Mister Car Wash’s second quarter results fell short of Wall Street’s expectations, with both revenue and non-GAAP profit underperforming analyst forecasts. The market reacted negatively, reflecting investor concern over softer top-line trends, particularly in the retail segment. Management attributed the quarter’s results to unfavorable weather, a more cautious consumer environment, and deliberate investments in repairs and maintenance to support long-term store health. CEO John Lai emphasized the resilience of the company’s Unlimited Wash Club (UWC) subscription base, noting it helped offset weaker retail sales.
Is now the time to buy MCW? Find out in our full research report (it’s free).
Mister Car Wash (MCW) Q2 CY2025 Highlights:
- Revenue: $265.4 million vs analyst estimates of $271.7 million (4.1% year-on-year growth, 2.3% miss)
- Adjusted EPS: $0.11 vs analyst expectations of $0.13 (12.3% miss)
- Adjusted EBITDA: $87.05 million vs analyst estimates of $92.96 million (32.8% margin, 6.4% miss)
- The company reconfirmed its revenue guidance for the full year of $1.05 billion at the midpoint
- EBITDA guidance for the full year is $340 million at the midpoint, below analyst estimates of $342.9 million
- Operating Margin: 20.4%, down from 21.6% in the same quarter last year
- Locations: 522 at quarter end, up from 491 in the same quarter last year
- Same-Store Sales rose 1.2% year on year (2.4% in the same quarter last year)
- Market Capitalization: $1.93 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Mister Car Wash’s Q2 Earnings Call
- Andre Heinbockel (Guggenheim) asked about the balance between promotional and brand-awareness marketing. CEO John Lai said campaigns were blended, targeting both trial and long-term adoption, and that increased marketing spend would be expanded cautiously.
- Justin Kleber (Baird) questioned the stickiness of recent titanium tier sign-ups after promotional offers. CFO Jed Gold expressed confidence in retention, expecting some fallout but overall stickiness based on past trends.
- Chris O'Cull (Stifel) inquired about new unit performance versus underwriting targets. Gold acknowledged some new stores are ramping more slowly due to denser competition, self-cannibalization, and site selection, prompting more data-driven site selection going forward.
- Vicky Liu (Bank of America) asked about the impact of repairs and maintenance investments on store performance. Gold and Lai responded these are ongoing efforts to maintain high uptime and customer experience, with no deferral of necessary work.
- Michael Lasser (UBS) pressed on Mister Car Wash's slightly slower growth than the industry average. Lai explained that industry data include new store spend, and same-store sales comparisons are difficult without competitor benchmarks.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the impact of expanded marketing campaigns on both retail and UWC membership growth, (2) the pace and quality of new store openings as Mister Car Wash focuses on high-return investments, and (3) the evolution of competitive pressures as the industry consolidates and rationalizes. The company’s ability to manage costs and respond to macroeconomic shifts will also be key.
Mister Car Wash currently trades at $6.15, in line with $6.15 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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