What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +2.0%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025.
Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Apparel and Accessories company Hanesbrands (NYSE:HBI) jumped 5.3%. Is now the time to buy Hanesbrands? Access our full analysis report here, it’s free.
- Leisure Facilities company Xponential Fitness (NYSE:XPOF) jumped 5.5%. Is now the time to buy Xponential Fitness? Access our full analysis report here, it’s free.
- Real Estate Services company RE/MAX (NYSE:RMAX) jumped 5.4%. Is now the time to buy RE/MAX? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company Herc (NYSE:HRI) jumped 5.1%. Is now the time to buy Herc? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Coherent (NYSE:COHR) jumped 5.3%. Is now the time to buy Coherent? Access our full analysis report here, it’s free.
Zooming In On Xponential Fitness (XPOF)
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 biggest move we wrote about over the last year was 2 months ago when the stock dropped 38.4% on the news that the company reported weak fourth-quarter 2024 results: its full-year revenue and EBITDA guidance missed significantly.
The standout detail was a 21% increase in system-wide sales across North America, driven by strong franchise growth and rising membership.
However, total sales dropped 7% year over year, highlighting struggles in non-franchise revenue streams such as equipment and merchandise sales. Profitability also took a hit, with margins contracting significantly. This was largely due to a $46 million impairment charge related to goodwill and other assets. Combined with sluggish revenue growth, these factors led to a substantial earnings miss.
Overall, this was a weaker quarter, as strong franchise sales and a revenue beat were overshadowed by a shrinking bottom line and cautious guidance.
Xponential Fitness is down 35.5% since the beginning of the year, and at $9.00 per share, it is trading 51.3% 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 $734.29.
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