Planet Fitness(PLNT) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $186.7 million, compared to $111.9 million in Q1 2021, reflecting significant growth across all segments [37][41] - Adjusted net income was $29.0 million, with adjusted net income per diluted share at $0.32, compared to previous figures [41] - Adjusted EBITDA increased to $77.3 million from $43.7 million year-over-year [41] Business Line Data and Key Metrics Changes - Same-store sales growth was 15.9% in Q1 2022, with franchise same-store sales growing 15.8% and corporate same-store sales increasing 17.0% [34] - The equipment segment revenue increased by 206%, driven by higher equipment sales to new and existing franchisee-owned stores [39] - The average royalty rate increased to 6.4% from 6.3% [38] Market Data and Key Metrics Changes - The company ended Q1 2022 with a record high member count of 16.21 million, having added 37 new stores, a nearly 30% increase over Q1 2021 [7][34] - Approximately 30% of mature stores have fully rebounded to pre-COVID membership levels, with membership per mature store down only 6% from pre-COVID levels [36] Company Strategy and Development Direction - The company is focused on two main growth strategies: driving system-wide same-store sales and continued store expansion in various markets [15][25] - The launch of the High School Summer Pass program aims to attract Gen Z members and address teen mental health issues [16][20] - The company is expanding internationally, with agreements to open locations in New Zealand and Mexico, targeting markets with low gym membership penetration [26][27] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term growth opportunities, citing a strong appeal to millennials and Gen Z [6] - The company believes it is well-positioned for long-term growth despite potential economic challenges, with a resilient asset-light business model [53] - Management noted that the competitive landscape has changed, with many smaller gyms permanently closed, providing an opportunity for growth [60] Other Important Information - The acquisition of Sunshine Fitness is expected to enhance the corporate store team and diversify the geographic profile of corporate-owned stores [32] - The company has experienced challenges with marketing agency consolidation but believes long-term benefits will outweigh short-term disruptions [11][12] Q&A Session Summary Question: Thoughts on in-person fitness vs. at-home fitness trends - Management believes in-person fitness remains the key driver of health and wellness, with a significant rebound in gym attendance [58][60] Question: Strategy around member perks - The company aims to add value for members through various perks, enhancing the overall membership experience [62][66] Question: Outlook for same-store sales and membership joins - Management expects typical seasonality in membership joins, with pent-up demand likely influencing trends [71][72] Question: Franchisee enthusiasm amid recession concerns - Franchisees remain optimistic, with ongoing interest in expansion despite rising build-out costs [86][88] Question: International growth opportunities - The company is excited about international expansion, particularly in markets with low gym membership penetration [95][96]