The global franchisor of boutique fitness brands, which signed a master franchise agreement for France during the period, reported a 1 percent increase in Q2 operating income to $36.5 million from $36.1 million. Net income attributable to Xponential Fitness rose by 9.2 percent to $18.4 million on 30 percent revenue growth to $77.3 million from $59.6 million for the period ended June 30. Ebit was flat in Q2 at $27.7 million, and SG&A expenses increased by nearly 52 percent to $44.4 million.
During the period, Xponential experienced double-digit sales growth from all three segments of its business. Franchise revenues increased by 27 percent to $35.1 million. Meanwhile, equipment revenues flexed 16.5 percent higher to $14.4 million, and merchandise sales grew by 24 percent year-over-year to $8.4 million. North America system-wide sales expanded by 37 percent to $341.3 million as same-store sales in the geography rose by 15 percent versus 25 percent growth in Q2/22.
Besides adding France as its nineteenth franchise market and renewing and expanding its relationship with Lululemon during the period, Xponential saw its board approve a $50 million stock repurchase program and the group’s primary lender, MSD Partners, amend its term loan and agree to fund the stock buyback plan.
With the results, the Irvine, CA-based company raised its FY23 outlook for revenues, new studio openings, and adjusted Ebitda. North American system-wide sales are now forecast to grow by 1.1 percent to a prior estimate of $1.385 to $1.395 billion. Adjusted Ebitda, at the midpoint, is predicted to rise by 41 percent to a $102.5 to $106.5 million range. Xponential is planning for 540 to 560 new studio openings in 2023, an increase of 8 percent year-over-year based on the addition of 550 new locations.
