Boutique franchisor, Xponential Fitness struck an optimistic tone when releasing its Q2 results, introducing Mike Nuzzo as CEO and reiterating plans to focus on core brands.

Second quarter results were released yesterday, showing that revenue decreased by 1 per cent to US$76.2 million from the previous year period. This was attributed to lower equipment revenue from a decline in installations, as well as a decrease in merchandise sales.

During the period 57 studios were closed globally (1.7 per cent), nearly half were CycleBar or Rumble. Fifty eight licences were sold, largely Club Pilates.

North American system wide sales were up 12 per cent year on year, to $474 million. Total members also increased by 12 per cent year on year and stood at 863,000 at the end of June.

“We’ve made meaningful progress on several key initiatives we discussed during our Investor and Analyst Day,” said Mark King, former CEO. “We’ve expanded our field operations team, executed a new retail partnership, and completed the divestiture of CycleBar and Rumble. That said, we revised guidance reflecting the recent divestiture and proactive investments in the organisation intended to position us for a stronger 2026.”

Looking ahead, North American system-wide sales are projected to be between $1.78 billion and $1.8 billion and the company plans to open 170 to 190 new studios globally. Revenue guidance for the full year has been dropped by 5 per cent to $300-310 million.

CEO Mike Nuzzo expressed optimism about the company’s growth potential: “First, we are in a great space. Boutique fitness has substantial momentum and long term growth potential as consumers continue to invest more in their health routines.

“Second, we have amazing studio brands led by passionate and committed franchisees with so much upside potential. And third, Mark and the team have made great progress in building a team, the supporting foundation and company culture to drive strong growth and financial returns.

“I know Xponential can elevate and lead the fitness space around innovation, best in class franchisee support and smart and healthy unit growth and expansion. Meaningful progress has been made, but I look forward to helping the team accelerate along the journey to providing the most impactful member experience and to becoming one of the most coveted franchisee partners in the industry.”

King said that recent strategic actions will continue to improve performance, with the divestiture of CycleBar and Rumble allowing a sharpened focus on the core brands: Club Pilates, Pure Barre, Yoga Six and StretchLab.

Investment will be pumped into Club Pilates including a major marketing campaign, long term product innovation, to utilise capacity, bring larger operators into the franchisee system, the creation of new pricing tiers and membership types.

“With a leaner and more focused portfolio we expect to see improvements in overall portfolio health, a reduction in closure rates and an increase in average unit volumes,” he said. “There will be a period of transition as we right size back office operations, this evolution will ultimately position us to operate more efficiently and focus on our highest return brands.”

A new retail agreement with Fit Commerce will outsource the retail operations which will reduce selling and admin expenses while introducing annual minimum guaranteed commissions that will scale in time to $50 million in the initial five year contract period.