Planet Fitness Mulls Changes After Strong Earnings
Planet Fitness (NYSE:PLNT) is a New Hampshire-based company that franchises and operates fitness centers under the Planet Fitness brand. The company is reportedly considering some significant changes, even after the strong earnings report that it has released this month. Planet Fitness and its competitors have benefited from the market growth of gyms, health, and fitness clubs across North America.
The company unveiled its third quarter (Q3) fiscal 2023 earnings on Tuesday, November 7, 2023. Planet Fitness reported system-wide store sales growth of 8.4%. Meanwhile, total members grew to over 18.5 million members. This growth has spurred the company to expand its reach. In Q3 2023, Planet Fitness opened 26 new Planet Fitness location, which brings its total to 2,498.
Adjusted net income was reported at $51.8 million or $0.59 per diluted share – up from $38.2 million or $0.42 per diluted share in the third quarter of fiscal 2022. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to give a clearer picture of a company’s profitability. Planet Fitness delivered adjusted EBITDA of $111.9 million in Q3 2023 – up from $93.9 million in the prior year.
Recent reports also indicate that Planet Fitness is mulling price increases for its classic membership. The price for a classic membership has remained fixed for 30 years. Interim CEO Craig Benson cited inflation as the reason for the potential change, but that is unlikely to please its wide customer base. However, the success of Netflix’s price increases is clearly having an impact on these kind of decisions in other sectors. Investors should keep an eye on this development ahead of the New Year.
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