The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired Xponential Fitness, Inc. (“Xponential” or the “Company”) (NYSE:XPOF) securities during the period of July 26, 2021 to December 7, 2023 inclusive (“the Class Period”). Investors have until April 9, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

[Click here to learn more about the class action]

On June 26, 2023, Fuzzy Panda published a report on Xponential, which, among other things, represented that: (i) CEO Anthony Geisler, has a long history of misleading investors; (ii) Xponential issued a series of misleading statements about its store closures and the overall financial health of its franchisee base; (iii) more than 50% of Xponential’s studios have never made a positive financial return; (iv) more than 100 of Xponential’s franchises are priced for sale at least 75% less than their initial cost; (v) 8 out of 10 Xponential brands are losing money monthly; (vi) Xponential’s publicly reported same-store sales (“SSS”)and average unit volume (“AUV”) metrics misleadingly exclude underperforming stores; (vii) over 60% of Xponential’s revenue is one-time and non-recurring; and (viii) at least 30 Xponential stores have permanently closed. On this news, the price of Xponential shares declined by $9.39, or approximately 37.4%, from $25.11 per share to close at $15.72 on June 27, 2023.

Then, on December 7, 2023, Businessweek published an article titled “Club Pilates, Pure Barre Owners Say Xponential Left Them Bankrupt,” which stated that Businessweek had interviewed multiple former business partners, employees, and franchisees of Xponential who contended that Xponential misled many franchisees into a “financial nightmare.” The article further stated CEO Geisler “has a track record of combative management, deploying growth-at-all-costs tactics and unleashing aggressive reprisals against anyone who gets in his way.” On this news, the price of Xponential shares declined by $3.20, or approximately 26.3% over two trading days, from $12.19 per share on December 7, 2023 to close at $8.99 on December 11, 2023.

The lawsuit alleges that Xponential made false and/or misleading statements and/or failed to disclose that: (i) Xponential had permanently closed at least 30 stores; (ii) Xponential’s reported SSS and AUV metrics had been misstated by excluding underperforming stores; (iii) 8 out of 10 Xponential brands were losing money monthly; (iv) over 50% of Xponential studios did not make a positive financial return; (v) over 60% of Xponential’s revenue was one-time and non-recurring; (vi) more than 100 of Xponential’s franchises were priced for sale at least 75% less than their initial cost; (vii) Xponential had misled many of its franchisees into opening franchises by misrepresenting the financial profile and profitability of its studios, as well as the expected rate of return for new studio openings; and (viii) many Xponential franchisees were substantially in debt, suffering high attrition rates and running non-viable studios that had no realistic path to profitability.

If you purchased or otherwise acquired Xponential securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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