Financial Data and Key Metrics Changes - North America run rate average unit volumes (AUV) increased 8% to $631,000 in Q3 2024 from $585,000 in the prior year period, driven by sales growth at scaled brands [26] - System-wide sales in North America reached $431.2 million, up 21% year-over-year, with a 5% same-store sales increase [29] - Consolidated revenue for the quarter was $80.5 million, slightly up from $80.4 million in the prior year [29] - Adjusted EBITDA was $31 million, up 17% compared to $26.5 million in the prior year, with an adjusted EBITDA margin expanding to 38% [46] Business Line Data and Key Metrics Changes - Franchise revenue increased 22% year-over-year to $44.5 million, driven by a larger base of operating studios and higher royalties [31] - Equipment revenue rose 17% year-over-year to $14.7 million due to a higher volume of equipment installations [32] - Merchandise revenue decreased 23% year-over-year to $6.5 million as the company focused on reducing inventory levels [33] - Franchise marketing fund revenue increased 23% year-over-year to $8.6 million, reflecting growth in system-wide sales [34] Market Data and Key Metrics Changes - The company ended Q3 with 3,178 global open studios, having opened 125 new studios during the quarter [27] - 84 licenses were sold globally in Q3, with over 1,700 licenses sold and contractually obligated to open in North America [28] Company Strategy and Development Direction - The company aims to become the franchiseur of choice in health and wellness, focusing on improving the franchisee experience and operational efficiency [13][14] - Plans include enhancing member experience through technology improvements and data-driven decision-making [15][16] - The company is prioritizing international expansion, particularly in markets like Japan and Mexico, where there is significant growth potential [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges related to infrastructure and processes due to rapid growth, emphasizing the need for sustainable, profitable growth [10] - The company expects to see a decrease in studio closures as management effectiveness improves and the strategy shift from 2023 takes effect [79] - Guidance for 2024 includes a projected 22% increase in North America system-wide sales, with total revenue expected to be between $310 million to $320 million [50] Other Important Information - The company recorded a net loss of $18 million in Q3, compared to a net loss of $5.2 million in the prior year [43] - Total long-term debt increased to $353.8 million as of September 30, 2024, primarily due to additional debt drawn for lease termination payments [48] Q&A Session Summary Question: Factors for potential divestitures of certain concepts - Management indicated that all brands are strategically liked, and evaluations will focus on franchisee profitability and momentum before considering divestitures [56] Question: Focus on Japan for international expansion - Japan was highlighted due to positive momentum and strong franchise partnerships, with other markets like Singapore and New Zealand also performing well [58][60] Question: Consistency of execution across brands - Management is working on standardizing execution across brands and creating operational playbooks to improve consistency [62][64] Question: Infrastructure and processes for growth - Management believes that improving infrastructure does not require significant spending but rather a focus on discipline and efficiency [69] Question: Expectations for studio closures - Management expects Q4 closures to be in line or lower than Q3, with a goal of reducing closure rates to 1% to 2% in 2025 [79][80] Question: Revenue guidance for Q4 - Management reiterated that Q4 is expected to show sequential revenue growth, supported by new studio openings and franchisee conference revenues [83]

Xponential Fitness (XPOF) reported $80.49 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 0.1%. EPS of -$0.04 for the same period compares to $0.53 a year ago.The reported revenue represents a surprise of +4.74% over the Zacks Consensus Estimate of $76.85 million. With the consensus EPS estimate being $0.18, the EPS surprise was -122.22%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations ...

Xponential Fitness (XPOF) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of $0.18. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -122.22%. A quarter ago, it was expected that this franchisor of boutique fitness brands would post earnings of $0.19 per share when it actually produced a loss of $0.03, delivering a surprise of -115.79%.Over the last four q ...

