• Revenue Growth: 7% increase for the full year 2024.
• Adjusted EBITDA Growth: 12% increase for the full year 2024.
• Adjusted Earnings Per Share Growth: 16% increase for the full year 2024.
• Same-Store Sales Growth: 6% increase in Q4 2024.
• New Store Openings: 40 new locations in 2024, surpassing 500 total stores.
• UWC Membership: Over 2.1 million members, a 2% increase year-over-year.
• EBITDA Margin: Increased 100 basis points to 31.2% in Q4 2024.
• Net Income: $31 million in Q4 2024.
• Net Income Per Diluted Share: $0.09 in Q4 2024.
• Cash and Cash Equivalents: $67 million at the end of Q4 2024.
• Long-Term Debt: $920 million, a $22 million sequential decrease.
• Sale-Leaseback Transactions: 21 transactions for $98 million in Q4 2024.
• 2025 Revenue Outlook: $1.38 billion to $1.64 billion.
• 2025 Comparable Store Sales Growth: 1% to 3% expected.
• 2025 Adjusted EBITDA Outlook: $334 million to $346 million.
• 2025 Adjusted Net Income Per Diluted Share: $0.43 to $0.45.
• 2025 Capital Expenditures: $275 million to $305 million.

• Warning! GuruFocus has detected 6 Warning Sign with MCW.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Mister Car Wash Inc (NASDAQ:MCW) reported a strong fourth quarter with comp store sales growth of 6%, marking the seventh consecutive quarter of comp growth.
• The company achieved record revenues and EBITDA for the full year 2024, with sales up 7% and adjusted EBITDA growing by 12%.
• Mister Car Wash Inc (NASDAQ:MCW) successfully opened 40 new locations in 2024, surpassing the 500-store milestone.
• The introduction of the premium Titanium service exceeded expectations, with 23% of UWC membership penetration.
• The company maintained strong cost discipline, resulting in adjusted EBITDA and adjusted net income that exceeded guidance.

Negative Points

• Consumer behavior remains difficult to predict, and the non-subscription business is sensitive to weather, leading to a cautiously optimistic view for retail trends.
• The competitive environment remains crowded, with new entrants expected to continue entering the market, albeit at a slower pace.
• Retail sales are anticipated to face continued headwinds in 2025, with a mid-single-digit decline expected.
• The company is experiencing increased labor rates and higher rent expenses due to new store growth and sale leasebacks.
• Mister Car Wash Inc (NASDAQ:MCW) is cautious about extrapolating current trends due to unpredictable consumer patterns and external factors like inflation.

Q & A Highlights

Q: What percentage of the car wash base are you increasing the base pricing for, and what is the expected price? Also, what is your long-term marketing investment strategy? A: John Lai, CEO, stated that they plan to increase prices in markets where they are underpriced compared to the median market price. They have not finalized the schedule but are confident in passing through the price increase based on positive test results. Regarding marketing, they plan to triple their investments in 2025 compared to the previous year, based on encouraging test results.

Q: Can you explain the difference between the strong Q4 comp growth and the more conservative 1% to 3% comp growth guidance for 2025? A: Jedidiah Gold, CFO, explained that Q4 had a particularly strong October due to favorable weather, which boosted retail volumes. However, they anticipate mid-single-digit declines in retail for 2025, slightly better than 2024 but still cautious due to the unpredictable nature of retail trends.

Q: Is the Titanium membership penetration rate topping out, and what are your expectations for 2025? A: Jedidiah Gold, CFO, noted that while Titanium membership penetration was slightly lower in Q4 compared to Q3, they see opportunities for growth, albeit at a slower rate. They did not build significant upside into the 2025 model but remain optimistic about long-term growth.

Q: How are you approaching M&A given the current market conditions and your leverage position? A: John Lai, CEO, emphasized a disciplined approach to M&A, focusing on quality assets with clear upside potential and reasonable pricing. They are willing to take on additional leverage if there is a clear path to deleveraging through growth.

Q: Are you seeing any changes in consumer attitudes towards car wash subscriptions, and how does this impact your membership growth expectations? A: John Lai, CEO, stated that they have not observed a change in consumer attitudes towards subscriptions. Capture rates remain consistent, indicating continued interest in their membership plans. They expect slight membership growth on a comp store basis and single-digit growth overall, driven by new store openings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.