Planet Fitness lowers full year outlook

Planet Fitness first quarter 2024
Planet Fitness launched in Australia in 2019. (Source:

US-based Planet Fitness Inc. has reported financial results for its first quarter ending 31 March, 2024 and lowered its outlook for the full year.

The international chain has 19.6 million members and 2,599 stores across the US, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. There are 19 fitness centres across Australia’s east coast.

Craig Benson, Interim CEO, said the quarter ended with system-wide same store sales growth of 6.2 percent primarily driven by new member growth.

“During the quarter, we faced several headwinds which impacted our results including a shift in consumer focus in the New Year to savings and concern over the increase in Covid infections and other illnesses, as well as a national advertising campaign that we believe may not have resonated as broadly as we had anticipated.

“As a result of these and other factors, we are lowering our outlook for the full year,” he said.

“Despite these near-term headwinds, we are acting on the things that we can control. We’re focused on advancing our New Franchisee Growth Model and its strategic priorities and supporting our franchisees, while driving enhanced value for shareholders.”

Fiscal and operating results

Total revenue increased from the prior year period by 11.6 per cent to US$248m.

The group added 25 gyms, 23 franchisee-owned and two corporate, to bring the portfolio footprint to 2,599 as of March 31, 2024.

Operating results showed the franchise segment revenue was boosted by US$11.3m or 12.2 per cent to US$104m compared to the previous year. Of this, US$7.8 million was due to higher royalty revenue: US$4m from same store sales up by 6.3 per cent; US$1.6m from new stores; and US$2.2m due to higher royalties on annual fees.

In contrast, corporate-owned stores segment revenue increased US$16.5 million or 15.6 per cent to $122.4 million from US$105.9 million in the prior year period.

A same store sales lift accounted for US$10.6m while US$3.5m was due to new store openings, and US$2.4m came from a four store acquisition in Florida the prior year.

A decline in equipment sales saw revenue drop in this segment by 8.6 percent.

Expectations for 2024

Looking ahead, Planet Fitness expects more equipment purchases in at least 120 franchised fitness centres. The business plans to open another 140 to 150 locations.

Its financial expectations for the full year have dropped by about two per cent for revenue, EBITDA and adjusted net income.

The company continues to expect 2024 net interest expense to be approximately US$70m. It also expects capital expenditures to increase approximately 25 per cent driven by additional stores in its corporate-owned portfolio and depreciation and amortization to increase in the 11 per cent to 12 per cent range.