Financial Performance - System-wide sales reached $431.2 million in Q3 2024, an increase of 21% year-over-year[1] - The company reported a net loss of $18.0 million, or a loss of $0.29 per basic share, compared to a net loss of $5.2 million in the prior year[3] - Adjusted net loss for Q3 2024 was $0.2 million, or a loss of $0.04 per basic share, compared to adjusted net income of $6.0 million in the prior year[6] - Adjusted EBITDA for Q3 2024 was $31.0 million, up 17% from $26.5 million in the prior year[7] - Total revenue for the three months ended September 30, 2024, was $80,491,000, slightly up from $80,435,000 in the same period last year, representing a 0.07% increase[19] - Franchise revenue increased to $44,458,000 for the three months ended September 30, 2024, compared to $36,425,000 in the prior year, marking a 22.8% growth[19] - Net income for the three months ended September 30, 2024, was $(17,970) million, compared to $(5,183) million for the same period in 2023, indicating a significant decline[23] - Adjusted net income for the nine months ended September 30, 2024, was $9,670 million, down from $11,546 million in the same period of 2023, reflecting a decrease of approximately 16.2%[23] Guidance and Future Plans - The company is reiterating 2024 guidance for North America system-wide sales in the range of $1.705 billion to $1.715 billion, reflecting a 22% increase at the midpoint compared to 2023[9] - Revenue guidance for 2024 is set between $310.0 million and $320.0 million, indicating a decrease of 1% at the midpoint compared to 2023[9] - The company plans to open between 490 to 510 new studios in 2024, a decrease of 10% at the midpoint compared to 2023[9] Cash and Debt Management - As of September 30, 2024, the company had approximately $37.8 million in cash and $353.8 million in total long-term debt[8] - Total current assets decreased to $95,576,000 as of September 30, 2024, down from $97,248,000 at the end of 2023, reflecting a 1.73% decline[18] - Total liabilities decreased to $595,513,000 as of September 30, 2024, compared to $616,832,000 at the end of 2023, indicating a 3.45% reduction[18] - Cash and cash equivalents increased to $37,774,000 as of September 30, 2024, from $37,094,000 at the end of 2023, showing a 1.83% increase[18] - Long-term debt, net of current portion, increased to $342,038,000 as of September 30, 2024, from $319,261,000 at the end of 2023, reflecting a 7.13% increase[18] - The company’s accumulated deficit increased to $(654,095,000) as of September 30, 2024, compared to $(630,127,000) at the end of 2023, indicating a worsening of 3.8%[18] Operating Costs and Expenses - Operating costs and expenses for the three months ended September 30, 2024, totaled $86,917,000, up from $72,957,000 in the prior year, representing a 19.1% increase[19] - The company reported an impairment of goodwill and other assets of $4,502,000 for the three months ended September 30, 2024, compared to $4,671,000 in the same period last year[19] - The company incurred litigation expenses of $10,435 thousand for the three months ended September 30, 2024, compared to $1,511 thousand in the same period of 2023, representing a significant increase[22] Shareholder Information - The weighted average shares of Class A common stock outstanding for the three months ended September 30, 2024, was 32,177 thousand, compared to 32,260 thousand in the same period of 2023[21] - The weighted average shares of Class A common stock outstanding (diluted) for the three months ended September 30, 2024, was 32,177, compared to 56,811 in the prior year, indicating a significant reduction in share count[23] Sales and Performance Metrics - Quarterly average unit volume (AUV) was $631,000, growing 8% year-over-year, with total members increasing by 16% to 827,000[1] - System-wide sales growth is driven by new studio openings and increases in same store sales, with management reviewing these metrics weekly to assess performance[24] - Same store sales are measured for studios that have generated at least 13 months of consecutive positive sales, highlighting the performance of existing studios[26] - The company receives approximately 7% and 2% of franchisee sales as royalty and marketing fund revenue, respectively, which are critical for evaluating overall performance[24] Other Financial Activities - Total cash used in investing activities for the nine months ended September 30, 2024, was $13,934 thousand, compared to $8,595 thousand in the same period of 2023, indicating an increase of 62.5%[20] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $10,915 thousand, down from $38,194 thousand in the prior year, representing a decrease of approximately 71.4%[20] - Depreciation and amortization expenses for the nine months ended September 30, 2024, totaled $13,179 thousand, up from $12,701 thousand in the prior year, an increase of approximately 3.8%[20] - The company reported a bad debt expense of $2,270 thousand for the nine months ended September 30, 2024, compared to $850 thousand in the same period of 2023, indicating a rise of 167.1%[20] - Acquisition and transaction expenses for the three months ended September 30, 2024, were $3,664 million, compared to $(1,923) million in the prior year, showing a substantial increase in costs[23]

