Planet Fitness flexes financial muscles with strong Q2 results (PLNT)

Planet Fitness (NYSE:PLNT) gave an impressive performance in the second quarter with a new chief executive at the helm and a commitment to improve the guest experience and corporate culture. After facing a nationwide boycott in March and a change in ownership of a major franchisee, shares seem to reflect the upbeat outlook for the company with the stock gaining 7% at Tuesday’s open.

“As we enter our next chapter, we are committed to further defining our growth ambition and capitalizing on the meaningful opportunities across the industry both in the U.S. and internationally,” new CEO Colleen Keating said, adding, “I’m confident in our potential for long-term sustainable growth of stores and members, and our ability to deliver significant value for shareholders.”

The fitness chain earned an adjusted profit of $0.71 per share, up from $0.65 in the same quarter last year and 5 cents above expectations. The improved profitability was attributed to a 4.2% increase in system-wide same store sales that drove same store sales up 9% to $1.2B. Total revenue increased 5% to $300.9M, beating expectations by $10.2M.

By segment, franchise revenue increased 9.1% to $107.8M with $6.3M due to higher royalty revenue, $1.8M to new locations, and $1.3M from higher royalties on annual fees.

Revenue generated by corporate-owned stores increased 10.3% to $125.5M with $6.6M from corporate-owned stores included in the same store sales base, $1.9M from higher annual fee revenue, $2.9M to other fees, and $1.5M from new stores opened and acquired.

For FY24, Planet Fitness (PLNT) affirms guidance for revenue to increase in the 4%-6% range, adjusted EBITDA to increase by 7%-9%, and adjusted net income per share to increase by 7% to 9%. The street is looking for the company to earn a profit of $2.43 per share on $1.13B in sales for FY24.