Shares of boutique fitness studio franchisor Xponential Fitness (NYSE:XPOF) fell 2.5% in the afternoon session after concerns over a slowdown in consumer discretionary spending grew amid broader economic headwinds.

The drop occurred as reports indicated that economic pressures, like higher everyday costs, were limiting discretionary budgets. This prompted consumers to become more selective with their spending. The athleisure sector, in particular, faced ongoing pressures from consumers trading down. Compounding these worries, recent data showed signs of a slowing U.S. economy. Consumer confidence fell to a five-month low, and a U.S. government shutdown raised concerns that a prolonged political standoff could weigh on incomes and purchasing power.

The stock market overreacts to news, and big price drops can present good opportunties to buy high-quality stocks. Is now the time to buy Xponential Fitness? Access our full analysis report here.

Xponential Fitness’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 18 days ago when the stock dropped 3.4% on the news that the company announced that it completed the divestiture of its Lindora brand to Next Health Management Group, Inc.

The global franchisor of boutique health and wellness brands framed the transaction as a strategic move to sharpen its business focus. According to CEO Mike Nuzzo, selling the Lindora weight management brand will permit Xponential to concentrate its time and capital on its core fitness modalities, aiming for a greater impact on profitability. This portfolio reshuffle is intended to steer resources toward the company's main fitness brands. The financial terms of the sale were not disclosed to the public, leaving some details of the deal unclear.

Xponential Fitness is down 44.4% since the beginning of the year, and at $7.75 per share, it is trading 58% below its 52-week high of $18.47 from February 2025. Investors who bought $1,000 worth of Xponential Fitness’s shares at the IPO in July 2021 would now be looking at an investment worth $632.65.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.