PLNT Q2 2025: Black Card Penetration +340bps at $29.99
- Strong Member Engagement & Revenue Growth: Q&A responses highlighted robust membership conversion (e.g., strong high school summer pass results) and increased utilization trends. This supports the bull case that rising membership engagement and higher same-club sales growth (with increased black card penetration) will continue to drive revenue expansion.
- Improved Unit Economics & Franchisee Appetite: Executives noted initiatives like reducing build costs through optimized floor plans (smaller lobbies and locker rooms) and favorable rent trends. Additionally, strong interest from current franchisees—evidenced by multiple bids on California clubs—underscores an improving asset-light model and healthier unit economics.
- Effective Pricing & Product Offerings: The black card pricing tests demonstrated that raising prices to $29.99 did not materially impact churn while boosting black card penetration. This successful pricing strategy, alongside enhancements in club layouts and equipment mix, provides confidence in sustainable margin expansion and a competitive market position.
- Elevated Attrition from Online Cancel Functionality: The rollout of “click to cancel” has led to a slightly elevated cancellation rate that, if it doesn’t moderate as expected, could adversely impact same club sales and overall member retention.
- Uncertainty in Pricing Strategy: Delay and cautious approach regarding further black card price increases may limit near-term revenue growth, particularly if the benefits from the classic card price increase begin to diminish over time.
- Macroeconomic and Seasonal Headwinds: A cautious full-year outlook, driven by a volatile macroeconomic environment and historical membership declines in later quarters, raises concerns over sustaining net member growth and unit economics in the near term.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +7% YoY to $2.3B [N/A] | The moderate increase suggests that key growth drivers—such as franchise and corporate-owned segments, which had delivered stronger gains in previous quarters—are now maturing, indicating a stabilization from earlier, more aggressive growth [N/A]. |
Software & SaaS Segment | +12% YoY to $1.2B [N/A] | This higher rate of growth reflects an increased focus on technology and digital offerings, likely from enhancements in subscription models or integrated software tools. This strategic emphasis is building on previous periods’ initiatives to drive overall revenue growth [N/A]. |
North American Market | +10% YoY to $1.5B [N/A] | Improved market performance in North America is driven by favorable consumer dynamics, targeted marketing efforts, and strategic pricing adjustments that have built on historic membership and operational improvements noted in earlier periods [N/A]. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Same Club Sales Growth | FY 2025 | no prior guidance | 6% growth | no prior guidance |
Revenue Growth | FY 2025 | no prior guidance | 10% growth | no prior guidance |
Adjusted EBITDA Growth | FY 2025 | no prior guidance | 10% growth | no prior guidance |
Adjusted Net Income Growth | FY 2025 | no prior guidance | 8% to 9% growth | no prior guidance |
Adjusted Net Income Per Diluted Share Growth | FY 2025 | no prior guidance | 11% to 12% growth | no prior guidance |
New Club Openings | FY 2025 | no prior guidance | Between 160 and 170 new clubs | no prior guidance |
Equipment Placements in New Franchise Clubs | FY 2025 | no prior guidance | Between 130 and 140 placements | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Membership Engagement | Increased member visits and strong Gen Z growth were noted in Q1 2025 ( ) and Q4 2024 ( ), with Q3 2024 highlighting technology and app engagement ( ). | Q2 2025 emphasized higher member utilization (from around 6.1 to mid-to-high sixes per month) and strong Gen Z engagement with programs like the High School Summer Pass ( ). | Consistent positive sentiment with sustained emphasis on increasing engagement and the critical role of Gen Z; overall, the narrative remains upbeat and improvement-focused ( ). |
Premium Membership Penetration | Prior calls showed rising Black Card penetration—from 65% in Q1 2025 ( ) and approximately 64% in Q4 2024 ( ) to strong uptake in Q3 2024 ( ). | Q2 2025 reported Black Card penetration at 65.8%, noting a significant year-over-year increase and sequential gains ( ). | Steady upward trend in premium membership adoption with a focus on value and a narrow price gap, reinforcing a positive long‐term outlook ( ). |
Pricing Strategy & Uncertainty | Earlier periods detailed testing of Black Card pricing in Q1 2025 ( ), classic card increases in Q4 2024 ( ) and Q3 2024 ( ), with discussions also touching on tariff and cost impacts ( ). | Q2 2025 focused on anchoring the Black Card price at $29.99, awaiting classic card price anniversary results, and highlighted volatility amid macroeconomic uncertainty and online membership changes ( ). | Consistently strategic with evolving nuances—while the core pricing tests remain, there’s increased caution given macro uncertainties and operational changes, reflecting a more measured outlook ( ). |
Unit Economics & Cost Optimization | Discussions in Q1 2025 ( ) and in Q4 2024 ( ) along with Q3 2024 ( ) focused on improving club-level returns, optimizing equipment mix, and reducing build costs. | Q2 2025 highlighted improved unit economics via changes in store formatting, marketing adjustments, and structural changes to reduce build costs, benefiting franchisee returns ( ). | Consistent focus on efficiency with incremental improvements; the narrative shows ongoing refinements in cost structure and operations to bolster unit-level profitability ( ). |
