If there's a youthful infusion at your local Planet Fitness (NYSE:PLNT) this summer, it's probably by design. The leading discount gym operator is offering teens between the ages of 15 and 18 free memberships that will run from May 15 through Sept. 1. The nationwide Teen Summer Challenge follows a successful rollout in its home state of New Hampshire last year.
Freebies are often a byproduct of desperation, but that's certainly not the case with Planet Fitness. The fitness center chain has come through with 48 consecutive quarters of positive comps, a stunning achievement when you consider the fickle nature of the gym business. It's also a genius move for a company that has rarely had a miscue. The stock has soared 357% since going public at $16 four summers ago.
Smells like teen spirit
Giving young adults access to a huge space full of workout gear may seem like a risky proposition at first. What if the teens approach the facility as a hangout spot, making Planet Fitness this summer's convenience store parking lot? What if inexperienced young 'uns mistreat the equipment or get hurt in the process? What if the juvenile freeloaders scare away paying adult members?
Let's dial all of those fears back for a moment. Planet Fitness already allows members as young as 13 into its gyms, so it's not as if we're breaking new ground here. Teens signing up for the summertime membership will still need a parent or guardian to accompany them during the initial visit to sign waivers. Also keep in mind that Planet Fitness had roughly 2,500 teens sign up for the program last summer in New Hampshire. If the promotion had been problematic last year, would Planet Fitness really be expanding it nationwide now?
This is a winner move. Planet Fitness gets to score praise in local communities for giving young teens something active to do during the sleepy summer months. There will also be some scholarships given out -- 51, to be exact -- so it gets to score more warm fuzzies for helping teens achieve more after high school. The scholarship sweepstakes may also be just the incentive to get folks to take an interest in their health.
Planet Fitness also benefits from exposing folks in their late teens to the inner workings of its well-maintained centers. How many of the likely tens of thousands who sign up this summer won't stick around when the freebie meter runs out come September?
The fast-growing company knows how to drum up interest outside of its cardio core audience. Earlier this month it offered in-gym hydro-massages -- to members and nonmembers alike -- for 10 days in the name of stress relief around the country's tax-filing deadline.
Planet Fitness is getting the job done. Revenue and adjusted earnings rose 30% and 38%, respectively, in its latest quarter, and we will get another financial update in two weeks. Planet Fitness began the year with 1,742 locations, and there's no reason to think that its run of positive comps will come undone anytime soon as the streak enters its thirteenth year. Hooking teens into the joys of a workout regimen -- its CEO signed up for his first gym membership when he was 16 -- is just the latest smart move by a brilliant market darling.