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    XPOF
    Earnings call· Jun 2026(Q2 FY26)

    Xponential Fitness Q2 FY26 earnings call XPOF

    Aug 6, 2026 Source

    Executive summary

    Xponential Fitness Q2 FY26 — Guidance Lowered Amidst Same-Store Sales Pressure and Merchandise Challenges

    Xponential Fitness is focusing on optimizing its business, driving organic growth, and improving franchisee economics amidst a challenging consumer environment. The company is implementing initiatives to enhance digital experiences and support franchisees, while also actively exploring strategic alternatives to maximize shareholder value. Despite headwinds in same-store sales and merchandise, the long-term unit growth runway remains charted.

    Highlights

    4

    • Global open studios reached 3,165, with 16 domestic and 12 international net unit growth in Q2.

    • International studios surpassed 500, including Club Pilates opening its 200th international studio in June.

    • Total company member retention improved by 28 basis points year over year.

    • Secured a partnership with Spartan Fitness Holdings to open 117 Club Pilates studios across multiple states over six years.

    Concerns

    5

    • Q2 same-store studio sales were down 6.8% overall and 5% for Club Pilates, remaining below expectations.

    • Consolidated revenue for the quarter was $66.0 million, down 13% or $10.2 million year over year.

    • Merchandise revenue declined $5.1 million, impacted by a new outsourced model and execution challenges.

    • Adjusted EBITDA was $21.9 million, down 22% or $6.2 million compared to Q2 2025, with margin at 33%.

    • Full-year guidance was lowered primarily due to Q2 performance and anticipated continued pressure on same-store sales and merchandise revenue.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year global net new studio openings
    approximately 150
    high materiality
    Medium
    North America system-wide sales
    $1.70 billion to $1.75 billion
    high materiality
    Medium
    Total revenue
    $250 million to $260 million
    high materiality
    Medium
    Adjusted EBITDA
    $91 million to $97 million
    high materiality
    Medium
    Adjusted EBITDA margin
    36.9%
    medium materiality
    Medium

    Operational metrics

    27
    Net unit growth
    16
    Q2 FY26
    Net unit growth
    12
    Q2 FY26
    Net unit growth
    39
    YTD FY26
    Net unit growth
    29
    YTD FY26
    Total open studios
    3,165
    Q2 FY26
    Gross new studios opened
    67
    Q2 FY26
    Gross new studios opened
    47
    Q2 FY26
    Gross new studios opened
    20
    Q2 FY26
    Global studio closures
    39
    Q2 FY26

    In line with historic trends.

    Licenses sold
    53
    Q2 FY26
    Licenses sold
    43
    Q2 FY26
    Licenses sold
    10
    Q2 FY26
    North America system-wide sales
    $437 millionflat year over year
    Q2 FY26

    Growth from net new studio openings was offset by same-store sales decline.

    Revenue
    $66.0 milliondown 13% ($10.2 million)
    Q2 FY26

    Consolidated revenue.

    Equipment revenue decline
    $2.5 millionyear over year decline
    Q2 FY26

    Related to new studio openings timing and installation schedules.

    Merchandise revenue decline
    $5.1 millioncompared to prior year
    Q2 FY26

    Partially due to new outsourced merchandise model (recording commission only) and execution challenges.

    Franchise revenue decline
    $1.4 millionversus prior year
    Q2 FY26

    Primarily due to decrease in same-store sales and brand divestitures in 2025.

    Marketing fund and other services revenue shortfall
    $1.4 million
    Q2 FY26
    Adjusted EBITDA
    $21.9 milliondown 22% ($6.2 million)
    Q2 FY26

    Below internal forecast primarily due to lower merchandise contribution and higher marketing investment.

    Adjusted EBITDA margin
    33%down from 37% in prior year
    Q2 FY26
    Cash, cash equivalents and restricted cash
    $25.0 milliondown from $38.7 million as of June 30, 2025
    as of June 30, 2026
    Payments related to settlements
    $6.8 million
    Q2 FY26
    Anticipated additional payments for settlements
    $11.4 million
    remainder of FY26
    Total long-term debt
    $522.4 millioncompared to $377.8 million as of June 30, 2025
    as of June 30, 2026

    Increase primarily due to retiring convertible preferred security in Q4 2025.

    Total company member retention
    increased 28 basis pointsyear over year
    Q2 FY26
    Organic leads
    year-over-year declines
    Q2 FY26

    Partially offset by increases in paid media leads.

    Paid media leads
    year-over-year increases
    Q2 FY26

    Helped partially offset year-over-year declines in organic leads.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps-6.8%%
    Global system wide sales$437 millionUSD
    Net unit growth development pipelineapproximately 150units

    Orderbook & backlog

    2
    Licenses contractually obligated to openmore than 690June 30, 2026
    International master franchise obligations730June 30, 2026

    Product announcements

    2
    ProductTypeDetails
    StretchLab digital experiencelaunch
    Club Pilates website redesignlaunch

    Deals & partnerships

    2
    Spartan Fitness HoldingsPartnership with largest Club Pilates franchisee to open new studios.over the next six years

    Partnership driven by continued demand for Pilates, a key element of long-term growth and emphasizes the strength of the Club Pilates brand.

