IRVINE, Calif. - Xponential Fitness, Inc. (NYSE: XPOF), a prominent global franchisor of boutique fitness brands, announced the completion of its STRIDE Fitness brand divestiture. The transaction was finalized with Stride Fitness Franchising, Inc., led by industry veteran Shaun Grove, who is also the President of another Xponential brand, Rumble Boxing.
The move comes as part of Xponential's strategic evaluation to optimize its brand portfolio for profitable growth and enhance customer experiences. Anthony Geisler, CEO of Xponential Fitness, stated the decision to hand over STRIDE to an experienced operator aligns with the company's goal to drive long-term stakeholder value. Geisler expressed confidence in Grove's nearly ten years of franchise management expertise as beneficial for STRIDE's future.
As Xponential Fitness begins its search for Grove's successor at Rumble Boxing, Grove has committed to maintaining his role until a new president is appointed. The company has indicated that STRIDE Fitness's locations, as of December 31, 2023, comprised less than 1% of Xponential's total open studios and that the divestiture is not expected to have a material impact on the 2024 revenue.
Xponential Fitness did not receive financial consideration for the divestiture but will provide transitional support to the new owner. This decision reflects Xponential's continual effort to refine its diverse suite of fitness brands, which includes Club Pilates, CycleBar, and YogaSix, among others.
This news is based on a press release statement from Xponential Fitness, Inc.
InvestingPro Insights
Amidst the strategic moves by Xponential Fitness, Inc. (NYSE: XPOF) to enhance its brand portfolio, the company's financial metrics and market performance provide a deeper understanding of its current position. According to real-time data from InvestingPro, Xponential Fitness has a market capitalization of 504.87 million USD, signifying its scale within the boutique fitness franchising industry. The company's price-to-earnings (P/E) ratio stands at a high 61.07, which could indicate investor confidence in its future earnings potential despite recent price declines.
InvestingPro Tips highlight that management's aggressive share buybacks and anticipated net income and sales growth for the current year could be driving factors for this confidence. Additionally, Xponential Fitness boasts an impressive gross profit margin of nearly 69.88% over the last twelve months as of Q1 2023, underlining the company's ability to maintain profitability within its operations.
However, it's also noted that the stock has experienced high price volatility and has seen a significant price drop over the last year, with a 58.4% decrease in one-year price total return. This information could be particularly relevant for investors considering the company's recent divestiture announcement and its forward-looking growth strategies. For those looking to delve further into Xponential's prospects, InvestingPro offers additional insights, including 12 more InvestingPro Tips available at https://www.investing.com/pro/XPOF. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which could be instrumental in making informed investment decisions.
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