Xponential Fitness experienced a challenging Q3 2026, with sales declining and results missing Wall Street’s expectations, prompting a significant negative market reaction. Management attributed the revenue shortfall to lower merchandise sales, slower franchise territory revenue, and ongoing issues in the transition to a new merchandise logistics partner. CEO Mike Nuzzo also acknowledged that competitive pressures and a more difficult real estate environment contributed to reduced new studio openings. He noted, “We expected a level of moderation off of that record-breaking level of AUV,” reflecting on Club Pilates’ industry-leading studio performance and its impact on comparable sales.
Is now the time to buy XPOF? Find out in our full research report (it’s free for active Edge members).
Xponential Fitness (XPOF) Q3 2026 highlights:
- Revenue $62.26 million vs S&P analyst consensus of $63.11 million (21% year-on-year decline, 1.4% miss)
- Adjusted EPS $0.04 vs S&P analyst consensus of $0.15 (73% miss)
- Adjusted EBITDA $24.31 million vs analyst estimates of $24.75 million (39% margin, 1.8% miss)
- Revenue guidance The company reconfirmed its revenue guidance for the full year of $255 million at the midpoint
- EBITDA guidance $92.5 million at the midpoint for the full year, below analyst estimates of $93.04 million
- Operating margin 31.4%, up from 4.5% in the same quarter last year
- Market capitalization $196.5 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Xponential Fitness’s Q3 earnings call
- John Heinbockel (Guggenheim Partners) asked about the drivers of Club Pilates’ same-store sales decline and whether flat or slightly negative comps are sustainable for franchisees. CEO Mike Nuzzo explained that new member acquisition is the main challenge, but strong AUVs keep the model economically viable for both franchisees and the company.
- Derin Sezercan (UBS) inquired about the specific drivers of same-store sales declines at Club Pilates and across the portfolio. Nuzzo responded that organic lead generation and digital marketing changes are primary areas of focus to reverse the trend.
- Kiyan Phelps (Northland Capital Markets) questioned why adjusted EBITDA guidance was narrowed while sales and revenue guidance remained unchanged. Nuzzo clarified that the revision reflected cost savings, more targeted marketing spend, and refined expectations for studio openings and merchandise performance.
- Kiyan Phelps (Northland Capital Markets) also asked about the reasons behind the slower pace of net new studio openings. Nuzzo attributed delays to a tougher real estate environment and the company’s more selective site approval process, emphasizing that franchisee intent to open new locations remains strong.
- No other analyst questions on the call
Catalysts in upcoming quarters
In the upcoming quarters, our team will be watching (1) whether technology and marketing investments lead to sustained improvements in member acquisition and lead conversion rates, (2) progress in resolving merchandise and logistics challenges that have weighed on ancillary revenue, and (3) the pace and quality of domestic and international studio openings. Additionally, we are monitoring the impact of cost structure reviews and any developments in the company’s ongoing strategic alternatives review process.
Xponential Fitness currently trades at $4.71, up from $4.40 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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