Group 1 - Moore Law, PLLC is investigating potential claims against Xponential Fitness, Inc. due to allegations of misleading investors and financial mismanagement [1] - A report by short-seller Fuzzy Panda indicated that over 50% of Xponential's studios do not achieve positive financial returns and that more than 100 franchises were listed for sale at prices at least 75% lower than their initial costs [1] - Following the publication of the Fuzzy Panda report, Xponential's stock price dropped over 37%, from $25.11 to $15.72, a decline of $9.39 per share [2] Group 2 - An article by Businessweek reported that Xponential misled franchisees, leading to significant financial difficulties, which resulted in a further stock price decline of over 26% over two trading days [2] - The investigation by Moore Law is aimed at holding Xponential's officers and directors accountable for potential breaches of fiduciary duty and corporate misconduct [3]

For the quarter ended June 2024, Xponential Fitness (XPOF) reported revenue of $76.52 million, down 1.1% over the same period last year. EPS came in at -$0.03, compared to $0.07 in the year-ago quarter. The reported revenue represents a surprise of -8.84% over the Zacks Consensus Estimate of $83.93 million. With the consensus EPS estimate being $0.19, the EPS surprise was -115.79%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wal ...

Financial Data and Key Metrics Changes - North America run rate average unit volumes (AUVs) increased to $638,000 in Q2 2024, up 10% from $581,000 in the prior-year period [13] - Consolidated revenue for Q2 was $76.5 million, down 1% year-over-year, primarily due to declines in equipment and merchandise revenues [17] - The company recorded a net loss of $13.7 million in Q2 2024, compared to a net income of $27.5 million in the prior-year period [25] Business Line Data and Key Metrics Changes - Franchise revenue increased to $43 million, up 22% year-over-year, driven by higher royalties from increased system-wide sales [18] - Equipment revenue decreased to $12.9 million, down 10% year-over-year, attributed to a higher proportion of installations in less equipment-intensive brands [19] - Merchandise revenue fell to $5.9 million, down 30% year-over-year, due to a slowdown in retail purchases by members [19] Market Data and Key Metrics Changes - North America system-wide sales reached $421.5 million, up 24% year-over-year, with a 7% same-store sales increase [16] - The company ended Q2 with 3,102 global open studios, having opened 108 new studios during the quarter [15] - The company sold 87 licenses globally in Q2, trending lower due to approval delays and regulatory scrutiny [16] Company Strategy and Development Direction - The company will focus on growing its existing portfolio of brands rather than pursuing additional acquisitions [9] - The core focus will be on ensuring the health and profitability of franchisees, which is seen as the greatest determinant of future success [10] - The company plans to refine its operational processes to better support franchisees and improve overall efficiency [34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term disruptions due to leadership changes and regulatory issues, impacting Q2 results and guidance [12] - Despite these challenges, management expressed confidence that these issues would not significantly affect long-term goals [11] - The company expects to see a normalization of same-store sales in the mid to high-single digits for the remainder of the year [49] Other Important Information - The company is winding down the AKT brand, which had eight open studios and was not a significant contributor to revenue [14] - Adjusted EBITDA for Q2 was $25.4 million, slightly up from $25.3 million in the prior-year period, with a margin of approximately 33% [27] - The company anticipates total revenue for 2024 to be between $310 million to $320 million, down from previous guidance [30] Q&A Session Summary Question: What fine-tuning opportunities do you see at Xponential? - Management noted the need for improved internal processes and better communication with franchisees to enhance operational efficiency [34] Question: What are the short-term disruptions affecting the business? - Management indicated a 90-day delay in expected performance due to leadership changes and consumer impacts [40] Question: How do you view international growth opportunities? - Management sees significant potential for brands like Club Pilates to expand internationally, emphasizing the importance of finding strong master franchise partners [37] Question: What is driving the recent decline in merchandise revenue? - Management attributed the decline to a general softness in consumer spending, which has not yet affected membership growth [19][53] Question: What is the outlook for studio openings? - Management expects a total of approximately 300 new studio openings in the second half of the year, with delays primarily due to distractions in Q2 [48] Question: How will pricing strategies affect future revenue? - Management plans to maintain current pricing strategies, with most price increases coming from new members rather than existing ones [68]

Xponential Fitness (XPOF) came out with a quarterly loss of $0.03 per share versus the Zacks Consensus Estimate of $0.19. This compares to earnings of $0.07 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -115.79%. A quarter ago, it was expected that this franchisor of boutique fitness brands would post earnings of $0.18 per share when it actually produced earnings of $0.16, delivering a surprise of -11.11%. Over the last four ...

