Xponential Fitness, Inc. has recently released its 10-K report, providing a detailed look at the company's financial performance and operations. Xponential Fitness operates as a boutique fitness franchisor, offering a diverse range of fitness services under brands such as Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT. As of December 31, 2024, the company had 2,758 studios open in North America and franchisees were committed to opening an additional 1,607 studios. Internationally, there were 475 open studios, with master franchisees obligated to sell licenses for 1,043 new studios. The company generated revenue outside the United States of $14.0 million in 2024. The report also highlighted the recent executive team transition, the acquisition of Lindora, divestiture of Stride and Row House brands, and the wind down of AKT franchise operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 10-K report highlighted several significant developments. The company experienced an executive team transition, with Mr. Mark King appointed as Chief Executive Officer in June 2024. Additionally, the acquisition of Lindora Franchise, LLC for $8.5 million and the divestiture of the Stride and Row House brands were notable events. The report also mentioned the wind down of AKT franchise operations and the impact of regulatory inquiries on the company’s ability to sell franchises in certain states.
Furthermore, the report discussed a restructuring plan initiated in the third quarter of 2023, aimed at exiting company-owned transition studios and reducing costs to achieve long-term margin goals. The company recognized total restructuring charges of $29.6 million in 2024, primarily for contract termination and other associated costs. The restructuring plan is expected to continue throughout 2025, with estimated annualized savings of approximately $13.5 million to $15.5 million once completed.
The report also highlighted factors affecting the company’s results of operations, including the licensing of new qualified franchisees, timing of studio openings, and the impact of regulatory inquiries on the company's ability to sell franchises. These factors, along with the impact of the risks described in the "Risk Factors" section, were identified as significant influences on the company's performance.
Following these announcements, the company's shares moved -38.4%, and are now trading at a price of $7.46. If you want to know more, read the company's complete 10-K report here.
