26 Aug 2021
Xponential shares dip in spite of strong growth
BY Tom Walker
Xponential Fitness is closing in on having 2,000 studios in North America, after opening 59 new studios and selling 197 franchise licensing between 1 April and 30 June 2021.
The boutique fitness giant now has a total of 1,824 studios (as of 30 June, 2021) across North America, up from 1,765 total studios at the end of Q1 on 31 March 2021.
Reporting its financial results for Q2, the company saw revenues grow by 67 per cent, when compared to the pandemic-hit Q2 2020. System-wide sales reached US$171.6m, an increase of 179 per cent on 2020, when most of its studios were shut due to COVID-19 lockdowns.
While Xponential seems to be recovering at a fast pace – CEO Anthony Geisler said the business recorded its highest-ever monthly system-wide sales in July – it hasn't all been plain sailing.
The company completed its initial public offering (IPO) in July, but its share price has under-performed ever since.
Its opening share price of US$11.20 was below the estimated US$14 to US$16 range and the price has since struggled to consistently break the US$12 mark.
The upbeat Q2 results have failed to lift the price too and, as of 26 August, the shares are hovering at around US$11.10 a piece.
Xponential's results are, however, the latest sign that the health club industry is bouncing back from the pandemic lockdowns, as consumer demand returns for in-facility fitness services.
Anthony Geisler, CEO, said: "I’m extremely pleased with our second quarter 2021 financial result.
“As is evident from our solid year-over-year revenue growth and the sale of 197 North American franchisee licenses in Q2, our business has rapidly rebounded to pre-pandemic levels and importantly, as of today’s date, is showing no signs of slowing down in the third quarter.
"When comparing the end of the second quarter of 2021 to 31 January, 2020, even without taking into account our newest brand, Rumble, our business had recovered to 103 per cent of actively paying members, 98 per cent of total visits and a nearly 90 per cent run-rate AUV.
"Thus far in Q3, this positive trajectory has continued. In July, we recorded our highest-ever monthly system-wide sales, and our August results to-date remain solid.
"So far in August, compared to the end of Q2, we’ve seen an increase in our total memberships and our actively paying members, both overall and at a per studio level.
"Today, we are the largest boutique fitness franchisor in the United States and have over 1,850 studios operating globally across nine leading boutique fitness brands.
"Looking ahead, we are confident in our ability to continue expanding our market share in the large and growing boutique fitness industry as we unlock the incredible power of the Xponential platform.”
Xponential's portfolio of boutique fitness brands includes Rumble, Pure Barre, Club Pilates, CycleBar, YogaSix, StretchLab, Row House, AKT, and STRIDE.
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