Xponential Fitness, Inc. (NYSE:XPOF) Q2 2023 Earnings Call Transcript

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Jeff Van Sinderen: Okay. Okay. I just want to clarify that. Thank you. And then I know this is maybe something you want to save till the Analyst Day, but just want to ask anyway regarding your individual brands. Can we say that all of your brands are comping positive with increasing AUV? And then I guess any insight you could share around retention, member add metrics around any of the individual brands that were maybe stand up favorably or not as favorably?

John Meloun: Yes. So when you look at Q2, and let me explain something, BFT as a brand actually had a negative comp, but that’s because there’s really only like a handful of studios. And one of the original studios when we bought the brand, which is in Santa Monica, it does like $1 million plus in AUV. So you start opening more younger brands that are pulling in — or more studios that are in the comp and naturally will just kind of average out. So when you look at — if you take that out of the mix, nine out of the — excuse me, eight of the nine remaining brands all had positive same-store sales in the quarter with one with a negative, and it was like minus 2%. And it was a brand that has, I would say, it’s an unscaled brand that doesn’t have a lot of studios open. So it’s really just noise.

Jeff Van Sinderen: Okay. So we would think that as that one scales, it should start to comp positive and so forth.

John Meloun: Yes. As you get more and more, I guess, you can say data points, we’ve continued to see — and it was just in that quarter that it was, I would say, flat at 2% on a nominal number of studios, but kind of reinforcing that our scaled brands, they generate — they’re 90% of the studios that are open and 90% plus of the system-wide sales are generated out of more of a concentration of five brands.

Jeff Van Sinderen: Okay. Well, that’s helpful. Sounds pretty healthy to me. Thanks for taking the questions.

John Meloun: Thank you very much.

Operator: Thank you. The next question is from George Kelly of ROTH Capital Partners. Please go ahead.

George Kelly: Hello everyone. Thanks for taking my questions. So first one for you, John, in your prepared remarks, you talked about a lot of your studios being owner-operated. So I was just curious if you have sort of a ballpark estimate of your total studio base, what percent of them are operated that way — or asked another way, if that’s too much to tell, which brands are most concentrated there?

Anthony Geisler: Yes. To give you a comment, that’s really directed more at the Pure Barre brand pre-acquisition. As I mentioned, most of our — the sales we do in Xpo’s, we recommend franchisees by three, right, because they get the economies of scale and the benefit of operating multiple locations. Pure Barre, originally when we acquired the brand, most of the franchisees that existed bought-one — it’s more of — it’s not like a three to — one franchisee for three studios, as more one franchisee to one studio. The model at which they — I wasn’t here back then, but it appears the model that they did is they would be owner operator kind of model. So it’s largely the Pure Barre count, that you could say fits that. Now when you look at post Xpo acquisition, the AUVs for the Pure Barre franchisees that have opened up post our acquisition is much higher.

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