Xponential (XPOF) to Expand Pure Barre and YogaSix With Sunpark
Xponential Fitness, Inc. XPOF inked a Master Franchise Agreement with the multi-brand operator and global franchisor Sunpark Co. Ltd. to expand its Pure Barre and YogaSix brands in Japan.
This move adds to XPOF's growing presence in the Japanese market, marking the sixth and seventh brands in the portfolio, alongside Club Pilates, CycleBar, Rumble, AKT and StretchLab. Per the agreement, Sunpark is committed to opening a minimum of 50 franchised studios for Pure Barre and YogaSix as part of this strategic expansion.
The Master Franchise Agreement with Sunpark follows StretchLab's recent launch in Tokyo in July 2023. Sunpark, with substantial real estate and development expertise, is expected to boost the Xponential Fitness brand’s growth.
XPOF is optimistic and plans to launch Pure Barre and YogaSix in 2024. This new multi-brand relationship aligns Sunpark's successful expansion record in Japan and Asia with Xponential's extensive boutique fitness experience.
Pure Barre and YogaSix’s Footprint Expansion
The Pure Barre agreement marks the brand's first expansion into Asia and signifies the ongoing global expansion of Xponential Fitness brands. The company operates or is developing studios for its eight brands in 23 countries across North America, Europe, Asia, the Middle East and Australia. XPOF inked its first international agreement earlier in 2023 for Germany with the existing Master Franchisee of Club Pilates in the country. Globally, YogaSix has nearly 200 open studios, while Pure Barre boasts more than 640 open studios.
Xponential on Expansion Spree
Xponential is one of the largest global franchisors of boutique fitness brands and is witnessing robust demand for its brands outside of North America. The company’s growth durability is primarily backed by new studios opened by its franchisees along with additional business in the existing locations.
As of Sep 30, 2023, Xponential operated about 2,980 studios globally, with a total of 6,088 licenses sold across its 10 leading fitness brands. As of the third quarter of 2023, the company has franchise, master franchise and international expansion agreements in 23 countries globally. In the same quarter, the franchise revenues rallied 21% to $36.4 million year over year.
The company’s persistent expansion initiatives into new markets have been reflected in 1,000 studios obligated to open under its master franchise agreements.
Image Source: Zacks Investment Research
Shares of XPOF have lost 27.7% in the past six months compared with the Zacks Leisure and Recreation Services industry’s 7.2% decline. Although the company’s shares have underperformed the industry, its accretive expansion strategies will help it gain traction in this high-cost environment in the upcoming period.
Zacks Rank & Key Picks
Xponential carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Consumer Discretionary sector:
Virco Mfg. Corporation VIRC sports a Zacks Rank #1 (Strong Buy). VIRC has a trailing four-quarter earnings surprise of 188.6% on average. VIRC’s shares have surged 143.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VIRC’s 2024 sales and earnings per share (EPS) indicates a rise of 15.7% and 32.4%, respectively, from the year-ago period’s levels.
Stride, Inc. LRN carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 44.3% on average. Shares of LRN have increased 87.3% in the past year.
The Zacks Consensus Estimate for LRN’s 2024 sales and EPS indicates a rise of 9.1% and 34.7%, respectively, from the year-ago period’s levels.
Bluegreen Vacations Holding Corporation BVH flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 29.4% on average. Shares of BVH have increased 192.9% in the past year.
The Zacks Consensus Estimate for BVH’s 2024 sales and EPS indicates a rise of 1.5% and 22.6%, respectively, from the year-ago period’s levels.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Virco Manufacturing Corporation (VIRC) : Free Stock Analysis Report
Stride, Inc. (LRN) : Free Stock Analysis Report
Bluegreen Vacations Holding Corporation (BVH) : Free Stock Analysis Report
Xponential Fitness, Inc. (XPOF) : Free Stock Analysis Report
