Xponential Fitness records US$98.7 million loss for 2024

International boutique franchisor, Xponential Fitness has posted a net loss of US$98.7 million for the full year - leading to a significant drop in its share value.

The group, whose brands include Club Pilates, StretchLab, Pure Barre, CycleBar, Body Fit Training (BFT), Rumble Boxing and YogaSix, had recorded a profit of US$37.5 million in 2023.

It has attributed the 2024 losses to factors including a US$8.4 million decrease in financial transaction fees; a US$27.4 million increase in acquisition and transaction expenses - which includes non-cash contingent consideration primarily related to the Rumble acquisition - and a US$25.7 million increase in litigation expenses.

It's been a volatile year for the world’s largest boutique franchise company. After announcing all time membership highs in April 2024, founder and Chief Executive, Anthony Geisler, was forced to resign because of a legal challenge by the United States Attorney’s Office for the Central District of California.

This matter remains unresolved.

The company also lost a number of other key executives, including John Kersh and Sarah Luna.

Former Taco Bell Chief Executive, Mark King was brought in last June to revitalise the management team.

Commenting on the challenges the group faces, King stated “we've made significant progress over the course of my first two full quarters as CEO.

"I've also gained a deeper understanding of both the opportunities and challenges at Xponential.

“It's clear from some of the issues we've found and are addressing that there's a lot to do," he said. "That said, I have full confidence in the new team we’ve assembled; they all have experience executing on exactly what Xponential must do to sustainably grow.”

Last year 400 franchise licenses were sold and 464 new studios were opened.

Australian founded BFT launched two locations in the United Kingdom and has recently agreed a master franchisor for Scandinavia.

In September last year, Viva Leisure made a strategic investment in Boutique Fitness Studios (BFS), the master franchisee of Xponential Fitness-owned brands Club Pilates, Rumble Boxing, StretchLab and CycleBar in Australia and New Zealand.

Image: Group exercise at BFT.