Planet Fitness Increases Membership Prices After Nearly 3 Decades – RetailWire

Despite there being a growing amount of cost-conscious consumers, Planet Fitness is raising its base membership fee for new customers for the first time since 1998.

In line with its quarterly earnings report, the gym announced on Thursday that new members signing up for the Classic card membership at Planet Fitness will be charged $15 per month starting this summer. Current members will maintain their $10 monthly rate for as long as they hold their memberships.

Tom Fitzgerald, the company’s outgoing chief financial officer, said, “It will take some time for the benefit of the price change to expand our store level margins as the price increase will only be on new classic card membership.”

This shift follows many months of price testing in different markets across the nation. The gym also said that this summer it plans to experiment with increased pricing for its premium membership tier, the Black Card. This membership, which starts at $24.99 per month, gives members access to all Planet Fitness facilities, along with digital content and additional perks.

The choice to increase fees follows a weaker-than-anticipated first-quarter revenue report and a downward revision of fiscal year guidance by the company. This is a different outlook from competitor Life Time Holdings, which recently exceeded revenue expectations and demonstrated robust membership growth in its latest quarter.

The customer base at Life Time is skewed old and more wealthy in comparison to the clientele at Planet Fitness, which targets the younger, price-conscious market.

Planet Fitness CEO Craig Benson noted that various macroeconomic factors have influenced a consumer base that is becoming more mindful of costs. He said, “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.”

He also mentioned that the company’s national advertising campaign did not connect with consumers as widely as expected.

Despite the cautionary statement, analysts remain optimistic about the company’s future prospects.

Analyst at Piper Sandler, Korinne Wolfmeyer, said, “Despite lowered guidance, results today were not as weak as feared. And we’ve now seen two key changes occur that have been needed to recharge shares, including a new CEO and White Card pricing.”