Xponential Fitness, Inc. has recently released its 10-Q report, providing a comprehensive update on its financial condition and operations. Xponential Fitness operates as a boutique fitness franchisor in North America, offering a diverse platform of nine brands including pilates, indoor cycling, barre, stretching, dancing, boxing, functional training, metabolic health, and yoga services. As of June 30, 2024, the company had 2,660 studios open in North America and franchisees were committed to open an additional 1,810 studios. Internationally, Xponential Fitness had 442 open studios and master franchisees were obligated to sell licenses for an additional 1,048 new studios.
In the 10-Q report, Xponential Fitness discussed the appointment of a new Chief Executive Officer and Director. Mr. Mark King was appointed as the new CEO effective June 17, 2024, following the removal of the former CEO, Mr. Anthony Geisler, on May 10, 2024. Additionally, the report highlighted the acquisition of Lindora Franchise, LLC, a wellness brand, for cash consideration of $8.5 million, with the potential for an additional $1.0 million of contingent consideration based on certain milestones.
The report also detailed divestitures of the Stride and Row House brands, with the company receiving no consideration from the divestitures. Xponential Fitness aims to focus its resources on other brands through these divestitures. Furthermore, the company outlined a restructuring plan initiated in the third quarter of 2023, involving the exit of company-owned transition studios and other measures to reduce costs. The plan is expected to continue throughout 2024, with estimated annualized gross savings of approximately $13.5 million to $15.5 million once completed.
Key performance indicators discussed in the report included the total number of operating studios in North America. As of June 30, 2024, the company had 2,659 franchisee-owned studios and 1 company-owned transition studio.
The report also highlighted factors affecting Xponential Fitness' results of operations, including licensing new qualified franchisees, timing of studio openings, increasing same store sales, international and domestic expansion, and demand and competition for consumer income. These factors play a significant role in the company's revenue growth and long-term prospects. Today the company's shares have moved -22.9% to a price of $13.13. Check out the company's full 10-Q submission here.
