Xponential Fitness Inc (XPOF) Q2 2024 Earnings Call Highlights: Navigating Growth Amidst Challenges

GuruFocus News
4 min read

In This Article:

  • North America Run Rate Average Unit Volumes (AUVs): $638,000, up 10% from $581,000 in the prior-year period.

  • Global Open Studios: 3,102, with 108 new studios opened during Q2 and 85 closures.

  • North America System-Wide Sales: $421.5 million, up 24% year-over-year.

  • Same-Store Sales Increase: 7% within the existing base of open studios.

  • Consolidated Revenue: $76.5 million, down 1% year-over-year.

  • Franchise Revenue: $43 million, up 22% year-over-year.

  • Equipment Revenue: $12.9 million, down 10% year-over-year.

  • Merchandise Revenue: $5.9 million, down 30% year-over-year.

  • Adjusted EBITDA: $25.4 million, flat compared to the prior-year period.

  • Net Loss: $13.7 million, or $0.29 per basic share.

  • Adjusted Net Income: $0.7 million, resulting in an adjusted net loss of $0.03 per basic share.

  • Cash, Cash Equivalents, and Restricted Cash: $26 million as of June 30, 2024.

  • Total Long-Term Debt: $330.1 million as of June 30, 2024.

  • 2024 Revenue Guidance: $310 million to $320 million, down from previous guidance.

  • 2024 Adjusted EBITDA Guidance: $120 million to $124 million, down from previous guidance.

Release Date: August 01, 2024

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

Positive Points

  • Xponential Fitness Inc (NYSE:XPOF) reported a 10% increase in North America run rate average unit volumes, reaching $638,000 in the second quarter.

  • The company achieved a 24% year-over-year increase in North America system-wide sales, driven by a 7% same-store sales increase and new studio openings.

  • Adjusted EBITDA for the second quarter was $25.4 million, maintaining a 33% margin, indicating strong operational efficiency.

  • Xponential Fitness Inc (NYSE:XPOF) has a backlog of over 1,800 licenses sold in North America and over 1,000 internationally, representing over 5 years of future studio openings.

  • The company executed a new master franchise agreement for its BFT brand in Scandinavia, with plans to open 30 studios over the next 10 years.

Negative Points

  • Xponential Fitness Inc (NYSE:XPOF) faced short-term disruptions due to leadership changes and regulatory uncertainties, impacting their second quarter results.

  • The company reported a net loss of $13.7 million in the second quarter, compared to a net income of $27.5 million in the prior-year period.

  • Merchandise revenue decreased by 30% year-over-year, attributed to a slowdown in retail purchases by members at the studio level.

  • The company announced the winding down of its AKT brand, which will be completed in the third quarter, indicating challenges in brand performance.

  • Total 2024 revenue guidance was adjusted down to $310 million to $320 million, from the previous $340 million to $350 million, reflecting a 1% year-over-year decrease at the midpoint.

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