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Why Planet Fitness Stock Jumped Today

By Joe Tenebruso – Nov 4, 2021 at 3:54PM

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People are returning to gyms in droves.

What happened

Shares of Planet Fitness (PLNT 0.82%) climbed more than 12% on Thursday after the fitness center chain delivered strong third-quarter earnings. 

So what

Planet Fitness' revenue surged 46.4% year over year to $154.3 million. New store openings and a 7.2% rise in same-store sales helped the company pump out these impressive gains.

"We are emerging from the COVID-19 pandemic stronger than ever," CEO Chris Rondeau said in a press release. "In the third quarter, we returned to positive systemwide same-store sales growth and achieved the highest sequential net member growth of any third quarter in company history."

People are exercising in a gym.

Image source: Getty Images.

Planet Fitness also showed a marked improvement in profitability as its gyms reopened. The company's adjusted net income improved to $22 million, or $0.25 per share, compared to $1.6 million, or $0.02 per share, in the year-ago quarter.

Now what

These solid results and positive ongoing membership trends prompted Planet Fitness to offer a more optimistic full-year outlook. Management now expects:

  • Between 110 and 120 new store openings, compared to a previous forecast of 75 to 100.
  • Revenue of $570 million to $580 million, up from $530 million to $540 million.
  • Adjusted earnings per share of $0.75 to $0.80, up from $0.65 and $0.70.

Shareholders cheered the news. Planet Fitness' strong operational performance and heightened growth forecast helped to reduce fears that coronavirus-related concerns would drive people to exercise at home rather than in gyms.

Moreover, with vaccinations steadily increasing and COVID-19 case counts moderating, investors are growing more excited about Planet Fitness' stock -- and bidding up its share price in kind.

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

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