Planet Fitness (NYSE:PLNT) stands to have at least 10% of its revenue put at risk -- and probably a lot more -- now that the governors of New York, New Jersey, and Connecticut have ordered the closing of all gyms in the three states. The move was announced along with a larger array of pandemic-related measures that included restricting restaurants and bars to takeout, and limiting gatherings to 50 or fewer people.

Beginning at 8 p.m. Monday evening and continuing "until further notice," all gyms and fitness clubs in the tri-state area will close as the states attempt to limit the spread of the coronavirus.

People on treadmills

Image source: Planet Fitness.

All pain, no gain

According to Planet Fitness annual report, of the company's 2,001 locations, 98 of them are corporate-owned, and 42 of those are located in New York and New Jersey (there are none in Connecticut).

Its company-owned locations generated $159.7 million in revenue in 2019 -- over 23% of its annual revenues of $688.8 million, meaning those 42 stores provided about 10% of total revenue. But the impact will obviously be a lot greater because franchised Planet Fitness locations are more concentrated in the tri-state area than in most other parts of the country, and those gyms will not be contributing any revenue either.

Worse, corporate-owned stores also account for a quarter of Planet Fitness earnings before interest, taxes, depreciation, and amortization, or some $65.6 million. meaning the gym operator will see substantial losses as a result of this closure order.

Planet Fitness stock was down by about 30% in late afternoon trading Monday.