Planet Fitness(US:PLNT)2024-05-09 17:25Financial Data and Key Metrics Changes - The company ended Q1 2024 with approximately 19.6 million members, achieving same-store sales growth of 6.2% and nearly 18% adjusted EBITDA growth [21][12] - Total revenue for Q1 was $248.0 million, up from $222.2 million, driven by growth across franchise and corporate-owned segments [58] - Adjusted EBITDA was $106.3 million, with an adjusted EBITDA margin of 42.9%, compared to $90.2 million and a margin of 40.6% in the previous year [58] Business Line Data and Key Metrics Changes - Franchise adjusted EBITDA was $76.1 million with a margin of 73.2%, while corporate store adjusted EBITDA was $42.4 million with a margin of 34.6% [32] - Equipment segment revenue decreased by 8.6%, primarily due to lower sales from equipment to franchisee-owned stores and fewer new store placements [32][13] Market Data and Key Metrics Changes - The company opened 25 new stores in Q1 2024 compared to 36 in the same period last year [12] - The average royalty rate increased to 6.6% from 6.5% [32] Company Strategy and Development Direction - The company plans to raise the price of the Classic Card from $10 to $15, effective for new members starting this summer, to enhance average unit volumes [7][11] - A new franchisee growth model was introduced to reduce capital requirements for opening and operating franchise locations [30] - The company is exploring refinancing a portion of its debt, anticipating a weighted average interest rate below 5% post-refinancing [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in Q1, including lower website traffic and a less effective advertising campaign, which contributed to lower net member growth than expected [4][22] - The company updated its 2024 guidance, expecting full-year revenue growth in the range of 4% to 6% and adjusted EBITDA growth of 7% to 9% [60][59] Other Important Information - The company announced the appointment of Colleen Keating as the new CEO, effective June 10, bringing over three decades of experience [8][27] - The company is ahead of schedule in reducing new unit and remodel build costs by at least 10% [9] Q&A Session All Questions and Answers Question: Does the guidance include any assumptions from the price hike to $15? - The price increase is factored into the guidance, but it is expected to have a limited immediate impact as it only affects new members [18][63] Question: How confident is the company that the pricing test did not affect joins? - The company feels confident that the results from the pricing tests were consistent and did not show significant anomalies due to external factors [41][42] Question: How does the company reconcile consumer sentiment with membership growth? - Despite broader market concerns about consumer spending, the company has seen little deviation in joins and cancels across different income brackets [76] Question: What is the outlook for membership attrition in Q2? - While the company does not guide on membership, it acknowledges that elevated attrition has been a factor in adjusting its outlook for same-store sales [87] Question: How does the company plan to address marketing effectiveness moving forward? - The company is focusing on a brand identity strategy that emphasizes the benefits of membership beyond just pricing [66][67]