According to the complaint, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that, among other things: (i) Xponential had permanently closed at least 30 stores; (ii) Xponential’s reported same-store sales and average unit volume metrics had been misstated by excluding underperforming stores; (iii) 8 out of 10 Xponential brands were losing money monthly; and (iv) more than 100 of Xponential’s franchises were for sale at a price that was at least 75% less than the initial cost.

On June 26, 2023, Fuzzy Panda published a report which, among other things, represented that: (i) Xponential CEO Anthony Geisler, has had a long history of misleading investors; (ii) Xponential has issued a series of misleading statements about its store closures and the overall financial health of its franchisee base; (iii) more than 50% of Xponential’s studios never make a positive financial return; (iv) more than 100 of Xponential’s franchises were for sale at a price that was at least 75% less than the initial cost; and (v) at least 30 Xponential stores had been permanently closed.

On this news, the price of Xponential common stock fell more than 37%, from a closing price of $25.11 per share on June 26, 2023 to a close of $15.72 on June 27, a decline of $9.39 per share.

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 dozens of former business partners, employees, and franchisees of Xponential who revealed that Xponential misled many franchisees into a “financial nightmare.”

On this news, the price of Xponential common stock fell more than 26% over two trading days.

Investors who purchased or acquired Xponential Fitness securities between July 26, 2021 and December 7, 2023, may no later than April 9, 2024, seek to be appointed as a lead plaintiff representative of the class.