Xponential Fitness Q1 revenue falls on shift to outsourced merchandise model

Xponential Fitness

07/05/2026 21:47

Overview

U.S. fitness franchisor's Q1 revenue fell 21% yr/yr, driven by divestitures and lower equipment sales

Adjusted EPS for Q1 missed analyst expectations

Company attributed revenue drop to brand divestitures and shift in merchandise model

Outlook

Company reiterates 2026 outlook for revenue of $260 mln to $270 mln, down 16% at midpoint

Company expects 2026 adjusted EBITDA of $100 mln to $110 mln, down 6% at midpoint

Xponential sees 2026 North America system-wide sales of $1.72 bln to $1.80 bln, up 1% at midpoint

Result Drivers

DIVESTITURES - Co said revenue decline was mainly due to strategic divestitures and removal of divested brands from results

EQUIPMENT AND MERCHANDISE - Fewer equipment installations and shift to outsourced merchandise model led to sharp drops in equipment and merchandise revenue

SAME STORE SALES - Franchise revenue fell due to a decrease in same store sales and impact of brand divestitures

Company press release: ID:nBw4XXsp4a

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Franchise Revenue
$41.15 mln
Q1 Adjusted EPS
Miss
-$0.04
$0.11 (9 Analysts)
Q1 Net Income
-$820,000
Q1 Operating Income
$13.04 mln
Q1 Pretax Profit
-$814,000


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the leisure & recreation peer group is "buy."

Wall Street's median 12-month price target for Xponential Fitness Inc is $7.50, about 13.1% above its May 6 closing price of $6.63

The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)