US-based Planet Fitness’ final year fiscal results for 2023 showed a revenue boost of 14.4 per cent to US$1.1 billion (AUS$1.67 billion) from the previous year. System-wide sales increased 8.7 per cent.
Planet Fitness operates across the US, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia.
By the end of financial year 2023, the business had opened 165 new Planet Fitness gyms, bringing its system-wide footprint to 2,575.
Planet Fitness operates franchised and corporate-owned gyms, and an equipment division.
Higher royalties (US$32.1m) played a key role in lifting the franchise segment revenue by 17.7 per cent. Same store sales rose 8.5 per cent (US17.4m).
Corporate-owned stores lifted revenue US$69.9m (18.4 per cent) to US449.3 million compared to the previous year.
The equipment segment increased US6.4 million or 2.8 per cent to US$234.1 million.
New growth model
Craig Benson, interim CEO at Planet Fitness, said last year the business introduced a strategy to provide franchisee flexibility.
“In 2023, we proactively developed the New Growth Model to fuel long-term sustainable store growth and in recognition of the macro-economic environmental changes that have taken place since the pandemic.
“Focused on enhancing returns and reducing the capital requirements for opening and maintaining a Planet Fitness franchise location, the New Growth Model will provide our franchisees with additional flexibility to build their store portfolios for years to come,” he said.
“While we believe that 2024 will be a transition year as our franchisees incorporate the changes into their growth plans, given our consistent and predictable asset-light model we believe that we can deliver between 10 and 11 percent adjusted EBITDA growth, enabling us to generate significant cash flow to invest in the business and return capital to shareholders via our share repurchase program.”
The store footprint target is now 5,000, up from the 4,000 goal indicated in 2015 at the initial public offering.
