Xponential CEO Pleased With ‘Strong Start’ to ’24, Lindora Growth
The boutique fitness and wellness franchisor sees immense potential for its newest brand, which offers GLP-1s and holistic wellness services
Xponential Fitness increased revenue by 12% in the first quarter of 2024 to $79.5 million, up from $70.7 million in the prior-year period, and is encouraged by the demand for Lindora, its most recent acquisition that provides GLP-1 weight-loss drugs and wellness therapies.
“2024 is off to a strong start,” said Anthony Geisler, founder and CEO of Xponential Fitness. “Adjusted EBITDA margins in the first quarter expanded to 38% of revenue, fueled by continued growth in our studio footprint and leaner operating expenses.”
Despite the revenue jump, XPOF shares fell around 12% on Friday as quarterly earnings per share missed analysts’ estimates.
The boutique fitness and wellness franchisor sold 173 franchise licenses and opened 111 new studios in the quarter across its ten brands, including Club Pilates, Pure Barre and Stretch Lab.
There was a 17% year-over-year increase in total members (783,000) in North America and an 18% in-studio visit increase to 14.9 million, resulting in a North American system-wide sales of over $400 million, a 25% increase from Q1 2023. Xponential reported a net loss of $4.4 million, or a loss of $0.30 per basic share, compared to $15 million in the prior year period.
All Eyes on Lindora
Adding Lindora to Xponential’s portfolio of brands has allowed the franchisor to enter the growing metabolic health and wellness space, marking a departure from its fitness-related brands. Lindora’s 31 metabolic health clinics — the majority of which are currently in Southern California, with one in Washington — provide clients with weight loss medications, hormone replacement therapy, IVs, laser treatments, meal plans and more.
Since March, Xponential has sold nearly 40 Lindora licenses, attracting interest from both existing and new franchisee groups, as well as owners from various backgrounds — a point that Xponential says demonstrates Lindora’s widespread appeal as an investment opportunity.
The brand will expand from the West Coast, entering new markets in Dallas, Boise, Idaho, Rochester, Buffalo, Atlanta, Chicago and Portland (Oregon) as it competes with Life Time’s Miora and Restore Hyper Wellness.
Geisler told investors on Thursday’s earnings call that the Lindora deal has increased Xponential’s access to the broader health and wellness market. The metabolic health brand recently bulked up its leadership team in preparation for its growth. Some of the newer Lindora locations are expected to open later in Q4.
“Buxton’s latest analysis illustrates our current TAM in the United States alone is approximately 8,400 studios,” Geisler said.
In addition to growing its metabolic health clinic locations, Xponential has several initiatives underway to improve Lindora’s service and product offerings and is currently expanding hormone replacement therapy and testosterone replacement therapy across its studios. The services are available through recurring memberships, subject to a prescription.
International Growth
Xponential is also focused on scaling its international presence, opening its 400th international studio last month. The franchisor had onboarded Bob Kaufman late last year to drive its overseas expansion.
“We are starting to build a significant presence in select international markets, which will help drive consumer awareness and economies of scale,” Geisler said. “We have over 220 studios in Australia. In Japan, we now have 50 Club Pilates studios open.”
