Xponential Fitness Cuts Guidance Amid Sale Review

Xponential Fitness cut its full-year revenue guidance and posted a second-quarter net loss on Thursday, sending shares down more than 12% in after-hours trading. Executives declined to discuss the strategic review that could end in a sale of the boutique fitness franchisor, the parent of Club Pilates, Pure Barre, StretchLab, YogaSix and Body Fit Training.

A Weaker Quarter Across the Portfolio

Revenue fell 13% year over year to $66 million, and Xponential lowered its full-year guidance to a range of $250 million to $260 million from a prior $260 million to $270 million. Same-store sales dropped 6.8% across the portfolio and 5% at Club Pilates, the brand that generates most of the company's revenue. Management now expects to open about 150 studios this year, down from a prior range of 150 to 170 and well below the 201 openings in 2025.

Legal Bills Weigh on the Turnaround

CEO Mike Nuzzo, who took over last August, has spent much of his first year clearing legal trouble rather than chasing growth. The company settled three cases this year worth more than $43 million combined: a $17 million FTC settlement, a $22.75 million payout to more than 500 franchisees, and a $3.9 million agreement with New York over claims it misled prospective owners about how long studios take to open. Interim finance chief Robert Julian said those costs, which have run close to $100 million over several years, are largely behind the company now.

Why Franchisees Should Watch the Sale Talk

Xponential hired Jefferies in April to weigh a sale or merger after pressure from shareholders Voss Capital and Kanen Wealth Management, who argue Club Pilates alone is worth more than the entire company. For Club Pilates operators, a breakup or sale could bring a new owner, a different royalty structure, or sharper focus on the brand that has carried the portfolio through a difficult year. Nuzzo has already reset expectations for the brand, telling investors that flat to modestly positive same-store sales now count as a good result, a marked shift from the double-digit comps Club Pilates once produced routinely.