Core Insights - A growing trend among gym users is the shift towards muscle building, which has become the primary fitness goal for 2024, surpassing weight loss and general movement [1] - Major fitness companies like Peloton and Planet Fitness are responding to this trend by increasing their focus on strength training [1] Company Strategies - Planet Fitness has adjusted its equipment mix to prioritize strength training, reflecting the preferences of its members, particularly Gen Z, who represent 25% of its customer base [2] - Peloton has initiated testing for a new app called Peloton Strength+, which is dedicated to strength workout plans, indicating a strategic pivot towards strength training [2] Market Trends - The preference for strength workouts is particularly pronounced among Gen Z, with a noted decline in the use of cardio equipment like ellipticals and bikes [3] - Planet Fitness reported better-than-expected revenue in its second-quarter earnings, attributing part of this success to the increased emphasis on strength workouts, which are generally less expensive to implement than cardio equipment [3] Demographic Insights - There is a notable increase in women engaging in strength training, with personal trainers observing a shift from traditional cardio and group fitness classes to strength-focused workouts [4]

Core Viewpoint - Planet Fitness (PLNT) has shown improvement in its business performance, with potential catalysts for growth acceleration expected in FY25, particularly under the leadership of the new CEO [2][3][13]. Financial Performance - In Q2 2024, PLNT reported revenue of $301 million, exceeding consensus expectations of $291 million, driven by franchise revenue of approximately $88 million, national advertising fund revenue of $20.1 million, corporate-owned stores revenue of $125.5 million, and equipment revenue of $68 million [3]. - Adjusted EBITDA was $128 million, surpassing street estimates by $4 million, while adjusted EPS was $0.71, beating expectations by $0.05 [3]. - Management reiterated FY24 guidance, projecting revenue growth of 4-6%, adjusted EBITDA growth of 7-9%, and adjusted EPS growth of 7-9% year-over-year [3]. Member Churn and Macro Environment - Member churn rates have improved and are trending towards normalized levels, although still elevated compared to historical data [3][13]. - The macroeconomic environment has stabilized, with inflation falling below 3% and a stable labor market, which is expected to enhance consumer spending and benefit PLNT [3][4]. Growth Catalysts - Management is testing new pricing for the Black Card membership, with potential increases from the current $24.99 to $27.99 or $29.99, representing a potential pricing uplift of approximately 16% [5]. - The new CEO, Colleen Keating, is focused on hiring a Chief Development Officer to drive unit growth, indicating a commitment to expanding the franchise model [8][9]. - PLNT has successfully attracted a growing number of Millennials and Gen Z members, which positions the brand well for future growth [8]. Leadership and Strategy - The new CEO's experience in the hospitality sector and her focus on enhancing the membership experience are seen as positive developments for PLNT [10][12]. - The CEO's strategic initiatives, including potential hiring of a COO and direct engagement with top management, are expected to improve operational effectiveness and credibility [10][12]. Valuation Outlook - PLNT's future valuation re-rating will depend on its ability to reaccelerate growth to historical double-digit levels, with two potential scenarios outlined: one where growth accelerates and another where it disappoints, leading to a significant derating [12].

For the quarter ended June 2024, Planet Fitness (PLNT) reported revenue of $300.94 million, up 5.1% over the same period last year. EPS came in at $0.71, compared to $0.65 in the year-ago quarter. The reported revenue represents a surprise of +2.93% over the Zacks Consensus Estimate of $292.39 million. With the consensus EPS estimate being $0.65, the EPS surprise was +9.23%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Stree ...

