IRVINE, Calif. - Xponential Fitness , Inc. (NYSE: NYSE:XPOF), a prominent global franchisor of boutique fitness brands, has completed the sale of its Row House brand to Extraordinary Brands, the company announced today. The move is part of Xponential's strategic refocusing on its core brand portfolio.
Interim CEO Brenda Morris commented on the divestiture, stating, "The divestiture of Row House will further allow us to prioritize our time and resources on the brands that best fit our portfolio." She added that Xponential Fitness is committed to continuing high-level support for its franchisees across its remaining brands.
Xponential Fitness has assured that the transition for Row House franchisees to the new ownership will be smooth and well-coordinated with Extraordinary Brands.
According to the company, this divestiture is not anticipated to have a material effect on its revenue or EBITDA for the year 2024, and its financial guidance for the year remains unchanged. The terms of the transaction have not been publicly disclosed.
The fitness franchisor operates a diversified platform of ten brands, including the largest Pilates, indoor cycling, barre, and assisted stretching brands in the United States, as well as offerings in rowing, dancing, boxing, strength training, metabolic health, and yoga.
Xponential Fitness's mission is to make health and wellness accessible to all, with a network of studios across the U.S. and international locations in 49 states and 22 countries.
This news is based on a press release statement from Xponential Fitness, Inc.
InvestingPro Insights
Xponential Fitness, Inc. (NYSE: XPOF) has recently made headlines with its strategic sale of Row House, highlighting the company's focus on optimizing its brand portfolio. As investors and stakeholders look to understand the potential impact of this decision on the company's financial health, recent data from InvestingPro offers valuable insights.
According to InvestingPro, Xponential Fitness boasts impressive gross profit margins, with the last twelve months as of Q1 2024 showing a strong 69.61% margin. This indicates the company’s ability to maintain profitability despite the divestiture. Additionally, the company's P/E Ratio stands at 3.83, suggesting that the stock may be trading at a low earnings multiple compared to its peers. This could be an attractive entry point for investors considering the company's profitability over the last twelve months and the prediction by analysts that the company will remain profitable this year.
However, it's important to note that the stock has experienced significant price volatility, with a 35.29% drop over the last month and a 69.57% decrease over the last year. This could be a reflection of broader market conditions or specific company challenges. Furthermore, the Relative Strength Index (RSI) suggests that the stock is currently in oversold territory, which might interest contrarian investors or those looking for potential rebound opportunities.
Investors interested in a deeper dive into Xponential Fitness's financial metrics and strategic outlook can find additional InvestingPro Tips by visiting https://www.investing.com/pro/XPOF. Currently, there are 11 more InvestingPro Tips available for those considering an investment in XPOF. To enhance your investing strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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