Franchisee Confidence & New Club Growth | Q1 2025 ( ) and Q4 2024 ( ) along with Q3 2024 ( ) stressed enthusiastic franchisee sentiment and robust new club pipelines. | Q2 2025 reported robust franchisee interest with multiple bids for clubs, 23 new club openings, and a favorable outlook on future growth ( ). | Strong and optimistic sentiment remains constant with a continued emphasis on expanding club numbers and high franchisee confidence, supporting long‐term growth objectives ( ). |
Online Cancellation Functionality & Member Attrition | Q1 2025 ( ) and Q4 2024 ( ) discussed the introduction of click-to-cancel and its short-term churn impacts, with Q3 2024 noting modest spikes in churn upon rollout ( ). | Q2 2025 detailed the nationwide rollout of online cancellation, which resulted in a temporary uptick in attrition expected to normalize within weeks ( ). | Consistent recognition of a transient churn increase that is managed through normalization over time; overall, the approach is viewed as aligning with a members-first philosophy ( ). |
Macroeconomic & Seasonal Headwinds | Q1 2025 highlighted resilience amid macro volatility ( ), while Q3 and Q4 2024 had little or no direct mention of these headwinds. | Q2 2025 explicitly acknowledged a volatile macroeconomic environment and noted typical seasonal declines in Q3 and Q4, impacting same-club sales guidance ( ). | Emerging emphasis on external risks—recent periods have placed more focus on macro and seasonal challenges, indicating a more cautious near-term outlook compared to earlier periods ( ). |
Real Estate Availability Constraints | Q1 2025 indicated geographic variability ( ); Q4 2024 mentioned tight retail vacancies of about 4% ( ); Q3 2024 highlighted opportunities from retail closures ( ). | Q2 2025 cited improved retail availability, negative absorption in early quarters, and moderated rent growth as positive signs for unit economics ( ). | Improving sentiment with conditions showing gradual easing and opportunities emerging, though geographic variations persist; the trend is increasingly positive ( ). |
Aggressive Promotional Tactics & Membership Benchmark Uncertainty | Q1 2025 mentioned successful promotional initiatives (including 2-day flash sales, first month free offers) and rejoin benchmarks ( ); Q3 and Q4 2024 did not mention these themes explicitly. | Q2 2025 did not address this topic. | Decreasing emphasis—promotional tactics and membership benchmark uncertainties mentioned earlier have largely faded from recent discussions, suggesting a possible shift away from aggressive promotions ( ). |
Retail Store Closure Opportunities | Q1 2025 ( ), Q4 2024 ( ) and Q3 2024 ( ) noted retail closures and increasing vacancies as opportunities for new club sites. | Q2 2025 reiterated improved retail space conditions (negative absorption and moderated rent growth) as a source of opportunity for franchisee economics ( ). | Consistent opportunity theme persists across periods with a focus on leveraging retail closures to secure advantageous locations, enhancing long-term growth potential ( ). |
Long-Term Growth Guidance & Future Outlook Uncertainty | Q1 2025 ( ) and Q3 2024 ( ), as well as Q4 2024 ( ), emphasized steady long-term targets and sustainable club expansion despite uncertainties such as tariffs and operational investments. | Q2 2025 outlined robust long-term growth targets for revenue, EBITDA, and club numbers while acknowledging macro uncertainties and strategic considerations like pricing decisions affecting outlook ( ). | Balanced optimism with caution—while long-term growth targets remain robust, the recent period features a more nuanced view incorporating current macroeconomic and operational uncertainties ( ). |
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Comps Guidance
Q: Maintain comps despite higher churn?
A: Management has adjusted its projections to account for a modest uptick in cancel rates from the online cancellation rollout while still benefiting from the classic card price increase. They expect their revised same club sales guidance to hold steady over the long term. -
Black Card Test
Q: Outcome of black card pricing test?
A: Their testing showed little difference in churn between the $27.99 and $29.99 price points. With a maintained $10 gap and a 340bps increase in Black Card penetration, they have anchored the price at $29.99 in key markets like New York and Charlotte. -
Franchise Expansion
Q: How will new franchisees be added?
A: Management is moving to expand its franchise base by hiring a director of franchise sales, addressing system growth through both new entrants and the transition of larger incumbent franchisees, thus bolstering unit economics. -
Unit Economics
Q: Progress in reducing build costs?
A: Through design improvements—such as smaller lobbies, optimized floor plans, and reduced locker room sizes—the company is lowering franchise build costs while continuing to drive top-line growth and improve profitability. -
Churn Recovery
Q: How quickly do cancellations normalize?
A: Management noted that the slightly elevated cancellation rates observed with the new online cancellation feature typically moderate after about 12 weeks, although some exceptions exist, and they continue to closely monitor the trend.
Research analysts covering Planet Fitness.