Financial Performance - Total revenue for Q2 2024 reached $300,941, an increase of 5.2% compared to $286,463 in Q2 2023[11]. - Net income attributable to Planet Fitness, Inc. for Q2 2024 was $48,640, up 18.3% from $41,135 in Q2 2023[11]. - Basic net income per share for Q2 2024 was $0.56, compared to $0.49 in Q2 2023, reflecting an increase of 14.3%[11]. - Total operating costs and expenses for Q2 2024 were $213,562, a slight increase from $209,461 in Q2 2023[11]. - The company reported a total comprehensive income of $48,651 for Q2 2024, compared to $44,214 in Q2 2023, representing an increase of 10.5%[13]. - Net income for the period ending June 30, 2024, is reported at $49,312,000, reflecting a significant increase compared to previous periods[23]. - Net income for the six months ended June 30, 2024, was $84,285,000, an increase from $68,948,000 in the same period of 2023, representing a growth of approximately 22.1%[17]. - Adjusted net income for Q2 2024 reached $62,167 thousand, up 7.2% from $57,665 thousand in Q2 2023[112]. - Adjusted net income for the first half of 2024 was $109,427 thousand, a 16.3% rise from $94,056 thousand in the first half of 2023[115]. Assets and Liabilities - As of June 30, 2024, total assets increased to $2,974,040 thousand from $2,969,693 thousand as of December 31, 2023, reflecting a growth of approximately 0.15%[9]. - Cash and cash equivalents decreased to $246,961 thousand from $275,842 thousand, a decline of about 10.5%[9]. - Total current liabilities rose to $272,126 thousand compared to $251,329 thousand, marking an increase of approximately 8.3%[9]. - Long-term debt increased significantly to $2,156,551 thousand from $1,962,874 thousand, representing a rise of about 9.8%[9]. - The accumulated deficit grew to $(910,626) thousand from $(691,461) thousand, indicating an increase of approximately 31.7%[9]. - Total stockholders' deficit attributable to Planet Fitness, Inc. increased to $(317,664) thousand from $(115,649) thousand, a rise of approximately 174.5%[9]. - As of June 30, 2024, the total equity deficit stands at $319,830,000, with an accumulated deficit of $910,626,000[19]. - The total debt, net of deferred financing costs, was $2,177,051 as of June 30, 2024, compared to $1,983,624 as of December 31, 2023[53]. Revenue Segments - Total revenue from corporate-owned stores for Q2 2024 was $125,466, up 10.3% from $113,759 in Q2 2023[11]. - Franchise segment revenue in the U.S. for Q2 2024 was $104,541, up 8.8% from $96,337 in Q2 2023[85]. - Corporate-owned stores segment revenue in the U.S. for Q2 2024 was $124,187, an increase of 10.4% from $112,618 in Q2 2023[85]. - Franchise segment revenue increased to $107,790,000 for the three months ended June 30, 2024, up 9.9% from $98,842,000 in the prior year[97]. - Corporate-owned stores segment revenue increased to $125,466,000 for the three months ended June 30, 2024, compared to $113,759,000 in the same period of 2023, reflecting a growth of 10.5%[97]. Membership and Store Growth - As of June 30, 2024, Planet Fitness has approximately 19.7 million members and operates 2,617 locations across various regions[26]. - The number of franchisee-owned stores increased to 2,358 as of June 30, 2024, from 2,230 a year earlier, marking a growth of 5.7%[95]. - Corporate-owned stores increased to 259 as of June 30, 2024, from 242 a year earlier, representing a growth of 7.0%[95]. - Planet Fitness opened 18 new stores in the three months ended June 30, 2024, compared to 26 new stores in the same period of 2023[100]. - The company had contractual commitments to open approximately 1,000 new stores as of June 30, 2024[95]. Cash Flow and Investments - Cash flows from operating activities for the first six months of 2024 were $167,948, compared to $157,330 in the same period of 2023, indicating a growth of 6.5%[17]. - The company reported a net cash used in investing activities of $90,436,000 for the six months ended June 30, 2024, a significant decrease from $201,021,000 in the prior year, indicating improved cash management[17]. - The company issued $800,000,000 in long-term debt during the six months ended June 30, 2024, to support its financing activities[17]. - Net cash provided by operating activities increased to $167,948,000 for the six months ended June 30, 2024, compared to $157,330,000 for the same period in 2023, reflecting a rise of about 6.5%[17]. Strategic Initiatives - The company is focused on expanding its franchise model, which is critical for revenue growth and operational profitability[5]. - Future growth strategies include new store development by existing and new franchisees, which is essential for increasing revenues and operating profits[5]. - The company anticipates continued growth through new store development and strategic partnerships, despite potential risks associated with competition and market conditions[4]. Accounting and Compliance - The company is evaluating the impact of new accounting standards effective after December 15, 2023, on its financial disclosures[34]. - The company was in compliance with its debt covenants as of June 30, 2024, with no material changes to debt obligations during the period[154].