Revenue Performance - Revenue decreased by 1% to $76.5 million in Q2 2024, down from $77.3 million in Q2 2023[3] - Total revenue for Q2 2024 was $76.5 million, a decrease of 1.1% compared to $77.3 million in Q2 2023[20] - Franchise revenue increased to $43.0 million in Q2 2024, up 22.0% from $35.1 million in Q2 2023[20] Profitability and Loss - Net loss totaled $13.7 million, or a loss of $0.29 per basic share, compared to net income of $27.5 million, or earnings of $1.44 per share in the prior year[4] - Net loss attributable to Xponential Fitness, Inc. was $9.1 million in Q2 2024, compared to a net income of $18.4 million in Q2 2023[20] - Operating loss for Q2 2024 was $2.4 million, a significant decline from an operating income of $36.5 million in Q2 2023[20] - Adjusted net income was $0.7 million, or a loss of $0.03 per basic share, compared to adjusted net income of $4.2 million, or earnings of $0.05 per share[5] - Adjusted net income attributable to Xponential Fitness, Inc. was $710 thousand for Q2 2024, down from $4,208 thousand in Q2 2023[23] - The diluted earnings per share for Q2 2024 was $(0.03), compared to $0.07 in Q2 2023, highlighting a decline in profitability[23] Cash Flow and Debt - The company reported a net cash provided by operating activities of $5.7 million for the six months ended June 30, 2024[7] - The company generated $5,696 thousand in net cash from operating activities for the six months ended June 30, 2024, a decrease of 81.4% from $30,565 thousand in the prior year[21] - Cash used in investing activities totaled $11,761 thousand for the six months ended June 30, 2024, compared to $5,613 thousand in the prior year[21] - The company borrowed $38,701 thousand from long-term debt during the six months ended June 30, 2024, down from $126,100 thousand in the same period of 2023[21] - As of June 30, 2024, the company had approximately $26.0 million in cash and $330.1 million in total long-term debt[7] Asset and Liability Management - Total assets decreased to $475.2 million as of June 30, 2024, from $528.7 million at the end of 2023[19] - Total liabilities decreased to $576.0 million as of June 30, 2024, from $616.8 million at the end of 2023[19] - Goodwill decreased to $163.0 million as of June 30, 2024, from $171.6 million at the end of 2023[19] - The company reported an impairment of goodwill and other assets of $12.1 million in Q2 2024, compared to $7.2 million in Q2 2023[20] - The company incurred an impairment of goodwill and other assets amounting to $12,089 thousand for the six months ended June 30, 2024, up from $7,238 thousand in the prior year[21] Operational Metrics - Quarterly run-rate average unit volume (AUV) was $638,000, a 10% increase year-over-year[1] - System-wide sales growth is driven by new studio openings and increases in same store sales, with franchisees contributing approximately 7% and 2% of sales as royalty and marketing fund revenue, respectively[24] - Same store sales are defined as studios generating positive sales for at least 13 consecutive months, providing insight into existing studio performance[25] - Average Unit Volume (AUV) growth is primarily influenced by same store sales and new studio openings, reflecting studio economics[26] - The company expects gross new studio openings to be in the range of 500 to 520, a decrease of 8% at the midpoint compared to 2023[9] Restructuring and Charges - Restructuring and related charges amounted to $2,325 thousand in Q2 2024, with no charges reported in the same period last year, reflecting ongoing restructuring efforts[23]

An Industry Player's Expected Results Among the stocks in the Zacks Leisure and Recreation Services industry, Marriott Vacations Worldwide (VAC) is soon expected to post earnings of $1.99 per share for the quarter ended June 2024. This estimate indicates a year-over-year change of -9.1%. This quarter's revenue is expected to be $1.22 billion, up 3.3% from the yearago quarter. Over the last 30 days, the consensus EPS estimate for Marriott Vacations Worldwide has been revised 0.1% down to the current level. N ...