NEW YORK--(BUSINESS WIRE)--Attorney Advertising--Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against Xponential Fitness, Inc. (“Xponential” or “the Company”) (NYSE: XPOF) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Xponential securities between July 26, 2021 and December 7, 2023, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/XPOF.
Case Details:
The Complaint alleges that Xponential made materially false and/or misleading statements because they misrepresented and failed to disclose the following adverse facts, which were known to defendants or recklessly disregarded by them:
(1) that Xponential had permanently closed at least 30 stores;
(2) that Xponential’s reported SSS and AUV metrics had been misstated by excluding underperforming stores;
(3) that 8 out of 10 Xponential brands were losing money monthly;
(4) that over 50% of Xponential studios did not make a positive financial return;
(5) that over 60% of Xponential’s revenue was one-time and nonrecurring;
(6) that more than 100 of the Company’s franchises were for sale at a price that is at least 75% less than their initial cost;
(7) that Xponential 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;
(8) that many Xponential franchisees were substantially in debt, suffering high attrition rates and running non-viable studios that had no realistic path to profitability; and
(9) that based on the foregoing, defendants lacked a reasonable factual basis for their positive statements about Xponential’s then-current business operations and future financial prospects.
On June 26, 2023, Fuzzy Panda published the Fuzzy Panda Report, which, among other things, represented that: (1) defendant Geisler has had a long history of misleading investors; (2) Xponential has issued a series of misleading statements about its store closures and the overall financial health of its franchisee base; (3) more than 50% of the Company’s studios never make a positive financial return; (4) more than 100 of Company’s franchises are for sale at a price that is at least 75% less than their initial cost; (5) 8 out of 10 Xponential brands are losing money monthly; (6) the Company’s publicly reported SSS and AUV metrics misleadingly exclude underperforming stores; (7) over 60% of Xponential’s revenue is one-time and non-recurring; and (8) at least 30 Xponential stores had been permanently closed.
Then, on December 7, 2023, Businessweek published an exposé on the Company that largely corroborated the Fuzzy Panda Report’s allegations titled “Club Pilates, Pure Barre Owners Say Xponential Left Them Bankrupt.” The article stated that Businessweek had interviewed dozens of former business partners, employees, and franchisees of the Company who revealed that Xponential misled many franchisees into a “financial nightmare.” The article stated that defendant 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.”
Following the publication of the Businessweek article, the price of Xponential common stock fell more than 26% over two trading days on heavy trading volume to close at less than $9 per share on December 11, 2023, causing plaintiff and other Class members to suffer additional economic losses and damages under the federal securities laws.
What’s Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/XPOF or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in Xponential you have until April 9, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
