Xponential Fitness CEO Anthony Geisler at the Fresh York Stock Exchange.
Source: NYSE
Shares Xponential Fitnessthe parent company of CycleBar and Pure Barre fitness studios, saw its stock rise Monday after the company announced tardy Friday that CEO Anthony Geisler would be suspended indefinitely and would become an inactive member of its board of directors.
The company’s shares initially lost about 10% on Monday morning, but rebounded and ended the session trading 11% higher. The company’s market capitalization is just under $500 million.
Brenda Morris, a board member since 2019, will serve as interim CEO.
Xponential Fitnesswhich owns more than 3,000 boutique fitness and wellness studios worldwide, also said it received notice of an investigation by the U.S. Attorney’s Office for the Central District of California last week.
“Regarding the investigation, it appears that the information requested largely mimics information from a previously disclosed SEC investigation,” said Korinne Wolfmeyer, an analyst at Piper Sandler. Piper Sandler maintained a hold rating on Xponential Fitness shares, but lowered the price target to $9 from $12. At Monday’s close, shares were trading at $9.44 apiece.
Xponential Fitness management previously disclosed an SEC investigation from December that alleged the company provided false and/or misleading information to investors, including unit volume and franchise closure metrics. In February, shareholders filed a class action lawsuit over the allegations against the company, demanding financial compensation.
“The company intends to continue its cooperation with the SEC and intends to cooperate with the USAO,” Xponential Fitness said in a statement press release announcement of executive changes.
Courtesy: Xponential Fitness
Xponential Fitness also confirmed its full-year 2024 guidance, which was previously announced on May 2.
The company did not respond to CNBC’s request for comment on the probe.
“We are satisfied that our financial goals remain unchanged and that Ms. Morris appears to be the right leader for this interim position,” Wolfmeyer said.
Wolfmeyer noted, however, that the company remains cautious.
“We are fighting to keep this name even after Friday’s withdrawal,” she added.
Correction: This story has been updated to correct Xponential Fitness’s market capitalization, which is just under $500 million.
