In this clip from "3-Minute Stock Updates" on Motley Fool Live, recorded on July 29, Motley Fool contributors Toby Bordelon and Ryan Henderson discuss gym chain Planet Fitness' (PLNT) recent development deal in New Zealand, and whether the company's international expansion could drive future growth.
Toby Bordelon: Do you think the international expansion could be a growth driver of Planet Fitness going forward, did they go beyond this or is this maybe a one-off thing here?
Ryan Henderson: I think they can. Well, I think New Zealand itself might not have a large enough population to be just a huge growth driver and move the needle for them but I think international, overall can. I think Australia points to that, at least their success there.
The other thing I'll say is that while I think this strategy works everywhere and I think it has a customer demographic everywhere, I don't necessarily think you need this. I don't think you need international expansion to make this a successful investment. They say they think they can reach 4,000 stores in the U.S. alone. Prior to COVID, they had 53 consecutive quarters of systemwide same-store sales growth. You combine domestic store expansion, which is basically doubling store expansion in the U.S., plus consistent same-store sales growth. I think you've got a blueprint for good returns there. Assuming they're able to keep profit margins pretty steady.
