Planet Fitness
Despite falling off last year’s impressive pace, Planet Fitness’s Q1 results signal its steady upward climb.
$PLNT
Beginning in late-2021, the high-value, low-price gym chain became the figurehead for the return of in-person exercise, with membership levels breaking pre-pandemic figures. Its Q1 gives good reason to still be bullish.
By the numbers:
- The gym operator’s quarterly earnings came in at $0.32/share, outpacing Wall Street projections of $0.27; in comparison, last year’s EPS was $0.10.
- Total revenue jumped 67% YoY from $74.8M to $186.7M, just shy of analysts’ expectations of $190M.
- Equipment segment revenue soared 206% to $30.4M, above last year’s $9.9M, while corporate-owned stores increased 101% YoY to $76.2M.
- System-wide sales topped $961M, up $196M from $765M in the prior year period.
A mixed bag. Citing Omicron concerns, CEO Chris Rondeau noted pullbacks in membership growth rate and gym usage — particularly in January. Renewed upticks in February and March were unable to make up for the stall.
Still, the company closed the quarter with an all-time high of 16.2M members and expanded its footprint with 37 new stores, a 70% increase to Q1 2021. It also acquired Sunshine Fitness (one of its best-performing franchisees) and refinanced a portion of its debt.
Going forward, Rondeau outlined two main growth strategies:
- Same-store sales: Doubling down on Gen Z, a key driver of its growth, the operator is granting free gym access to all teens this summer.
- Global expansion: Operating in all 50 US states and in Canada, Mexico, Australia, and more, the company is pushing into new markets — it just signed for 25 new locations in New Zealand.
Further boosting revenue, the gym operator is raising prices on its Black Card membership from $22.99 to $24.99 (though it will maintain its standard $10/month membership). And there’s plenty of room for growth, says Rondeau:
“Within 10 miles of a current Planet Fitness store, there are approximately 140 million people old enough to join a gym but do not belong to any gym.”
Ups and downs. A “boring” brick-and-mortar operator, Planet Fitness delivers affordable, low-intimidation fitness. Keeping things simple, it surged while industry darling Peloton plunged.
Punchline: Proving that gyms aren’t dead, Planet Fitness is hitting its stride, despite a slow start to the year. Through 2022, the company expects revenues to trend upward, at ~50% over 2021 levels.
