NEW YORK, March 11, 2024 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities who purchased or otherwise acquired Xponential Fitness, Inc. (“Xponential” or the “Company”) (NYSE: XPOF) securities between July 26, 2021 to December 7, 2023, inclusive (the “Class Period”).
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company had permanently closed at least 30 stores; (ii) the Company’s reported SSS and AUV metrics had been misstated by excluding underperforming stores; (iii) 8 out of 10 Company brands were losing money monthly; (iv) over 50% of the Company’s studios did not make a positive financial return; (v) over 60% of the Company’s revenue was one-time and non-recurring; (vi) more than 100 of the Company’s franchises were priced for sale at least 75% less than their initial cost; (vii) the Company 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 Company franchisees were substantially in debt, suffering high attrition rates and running non-viable studios that had no realistic path to profitability.
On June 26, 2023, Fuzzy Panda published a report on the Company, which, among other things, represented that: (i) CEO Anthony Geisler, has a long history of misleading investors; (ii) the Company issued a series of misleading statements about its store closures and the overall financial health of its franchisee base; (iii) more than 50% of the Company’s studios have never made a positive financial return; (iv) more than 100 of the Company’s franchises are priced for sale at least 75% less than their initial cost; (v) 8 out of 10 Company brands are losing money monthly; (vi) the Company’s publicly reported same-store sales (“SSS”)and average unit volume (“AUV”) metrics misleadingly exclude underperforming stores; (vii) over 60% of the Company’s revenue is one-time and non-recurring; and (viii) at least 30 Company stores have permanently closed. On this news, the price of the Company’s 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 the Company’s 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.
Investors who purchased or otherwise acquired shares of Xponential should contact the Firm prior to the April 9, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
