Xponential Fitness outlook hit by weaker sales, slower studio expansion

Xponential Fitness Inc. (NYSE:XPOF) faces lower UBS forecasts and a $4.50 price target, down from $7, after weaker sales prompted management to cut guidance.

Management's revised guidance puts financial year 2026 revenue at $250 million to $260 million and EBITDA at $91 million to $97 million.

UBS lowered its own second-half revenue estimates by 9% to 10%, cutting EBITDA forecasts to $94 million for financial year 2026 and $84 million for financial year 2027.

Underlying those cuts were weaker second-quarter same-store sales and conditions seen into the third quarter, despite management's earlier expectations of improvement from the first quarter's 6% decline.

Expansion is also slowing, with 150 net studio openings expected, down 25% annually and below UBS's 164 and the Street's 207, amid tougher lease negotiations.

Merchandise sourcing and execution have also suffered during a difficult transition to a third-party logistics partner, with management expecting merchandise revenue pressure throughout the second half.

Despite these setbacks, management cited roughly 8% fitness market growth and rising participation among younger consumers, with under-25s accounting for 31% of US fitness memberships, versus 10% in 2015.

In the near term, Xponential expects $11.4 million in additional legal settlement payments in the second half, tied to the previously disclosed franchisee lawsuit and FTC matters.

The shares traded at $3.71, down 3%, on Wednesday afternoon.