Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (Before Market Open)
Pre-Earnings Price$72.01Last close (Aug 5, 2024)
Post-Earnings Price$75.00Open (Aug 6, 2024)
Price Change
$2.99(+4.15%)
- Planet Fitness has improved franchisee unit economics through a new growth model and a classic card price increase to $15, bringing unlevered IRR back to pre-COVID levels of approximately 30%, incentivizing franchisees to open new stores and potentially accelerating unit growth.
- The company is accelerating growth by building a strong leadership team, including searching for a Chief Development Officer and a Chief Marketing Officer, and refining their brand messaging and growth ambition to drive both unit and membership growth.
- Testing price increases on the Black Card membership shows potential to raise Average Unit Volume (AUV) sustainably, maintaining a balance between member growth and rate growth, which could enhance profitability without sacrificing member engagement.
- Deceleration in Adjusted EBITDA Growth: The company anticipates a slower growth rate in adjusted EBITDA in the second half of the year, following a strong first half where adjusted EBITDA was up 12%. This deceleration is partly due to timing shifts in equipment sales, which may raise concerns about the sustainability of growth momentum.
- Membership Growth Below Expectations: Member growth in Q2 was below expectations, affected by a softer start in early January and an incident in March that led to higher cancellations. The company admits that current membership levels are "below where we thought we would be", indicating potential challenges in attracting and retaining members.
- Slow Pace of Franchise Unit Development: The company is experiencing a slower pace in franchise unit growth, necessitating the search for a Chief Development Officer to accelerate expansion efforts. This suggests that accelerating unit growth may take time and that new store openings may not increase significantly in the near term.