Xponential Fitness Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Global Studios: 3,165 open studios, with 67 new openings in Q2 (47 in North America, 20 internationally).

Same-Store Sales: Down 6.8% overall; Club Pilates down 5%.

Revenue: $66.0 million, a decline of 13% year-over-year.

Adjusted EBITDA: $21.9 million, down 22% year-over-year; adjusted EBITDA margin at 33%, down from 37%.

System-Wide Sales: North America system-wide sales of $437 million, flat year-over-year.

Cash Position: Cash and equivalents at $25.0 million, down from $38.7 million year-over-year.

Long-Term Debt: Increased to $522.4 million from $377.8 million year-over-year.

2Strategic Updates and Business Highlights

Leadership Changes: Danielle Parra appointed as President, focusing on franchisee relationships and operational support.

Franchise Growth: Partnership with Spartan Fitness Holdings to open 117 new Club Pilates studios over six years.

Marketing Initiatives: Collaboration with Starbucks to promote Club Pilates, targeting 120,000 employees.

Digital Enhancements: New digital experiences for StretchLab and Club Pilates to improve member navigation and lead conversion.

Franchisee Support: Enhanced engagement with franchise operators to optimize membership conversion and studio performance.

3Forward Guidance and Outlook

Revised Guidance:

Full-year global net new studio openings expected at approximately 150.

North America system-wide sales projected between $1.70 billion and $1.75 billion.

Total revenue forecasted between $250 million and $260 million.

Adjusted EBITDA expected to range from $91 million to $97 million.

Cautious Assumptions: Continued pressure on same-store sales and merchandise revenue anticipated for the second half of the year.

4Bad News, Challenges, or Points of Concern

Same-Store Sales Decline: Continued negative trends in same-store sales, particularly for Club Pilates, which may impact franchisee sentiment and investment.

Merchandise Revenue Issues: Decline in merchandise revenue due to challenges with the new outsourced logistics partner, impacting profitability.

Legal and Settlement Costs: Significant legal expenses and settlements have pressured cash flow, with $40 million in legal costs affecting this year’s performance.

Operational Challenges: Transition to new merchandise model has created execution issues, slowing revenue recovery.

5Notable Q&A Insights

Comp Trends: Management indicated that modestly positive same-store sales would be acceptable, given the focus on studio openings and AUV.

SG&A Management: Discussion on separating recurring and non-recurring SG&A expenses, with progress noted in managing ongoing costs despite elevated legal expenses.

Franchisee Attraction: Emphasis on long-term franchisee economics and the durability of the Club Pilates model to attract new investments, despite current same-store sales pressures.

Merchandise Recovery: Management is optimistic about resolving issues with merchandise revenue and expects improvements in the second half of the year. Overall, while Xponential Fitness is focused on strategic growth and operational improvements, it faces significant challenges in same-store sales performance and merchandise revenue, necessitating cautious guidance for the remainder of the year.