Image source: Planet Fitness.

What: Shares of Planet Fitness Inc. (NYSE:PLNT) jumped 10% Friday after the fitness-center franchise released stronger-than-expected second-quarter 2016 results, and increased its outlook for the year.

So what: Quarterly revenue grew 15.9% year over year, to $91.5 million, driven by a combination of new locations and system-wide same-store sales growth of 7.6%. That translated to 27.5% growth in adjusted net income, to $16.8 million, or $0.17 per diluted share. 

More specifically, franchise segment revenue, including commission income, grew 34.7%, to $29.5 million, while corporate-owned stores segment revenue grew 5.6% over the same period, to $26.4 million. Meanwhile, equipment segment revenue rose 10.9%, to $35.6 million, driven by an increase in replacement equipment sales to existing franchisee-owned stores.

Planet Fitness CEO Christopher Rondeau noted the business showed signs of accelerating from an already-strong start to the year last quarter. Rondeau elaborated:

We continue to successfully attract new members to our affordable, non-intimidating fitness offering, including a large percentage of first time gym users. Membership growth at our legacy stores, as well as our newly opened locations, are fueling strong gains in our high-margin franchise segment. We believe this trend will continue as our group of well-capitalized franchisees is on schedule to open a record number of new stores this year, and we continue to leverage the power of our national advertising fund to drive brand awareness. We have never been more excited about the future growth prospects for Planet Fitness or as confident in the potential of our business model to drive significant long-term value for our shareholders.

Now what: Planet Fitness also increased its guidance for the full year, and now expects revenue between $366 million and $372 million (up from between $360 million and $370 million previously), total systemwide same-store sales growth in the high-single-digit range (up from mid-single digits before), and adjusted net income of $62 million to $65 million, or $0.63 to $0.66 per diluted share (up from previous guidance of $61 million to $64 million and $0.62 to $0.65 per share, respectively).

All things considered, this is a cut-and-dried "beat and raise" scenario from Planet Fitness. Assuming it can sustain its momentum going into the second half as franchisees remain on track to build new locations at a record pace, I see no reason the stock can't continue to rise from here.

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