F45 Training shares plunged more than 70 per cent after the fitness chain, which is backed by actor Mark Wahlberg, slashed its full-year outlook and announced that its chief executive was stepping aside.
F45’s share price fell as much as 77.5 per cent to a record low of 79 cents during morning trading on Wednesday. This left shares down more than 95 per cent in the year since the company floated on the New York Stock Exchange at a price of $16 a share for a valuation of $1.4bn.
The sell-off followed an announcement released after the closing bell on Tuesday in which F45 cut its fiscal 2022 outlook in an effort to prioritise “profitability and cash flow generation”.
The company, which is based in Austin, Texas, now expects full-year revenue to between $120mn and $130mn, compared with previously forecasting revenues of between $255mn and $275mn.
F45 withdrew its free cash flow guidance and said adjusted ebitda was now forecast to be about one-third of the $90mn to $100mn it had previously forecast. It also downgraded its forecast for gym openings to be in the range of 350 to 450 new studios this fiscal year, from 1,500 previously.
“While we expect growth to continue, market dynamics are having a greater than expected impact on the ability of franchisees to obtain capital to develop new F45 locations,” said chief financial officer Chris Payne.
Adam Gilchrist, who founded the company in 2013, announced that he was stepping aside as chief executive and chair, but would remain on the board as a director. Ben Coates, a member of the F45 board, will serve as interim CEO while the board searches for a successor to Gilchrist.
Wahlberg, the star of several of the Transformers movies and The Departed, sold more than 1mn F45 shares at prices between $9.81 and $13.44 in more than two dozen trades between March 16 and April 22, according to filings with the US Securities and Exchange Commission.
The high-profile investor still holds more than 1.6mn shares, or 1.7 per cent of the company, according to his most recent filing in mid-June, down from more than 2.7mn at the time of F45’s float last year.
F45 shares recovered to $1.26, on track for a one-day drop of around 64 per cent, during lunchtime on Wednesday.