Core Insights - Planet Fitness, Inc. reported strong second-quarter 2024 results, with adjusted earnings and revenues exceeding expectations and showing year-over-year growth [1][3] - The company's performance was bolstered by new store openings, increased royalty revenues, and an asset-light growth model, contributing to a rise in system-wide same-store sales [1][3] Earnings & Revenue Discussion - Adjusted earnings per share (EPS) reached 71 cents, surpassing the Zacks Consensus Estimate of 65 cents by 9.2%, and increased from 65 cents in the prior-year quarter [3] - Quarterly revenues amounted to $300.9 million, exceeding the consensus mark of $292 million by 2.9%, and improved 5.1% year over year, driven by a 4.2% increase in system-wide same-store sales [3] - Adjusted EBITDA was reported at $127.5 million, up from $118.9 million in the same quarter last year [4] Segmental Performance - Franchise segment revenues increased by 9.1% year over year to $107.8 million, driven by a $6.3 million rise in royalty revenues and contributions from new stores [5] - Corporate-owned stores generated revenues of $125.5 million, a 10.3% increase from $113.8 million in the prior year, attributed to new store openings and acquisitions [6] - Equipment segment revenues totaled $67.7 million, down 8.4% year over year, primarily due to lower sales to both new and existing franchisee-owned stores [7] Other Financial Details - As of June 30, 2024, Planet Fitness had cash and cash equivalents of $247 million, down from $275.8 million at the end of 2023, while long-term debt increased to $2.16 billion from $1.96 billion [8] 2024 Outlook Updated - The company expects revenues to grow in the 4-6% range from 2023 levels, with system-wide same-store sales projected to increase by 3-5% [9] - Adjusted EBITDA is anticipated to rise by 7-9%, while adjusted net income is now expected to increase by 4-6%, down from a previous forecast of 6-8% [10]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

Group 1: Earnings Performance - Planet Fitness reported quarterly earnings of $0.71 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and up from $0.65 per share a year ago, representing an earnings surprise of 9.23% [1] - The company posted revenues of $300.94 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.93%, compared to year-ago revenues of $286.46 million [2] Group 2: Market Performance - Planet Fitness shares have declined approximately 1.4% since the beginning of the year, while the S&P 500 has gained 8.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.60 on revenues of $288.23 million, and for the current fiscal year, it is $2.43 on revenues of $1.14 billion [7] Group 3: Industry Outlook - The Leisure and Recreation Services industry, to which Planet Fitness belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

1 IF D H HT T 100 - 100 1 i T 1 Pgiam/iStock via Getty Images Investment Thesis Planet Fitness (NYSE:PLNT) is a leading franchisor and operator of fitness centers that could benefit from the growing demand for affordable and accessible fitness solutions. PLNT has achieved significant growth in its membership base and store footprint over the years, given its slightly differentiated model that attracts a more unique gym 'customer'. The company operated -2,600 stores across at the end of Q. Its footprint is i ...

Core Viewpoint - The article emphasizes the importance of the VGM Score, which combines value, growth, and momentum styles to identify attractive investment opportunities, particularly in conjunction with the Zacks Rank [1][15]. Company Overview - Planet Fitness (PLNT) is a leading franchisor and operator of fitness centers in the United States, with approximately 19.6 million members and 2,599 stores across various regions, including the U.S., Canada, and Australia as of March 31, 2024 [8]. - As of December 31, 2023, about 90% of all franchise stores were owned and operated by franchisee groups [8]. Earnings Estimates - For fiscal 2024, three analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing to $2.43 per share [5]. Zacks Rank and Style Scores - The Zacks Rank utilizes earnings estimate revisions to help investors build successful portfolios, with a focus on stocks rated 1 (Strong Buy) or 2 (Buy) [6][7]. - Stocks with a 3 (Hold) rank should also have Style Scores of A or B to maximize upside potential [7]. - The Zacks Style Scores categorize stocks based on value, growth, and momentum characteristics, assigning ratings from A to F, where A indicates the best chance of outperforming the market [15][16]. Investment Recommendation - Planet Fitness is currently rated 3 (Hold) on the Zacks Rank but has a VGM Score of A, indicating strong potential for investors [19]. - The stock has a Momentum Style Score of A, with shares increasing by 1.9% over the past four weeks, making it a noteworthy option for momentum investors [21][22].

The shares of Planet Fitness Inc (NYSE:PLNT) are up 3.1% before the bell, after TD Cowen upgraded the recreation stock to "buy" from "hold" and raised its price target to $92 from $66. The analyst in coverage called PLNT a "top pick" and an "early turnaround play," saying its catalyst path is hard to ignore and pointed towards the upside to valuation. This bull note could cause a sentiment shift in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX ...