"You belong." 

That's the simple message that Planet Fitness (NYSE:PLNT) conveys to its members, many of whom are first-time gym users.

And it's working.

The popular fitness-center chain is expanding its store base at a rapid clip while enjoying surging sales and profits.

Planet Fitness results: The raw numbers 

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$97.496 million

$87.007 million

12%

Adjusted EBITDA

$43.364 million

$35.424 million

22%

Adjusted EPS

$0.19

$0.16

19%

Data source: Planet Fitness Q3 2017 earnings press release

People working out with weights

People of all ages and fitness levels are flocking to Planet Fitness' gyms. Image source: Getty Images.

What happened with Planet Fitness this quarter?

Total revenue rose 12.1% to $97.5 million, as Planet Fitness continued its aggressive expansion strategy. The fitness chain opened 31 new locations in the third quarter -- and 190 over the past year -- bringing its total store count to 1,432 as of Sept. 30, 2017.

Importantly, there are no signs that these new locations are cannibalizing sales at existing gyms. In fact, Planet Fitness' systemwide same-store sales surged 9.3% in the third quarter.

That helped to drive margin expansion, which in turn fueled a 22.4% jump in adjusted EBITDA, to $43.4 million, and a 17.9% increase in adjusted net income, to $18.7 million, or $0.19 per share.

"With the increased brand awareness and reach of our welcoming, non-intimidating fitness offering combined with our asset-light business model that includes our fast-growing, high-margin franchise segment, we continue to expand market share and generate significant profitability and cash flow," CEO Christopher Rondeau said in a press release.

Looking forward

These strong results prompted Planet Fitness to lift its 2017 full-year financial guidance, which now includes:

  • Total revenue of $425 million and $430 million, up from a previous estimate of $409 million to $415 million.
  • Systemwide same-store-sales growth of 5% to 10%, up from 8% to 9%.
  • Adjusted EPS of $0.80 to $0.82, versus $0.76 to $0.78.

In addition, Rondeau highlighted several of the powerful opportunities that lie ahead for the fitness chain.

While this year marks Planet Fitness' 25th anniversary, I believe we are just beginning to scratch the surface of the company's full potential. My optimism is fueled by the long runway for store growth, the financial and operational strength of our franchisees, our growing national advertising fund and ability to continue to attract casual and first-time gym users to our unique fitness experience, and the growing consumer shift toward health and wellness.

Planet Fitness' low-cost memberships and welcoming environment have helped it become the most popular gym in America.  And with more people becoming aware of the benefits of more active lifestyles every day, its business should only continue to grow stronger in the coming years.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Planet Fitness. The Motley Fool has a disclosure policy.