Xponential Fitness Plunges on Q2 Earnings Miss

Xponential Fitness reported a difficult second quarter for fiscal year 2026, citing a challenging consumer environment and pressure on customer acquisition. The company experienced a double-digit decline in revenue and a compression in profit margins.

Management highlighted weaker same-store sales, with Club Pilates showing particularly concerning results. Challenges in transitioning merchandise and increased marketing expenditures also impacted profitability. Elevated legal expenses and the shift to an outsourced merchandise model further contributed to the underperformance, with improvements occurring slower than initially projected.

The company's second-quarter revenue reached $65.97 million, a 13.4% year-on-year decrease, though it narrowly beat analyst estimates. However, adjusted earnings per share (EPS) missed expectations significantly, dropping to $0.02 from an expected $0.13. Adjusted EBITDA also fell short, coming in at $21.94 million against an estimate of $26.29 million.

Looking ahead, Xponential Fitness revised its full-year EBITDA guidance midpoint to $94 million, which is below the consensus estimate of $103.5 million. The operating margin also decreased to 14.4% from 19.5% in the prior year's quarter. The company's market capitalization stood at $207.7 million.