought corporate HQ SG&A from
28% of revenue down to 19% of revenue in the last 12 months.
As in past periods, the majority of the
Company’s growth came organically from the MiniLuxe Core Studios.
The Core Studio base continued its consistent, multi-year trend of
growth in Q2 2024 as revenue increased $0.45M to $6.4M, or 8% over
Q2 2023. MiniLuxe also saw good trends on the demand and supply
side of its business: (a) positive momentum on the demand side (new
client and loyal client growth) and (b) growth and development of
supply side (Talent Ecosystem growth). Some of the other key areas
that demonstrate the strengthening brand resiliency and loyal
demand for MiniLuxe in-studio service offerings include:
- Impact
of loyal client base: MiniLuxe’s loyal
client base continues to grow, with over 10,000 studio clients that
average 10+ visits per year, a 10% increase year-over-year.
MiniLuxe defines its “super fans” as those who have 20 or more
visits per year and have an average annual spend of ~$2,000,
representing in aggregate 25% of MiniLuxe’s total Talent Revenue.
Additionally, general client retention remains strong as
approximately 42% of MiniLuxe’s clients in a given month are repeat
loyal clients from the prior month.
- Attracting, developing and
retaining talent: MiniLuxe’s annual
retention of its hourly worker base has continued its trend of
holding to over 80%. MiniLuxe’s key priority is the continued
growth, development and scaling of the MiniLuxe Talent Ecosystem
(i.e. its team of nail designers and waxing specialists working in
the field). MiniLuxe’s differentiation in attracting, developing
and retaining talent comes from providing a safe and empowering
workplace environment that offers strong training and workforce
development, and highly competitive earnings and earnings
potential. Over 50% of MiniLuxe’s field team members have been with
the company for more than 5 years, and those team members
participate in the company’s equity ownership program.
- Growing studio economics on
a revenue and gross profit basis: The combination of a
growing, loyal client base and the dedication to continuously
improving the quality and staffing of the designer base has
contributed to the consistent, same-store year-over-year growth and
consistent trailing-twelve month (TTM) quarterly growth.
Subsequent Events
As was discussed earlier and as disclosed in the
Company’s Q1 2024 Financial Statements and MD&A, on May 3, 2024
MiniLuxe entered into a majority-controlled joint venture agreement
with an Atlanta-based firm Sugarcoat (the “Sugarcoat JV”), a
regional nail services brand with 5 locations in the Atlanta area.
The Sugarcoat JV, which was ultimately closed subsequent to the end
of Q2 2024, will initially operate an existing Sugarcoat nail
services salon location in Atlanta with intentions to convert into
a MiniLuxe-branded studio while also considering further expansion,
partnership and conversion opportunities.
“The market for nail care and related self-care
services remains as large and robust as ever. Our team seeks to win
in this market by remaining laser-focused on the set of strategic
and executional priorities that can accelerate gross profit and
overall studio contribution. With our strongest unit economics in
our history, this quarter also saw us advancing on our franchise,
M&A, and corporate development initiatives.” said Tony Tjan,
Chief Executive Officer and Co-founder of MiniLuxe.
Q2 & H1 2024 Results
Selected Financial Measures
Results of Operations
The following table outlines the consolidated
statements of loss and comprehensive loss for the thirteen and 26
weeks ended June 30, 2024 and July 2, 2023:
Cash Flows
The following table presents cash and cash
equivalents as at June 30, 2024 and July 2, 2023:
Non-IFRS Measures and Reconciliation of
Non-IFRS Measures
This press release references certain non-IFRS
measures used by management. These measures are not recognized
under International Financial Reporting Standards (“IFRS”), do not
have a standardized meaning prescribed by IFRS, and are therefore
unlikely to be comparable to similar measures presented by other
companies. Rather, these measures are provided as additional
information to complement those IFRS measures by providing further
understanding of the Company’s results of operations from
management’s perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of the
Company’s financial information reported under IFRS. The non-IFRS
measures referred to in this press release are “Adjusted EBITDA”
and “Fleet Adjusted EBITDA”.
Adjusted EBITDAManagement
believes Adjusted EBITDA most accurately reflects the commercial
reality of the Company's operations on an ongoing basis by adding
back non-cash expenses. Additionally, the rent-related adjustments
ensure that studio-related expenses align with revenue generated
over the corresponding time periods.
Adjusted EBITDA is calculated by adding back
fixed asset depreciation, right-of-use asset amortization under
IFRS 16, asset disposal, and share-based compensation expense to
IFRS operating income, then deducting straight-line rent expenses1
net of lease abatements. IFRS operating income is revenue less cost
of sales (gross profit), additionally adjusted for general and
administrative expenses, and depreciation and amortization
expense.
A reconciliation of IFRS operating income to
Adjusted EBITDA is included in Selected Consolidated Financial
Information.
The Company also uses Fleet Adjusted EBITDA to
evaluate the performance of its MiniLuxe Core Studio business (19
MiniLuxe-branded studios operating for 18+ months). This metric is
calculated in a similar manner, starting with Talent revenue and
adjusting for non-fleet Talent revenue and cost of sales, further
adjusted by fleet general and administrative expenses and finally
subtracting straight line rent expense (similar to amount used in
the full company Adjusted EBITDA, less amounts allocated to
locations outside of MiniLuxe’s core studio business, i.e.