    StarbucksCollaboration on the launch of Starbucks protein coffee drinks.

    Strong example of consumer brand collaboration to introduce more people to Xponential brands.

    Risks & headwinds

    6
    Same-store studio sales declineQ2 FY26

    down 6.8% overall, down 5% for Club Pilates

    Mitigation: Implementing digital experience improvements, expanding remodel program, coaching studios on lead-to-membership conversion, AI SEO resources, AI-enabled CRM tools.

    Challenging consumer environmentQ2 FY26 and heading into summer months

    more selective spending, higher promotional activity, pressure on new customer acquisition

    Mitigation: Focusing on initiatives within company control, such as digital enhancements and franchisee support.

    Merchandise transition challengesQ2 FY26 and slower pace of improvement than anticipated

    negatively impacted results; merchandise revenue declined $5.1 million

    Mitigation: Supply chain team working closely with vendor on process fixes and evaluating additional ways to improve reliability and performance.

    Elevated paid media and digital spendsecond half of the year

    level of elevated spend

    Mitigation: To help bridge to expected improvement in organic lead performance later in the year.

    Legal expenses and settlementsremainder of FY26

    approximately $11.4 million of additional payments

    Mitigation: Payments are scheduled, and the company expects cash flow to be positive in 2027 as these expenses moderate.

    Organic lead trends pressureQ2 FY26

    year-over-year declines

    Mitigation: Actively responding with dedicated AI SEO resources, technology tools to optimize organic lead flow, and updated website experiences across brands.

    What to watch in Q3 FY26

    5

    Same-store sales trend

    Q3/Q4 FY26
    Current-6.5% (H1 average)
    TargetCloser to flat or modestly positive

    Why it matters

    Sustained improvement in same-store sales is critical for overall revenue growth and franchisee economics, and will validate the effectiveness of current initiatives.

    But until you see it, we aren't going to build the financial structure around it. So I appreciate Robert's thoughtfulness around the guidance there.

    Q&A highlights

    5

    How will the company reverse the Club Pilates comp trend, and what comp number would alleviate P&L pressure, considering AUVs and studio expansion?

    Management is pleased with Club Pilates' new studio openings and strong AUVs, driven by pre-sale processes. They are focused on improving organic leads and the website experience. While historically double-digit, a modest positive to flat comp would be good, especially with continued studio expansion. The current P&L pressure is more from merchandise and equipment sales, which are considered transitory.

    “This is a business that has historically done double digit comps, um, Going forward, we don't need double-digit comps. Anything from a modest positive to even flat would be really good.”

    asked by John Hunter Buchholz · answered by Michael Nuzzo

    2 min read6 chapters

    Detailed Narrative

    01

    Leadership and Strategic Focus

    The company has assembled a leadership team focused on optimizing the business, driving organic growth, improving franchisee economics, and enhancing the member experience. Danielle Parra was welcomed as President, bringing extensive franchise experience to strengthen franchisee relationships, accelerate studio expansion, and improve brand positioning. The objective is to build a healthier, more productive franchise system for sustainable membership growth and long-term value creation.

    02

    Brand Engagement and Partnerships

    Xponential Fitness continues to leverage brand affinity and community engagement. The Pure Bar 25th anniversary event generated over 1.8 million social media views, reinforcing brand strength. A new collaboration between Club Pilates and Starbucks protein coffee drinks provides access to approximately 120,000 Starbucks and Pepsi employees, aiming to introduce more people to the brands through consumer brand collaborations.

    03

    Operational Initiatives for Growth

    Key initiatives are underway to improve execution and drive growth, focusing on strengthening the top of the funnel, enhancing the digital journey, and improving franchisee support. This includes implementing new digital experiences for StretchLab and Club Pilates websites, expanding the Club Pilates remodel program, and coaching studios on lead-to-membership conversion using data tools. The company is also piloting AI-enabled CRM tools with franchisees.

    04

    Merchandise and Supply Chain Challenges

    The transition to an outsourced logistics partner for merchandise has created initial challenges in vendor operations, sourcing, and execution, negatively impacting results. The supply chain team is actively working with the vendor on process fixes and evaluating additional improvements. While merchandise is a smaller contributor, the goal is to return it to a normal run rate to support profitability for both the company and franchisees.

    05

    Strategic Alternatives Review

    The Board of Directors initiated a review of strategic alternatives in April to maximize shareholder value, led by independent directors and supported by Jefferies as financial advisor. This process may include a sale of the company, a merger, or another strategic or financial transaction. The board remains actively engaged, but no further comments will be made until the process concludes.

    06

    Legal Settlements and Balance Sheet

    The company has made significant progress in resolving regulatory matters, including payments of $6.8 million in Q2 related to franchisee lawsuit, FTC, and New York Attorney General cases. An additional $11.4 million in payments is anticipated for the remainder of the year for these settlements. The franchise disclosure documents have been substantially refreshed, and the company expects cash flow to be positive in 2027 as legal expenses moderate.

    AI-generated summary of the company’s earnings call. Not investment advice.