Xponential Fitness Cuts Its Annual Forecast

The Tip Desk · October 18, 2026 · 3 min read

The boutique fitness franchisor lowered its 2026 adjusted EBITDA guidance to $91.0 million to $97.0 million.

Xponential Fitness, Inc. (XPOF), the boutique health and wellness franchisor, cut its annual forecast after North American studio sales stopped growing in the second quarter and declines at existing locations deepened. Chief Executive Mike Nuzzo said results fell below expectations, while the company continued opening studios and providing elevated franchisee studio support.

North America system-wide sales were $437.3 million, flat year over year after 2% growth in the first quarter. Same-store sales deteriorated further, falling 6.8% against a 6% decline in the preceding quarter. The operating picture weakened even though the decline in the company's reported revenue eased.

Xponential opened 67 gross new studios and sold 53 franchise licenses during the quarter. North America's quarterly run-rate average unit volume was $659,000. The company presented its operating metrics using the brands it owned at June 30, including their historical results and excluding divested brands. System-wide sales included franchisees' sales, rather than revenue booked by Xponential itself.

Revenue totaled $66.0 million, with its year-over-year decline narrowing to 13% from 21% in the first quarter. The company attributed the second-quarter revenue decrease primarily to fewer equipment installations and lower merchandise revenue following its transition to outsourced logistics. That revenue trajectory differed from the further deterioration in sales at established North American studios.

Franchise revenue, the largest revenue stream, was $44.0 million. Xponential attributed its decline to weaker same-store sales and brand divestitures completed in 2025. Equipment revenue was $7.1 million; the company said fewer global equipment installations resulted from fewer studio openings and lower franchise license sales. Those explanations tied the two revenue streams to different parts of its franchise operations.

Merchandise revenue was $0.5 million. The company attributed the decrease to its switch from an in-house wholesale model to an outsourced retail model, along with transition challenges. Under the outsourced model, it recorded only commissions or net profit from retail sales. Franchise marketing fund revenue was $8.7 million, while other service revenue totaled $5.6 million.

Expenses added pressure. Selling, general and administrative costs increased to $32.0 million from $24.1 million a year earlier, primarily because of higher legal expenses. Marketing fund expenses were $11.4 million. Xponential attributed that spending pattern to the timing of investment, saying it had front-loaded more marketing expenditure into the second quarter.

The company recorded a net loss of $4.8 million against net income of $1.3 million a year earlier. Adjusted EBITDA was $21.9 million, and adjusted net income was $0.8 million. Its adjusted measures excluded items including litigation expenses, financial transaction fees and losses and expenses associated with brand divestitures.

At June 30, Xponential held approximately $25.0 million in cash, cash equivalents and restricted cash. Its balance sheet also included a $10.0 million line-of-credit borrowing.

Nuzzo said the company's priorities included domestic and international studio growth, enhanced digital capabilities and additional franchisee support. In the preceding quarter, he had identified lead generation, conversion of prospects into members, pricing and membership structures as areas of focus in the effort to restore sustainable organic growth.

The revised full-year revenue outlook is $250.0 million to $260.0 million, down from $260.0 million to $270.0 million. Guidance for North America system-wide sales is $1.70 billion to $1.75 billion. The company expects approximately 150 net new studio openings for the full year, a measure distinct from the quarter's gross openings.

The profit forecast also moved lower: full-year adjusted EBITDA guidance is $91.0 million to $97.0 million, against the previous $100.0 million to $110.0 million range. Even the upper end of the revised forecast falls below the bottom of the range Xponential had previously given.