03.09.2021 12:11:00

F45 Training Flexes Its Muscles With Strong Q2 Revenue, But Earnings Fall Short

Backed by action movie star Mark Wahlberg and operating a fast-growing subscription model, the newly public gym company F45 Training (NYSE: FXLV) has seen rapid stock gains followed by an equally swift fall after its second-quarter 2021 earnings report on August 26. The company's revenue grew by over 50% year-over-year. Yet, F45 also registered a loss and missed Wall Street's consensus earnings-per-share (EPS) estimates by over a dollar. There are several reasons why investors might want to remain cautious at this point, but also why they might want to watch future developments closely.On the bright side for F45 Training, its top-line revenue rose 54% year over year while same-store sales grew by an explosive 126%. Most of the company's revenue for the quarter came from sales of franchises. Out of $26.8 million in net sales, $20.6 million came from franchise revenues, with 554 new franchises sold in the period. Equipment sales accounted for the rest of its top-line sales.During the company's Q2 earnings conference call, CEO Adam Gilchrist expressed his confidence that "based on our white-space analysis, we believe there is long-term studio potential for us to open over 7,000 studios in the U.S." He claims the overseas total will eventually reach 16,000 locations, indicating a potential overall network of 23,000 franchises.Continue reading
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