Planet Fitness (PLNT 0.05%) reported second-quarter results on Aug. 9. The fitness-center franchise is enjoying strong growth by catering to first-time and casual gym users.
Image source: Planet Fitness.
Planet Fitness results: The raw numbers
|
Metric |
Q2 2017 |
Q2 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$107.3 million |
$91.5 million |
17% |
|
Adjusted EBITDA |
$47.9 million |
$36.8 million |
30% |
|
Adjusted EPS |
$0.22 |
$0.17 |
29% |
Data source: Planet Fitness Q2 2017 earnings press release.
What happened with Planet Fitness this quarter?
Planet Fitness opened 37 new stores in the first quarter -- and 197 over the last year -- bringing its total store count to 1,403 as of June 30, 2017. Systemwide same-store sales leapt 9%, marking the gym chain's 42nd consecutive quarter of positive same-store sales growth. Together, that helped drive a 17% year-over-year jump in total revenue, to $107 million.
CEO Christopher Rondeau explained Planet Fitness' competitive advantage over its rivals during a conference call with analysts.
It starts with our Judgment Free Zone. Unlike other gym models, we're not about the fit getting fitter. We cater to the 80% of the population that doesn't have a gym membership, casual exerciser or first-time gym user that has never worked out before. Our welcoming, non-intimidating environment, combined with our affordable $10 price point is the winning formula for attracting approximately 7,000 members per location. Our differentiated offering is clearly enticing people to get off the couch to improve their health, evidenced by the fact that over 40% of our recent joins indicated they had never belonged to a gym prior to joining Planet Fitness.
Moreover, Planet Fitness is becoming more profitable as it expands, with adjusted EBITDA surging 30.3%, to $47.9 million. And adjusted net income increased 28.9%, to $21.7 million, or $0.22 per share.
Looking forward
These robust results prompted Planet Fitness to boost its 2017 full-year financial outlook, including:
- Total revenue of $409 million to $415 million, up from a prior forecast of $405 million to $415 million.
- Systemwide same-store sales growth of 8% to 9%, up from 7% to 8%.
- Adjusted EPS of $0.76 to $0.78 versus $0.74 to $0.77
Rondeau said in a press release:
Through our franchisees' new store openings along with over $100 million spent annually on national and local advertising programs, we continue to build on our leadership position by capturing additional market share as well as bringing new consumers into the fitness industry. I am confident that our compelling concept and powerful brand recognition combined with unmatched systemwide leadership and resources will allow us to capitalize on opportunities that drive long-term value for our shareholders.
