Xponential Fitness (XPOF) Baird 2024 Global Consumer, Technology & Services Conference summary

Leadership transition and organizational updates

• CEO suspended and subsequently resigned following a grand jury subpoena and ongoing investigations tied to short-seller allegations.

• Interim CEO, a long-standing board member, stepped in to stabilize operations and maintain focus.

• Leadership team and brand presidents remain stable, with no expected departures and strong morale.

• Board engaged Spencer Stuart for CEO search, with a robust pipeline of experienced candidates.

• Expectation to appoint a new CEO within 30–60 days, aiming for continuity and process optimization.

Portfolio strategy and brand management

• Portfolio rationalization underway, focusing on core brands driving most system-wide sales and growth.

• Recent divestitures include Stride and Row House; ongoing evaluation of other brands for potential divestiture.

• Acquisition of Lindora expands into wellness, with a TAM of 1,000 units and strong early license sales.

• Centralized back office enables margin expansion and operational efficiency across multiple brands.

• Future strategy includes selective acquisitions and divestitures to optimize growth and brand relevance.

Growth outlook and operational performance

• Targeting approximately 550 new unit openings this year, supported by a healthy pipeline of signed leases.

• License sales remain strong, with new brands like Lindora providing additional growth runway.

• Same-store sales grew 9% in Q1; momentum continued into Q2 with record membership levels.

• Expect same-store sales to normalize to mid- to high-single digits, with 5–6% price contribution.

• Closure rates projected at 3–5% annually, reflecting typical franchise dynamics.