Please ensure Javascript is enabled for purposes of website accessibility

Why Planet Fitness, Inc. Stock Popped Today

By Steve Symington - Updated Feb 23, 2018 at 3:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gym operator pumped out a beefy fourth quarter, lifted its buyback program, and offered strong forward guidance.

What happened

Shares of Planet Fitness Inc. (PLNT 6.12%) were up 10.3% as of 2 p.m. EST Friday after the fitness center operator announced strong fourth-quarter 2017 results.

Planet Fitness' revenue climbed 15.1% year over year to $134 million, which translated to 19.1% growth in adjusted net income to $23.5 million, or $0.24 per share. Both the top and bottom lines arrived comfortably ahead of expectations for adjusted earnings of $0.23 per share on revenue of $131.1 million.

Planet Fitness gym location storefront


So what

Perhaps most impressive, Planet Fitness' systemwide same-store sales increased 11.6% -- the metric's largest percentage increase of the year and its 11th straight year of positive results. Planet Fitness also opened a company-record 210 new locations over the past year, adding 1.7 million net new members in 2017.

"Our business has continued to accelerate," added Planet Fitness CEO Christopher Rondeau, "which is a testament to the growing strength of our brand and the appeal of our affordable, non-intimidating fitness offering, especially with casual and first-time gym users."

If that wasn't enough, Planet Fitness announced an $80 million increase to its share-repurchase program, bringing its total authorization to $100 million.

Now what

Planet Fitness expects total revenue to increase roughly 20% in 2018 -- to just under $516 million -- assuming a high-single-digit percentage increase in systemwide same-store sales. That should result in an approximately 40% increase in adjusted net income, to roughly $1.18 per share. This outlook compares favorably to consensus estimates calling for 2018 revenue and adjusted earnings of $477.9 million and $1.09 per share, respectively.

With a better-than-expected fourth quarter, increased buyback program, and healthy outlook, there was little not to love about this impressive report from Planet Fitness. And it's no surprise to see the stock trading at a fresh 52-week high in response.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Planet Fitness, Inc. Stock Quote
Planet Fitness, Inc.
$71.62 (6.12%) $4.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.