What Happened?
Shares of boutique fitness studio franchisor Xponential Fitness (NYSE: XPOF) fell 41.6% in the afternoon session after the company reported a much larger-than-expected fourth-quarter loss and issued disappointing guidance for the upcoming year.
The boutique fitness franchisor posted an adjusted loss of $0.91 per share, significantly missing Wall Street's consensus estimate of a $0.03 loss. Adding to investor concerns, the company's full-year revenue guidance of $265 million at the midpoint came in 12.5% below analysts' expectations. Similarly, its full-year EBITDA forecast of $105 million also fell short of estimates. While the company's quarterly revenue of $82.96 million topped expectations, it was flat compared to the same period last year, signaling slowing growth. The combination of a significant earnings miss and a weak forward-looking outlook overshadowed the quarterly revenue beat, prompting a sharp negative reaction from investors.
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What Is The Market Telling Us
Xponential Fitness’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. But moves this big are rare even for Xponential Fitness and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 2.4% on the news that the Trump administration's announcement of new global tariffs, reignited trade policy uncertainty. The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.
Xponential Fitness is down 42.6% since the beginning of the year, and at $4.61 per share, it is trading 66.7% below its 52-week high of $13.83 from March 2025. Investors who bought $1,000 worth of Xponential Fitness’s shares at the IPO in July 2021 would now be looking at an investment worth $375.92.
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