Paintbox). The Company believes that this metric most closely
mirrors how management views the fleet portion of the business. A
reconciliation of Talent revenue to Fleet Adjusted EBITDA is
included in Selected Consolidated Financial Information.
The following table reconciles Adjusted EBITDA
to net loss for the periods indicated:
The following table reconciles Fleet Adjusted
EBITDA to net loss for the periods indicated:
About MiniLuxe
MiniLuxe, a Delaware corporation based in
Boston, Massachusetts. MiniLuxe is a lifestyle brand and talent
empowerment platform servicing the beauty and self-care industry.
The Company focuses on delivering high-quality nail care and
esthetic services and offers a suite of trusted proprietary
products that are used in the Company’s owned-and-operated studio
services. For over a decade, MiniLuxe has been elevating industry
standards through healthier, ultra-hygienic services, a modern
design esthetic, socially responsible labor practices, and
better-for-you, cleaner products. MiniLuxe’s aims to radically
transform a highly fragmented and under-regulated self-care and
nail care industry through its brand, standards, and technology
platform that collectively enable better talent and client
experiences. For its clients, MiniLuxe offers best-in-class
self-care services and better-for-you products, and for nail care
and beauty professionals, MiniLuxe seeks to become the employer of
choice. In addition to creating long-term durable economic returns
for our stakeholders, the brand seeks to positively impact and
empower one of the most diverse and largest hourly worker segments
through professional development and certification, economic
mobility, and company ownership opportunities (e.g., equity
participation and future franchise opportunities). Since its
inception, MiniLuxe has performed over 4 million services.
For further information
Christine MastrangeloInvestor Relations, MiniLuxe Holding
Corp.cmastrangelo@MiniLuxe.comMiniLuxe.com
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-looking statements
This press release contains "forward-looking
information" and "forward-looking statements" (collectively,
"forward-looking information") concerning the Company and its
subsidiaries within the meaning of applicable securities laws.
Forward-looking information may relate to the future financial
outlook and anticipated events or results of the Company and may
include information regarding the Company's financial position,
business strategy, growth strategies, acquisition prospects and
plans, addressable markets, budgets, operations, financial results,
taxes, dividend policy, plans and objectives. Particularly,
information regarding the Company's expectations of future results,
performance, achievements, prospects or opportunities or the
markets in which the Company operates is forward-looking
information. In some cases, forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "targets", "expects", "budgets", "scheduled", "estimates",
"outlook", "forecasts", "projects", "prospects", "strategy",
"intends", "anticipates", "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will" occur. In addition, any
statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts but instead represent
management's expectations, estimates and projections regarding
future events or circumstances.
Many factors could cause the Company's actual
results, performance, or achievements to be materially different
from any future results, performance, or achievements that may be
expressed or implied by such forward-looking information,
including, without limitation, those listed in the "Risk Factors"
section of the Company's filing statement dated November 9, 2021.
Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the forward-looking statements prove
incorrect, actual results, performance, or achievements could vary
materially from those expressed or implied by the forward-looking
statements contained in this press release.
Forward-looking information, by its nature, is
based on the Company's opinions, estimates and assumptions in light
of management's experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors that the Company currently believes are appropriate
and reasonable in the circumstances. Those factors should not be
construed as exhaustive. Despite a careful process to prepare and
review forward-looking information, there can be no assurance that
the underlying opinions, estimates and assumptions will prove to be
correct. These factors should be considered carefully, and readers
should not place undue reliance on the forward-looking information.
Although the Company bases its forward-looking information on
assumptions that it believes were reasonable when made, which
include, but are not limited to, assumptions with respect to the
Company's future growth potential, results of operations, future
prospects and opportunities, execution of the Company's business
strategy, there being no material variations in the current tax and
regulatory environments, future levels of indebtedness and current
economic conditions remaining unchanged, the Company cautions
readers that forward-looking statements are not guarantees of
future performance and that our actual results of operations,
financial condition and liquidity, and the development of the
industry in which the Company operates may differ materially from
the forward-looking statements contained in this press release. In
addition, even if the Company's results of operations, financial
condition and liquidity, and the development of the industry in
which it operates are consistent with the forward-looking
information contained in this press release, those results or
developments may not be indicative of results or developments in
subsequent periods.
Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information, which speaks
only as of the date made (or as of the date they are otherwise
stated to be made). Any forward-looking statement that is made in
this press release speaks only as of the date of such
statement.
1 Straight-line rent expense for a given payment period is
calculated by dividing the sum of all payments over the life of the
lease (the figure used in the present value calculation of the
right-of-use asset) by the number of payment periods (typically
months). This number is then annualized by adding the rent expenses
calculated for the payment periods that comprise each fiscal year.
For leases signed mid-year, the total straight-line rent expense
calculation applies the new lease terms only to the payment periods
after the signing of the new lease.
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