Planet Fitness (PLNT -1.98%) reported first-quarter results on May 2. First-time gym users continue to flock to the company's popular fitness centers, prompting management to boost its financial outlook for the year ahead.
Planet Fitness results: The raw numbers
|
Metric |
Q1 2017 |
Q1 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$91.1 million |
$83.3 million |
9.3% |
|
Adjusted EBITDA |
$42.3 million |
$34.3 million |
23.3% |
|
Adjusted net income |
$18.4 million |
$15.2 million |
21.2% |
Data source: Planet Fitness Q1 2017 earnings press release. EBITDA = earnings before interest, taxes, depreciation, and amortization.
Image source: Planet Fitness.
What happened with Planet Fitness this quarter?
Planet Fitness opened 54 new stores in the first quarter -- up from 48 locations in the year-ago period -- bringing its total store count to 1,367 as of March 31, 2017.
Systemwide same-store sales jumped 11.1%, marking the gym chain's 41st consecutive quarter of positive same-store sales and third straight quarter of double-digit comp growth.
CEO Christopher Rondeau highlighted some of the reasons for Planet Fitness' success during a conference call with analysts:
There are a number of factors fueling our comp performance, including what we believe are some significant competitive advantages. It starts with our welcoming, nonintimidating environment featuring high-quality branded cardio and strength [equipment]. The fact that we are able to offer our differentiated, superior in-store experience for only $10 per month is incredibly compelling to our target audience of casual and first-time gym users.
In all, Planet Fitness added more than 1.2 million net new members during the first three months of 2017, pushing it past 10 million members in total. Moreover, approximately 40% of these members are first-time gym-goers. "We believe we are clearly growing the overall market by successfully targeting the approximately 80% of the U.S. population and Canada that currently does not belong to a gym," Rondeau said.
This strong membership growth helped to fuel a 33% increase in Planet Fitness's franchise segment revenue, to $36.8 million. In turn, franchise EBITDA leapt 35% to $32 million.
All told, Planet Fitness's adjusted net income rose 21.2% year over year to $18.4 million, or $0.19 per share.
Looking forward
These results prompted Planet Fitness to raise its 2017 full-year outlook, including:
- Systemwide same-store sales growth of 7% to 8%, compared to previous estimates of 6% to 8%.
- Adjusted net income of $73 million to $76 million, up from $71 million to $74 million.
- Adjusted earnings per share of $0.74 to $0.77, versus $0.72 to $0.75.
"With approximately 1,000 new stores scheduled to open in the next 5 years," added Rondeau, "combined with our growing national and local advertising spend, we are confident that we'll continue to be successful in attracting more and more first-time and casual gym users to Planet Fitness."
