Membership Pricing Strategy

Discussed in Q1 2024 " " " , Q2 2024 " " , and Q4 2023 " " with various price tests, promotional adjustments, and tests balancing new versus legacy pricing.

Q3 2024 emphasized raising the new Classic Card membership price from $10 to $15 for new members to align with inflation, while legacy members remain at $10. " " "

Consistent focus with refined value positioning and alignment to inflation, building on earlier pricing test learnings.

Consumer Resistance

Addressed in Q1 & Q2 2024 " " using cautious promotional strategies; Q4 2023 had minimal explicit focus on resistance.

Q3 2024 noted a modest anticipated decline in membership due to the price increase—offset by improved rate growth and a higher mix of Black Card members—with initial consumer resistance moderating over time. " "

Managed pushback: Sentiment remains under control through strategic pricing adjustments and targeted promotions.

Cost Efficiency and Unit Economics Optimization

Q1 2024 " " " , Q2 2024 " " , and Q4 2023 " emphasized initiatives such as shifting the equipment mix and reducing build costs to enhance unit economics.

Q3 2024 detailed a 10% reduction in club build costs—achieved through a 30% reduction in cardio equipment and a shift toward a more balanced equipment mix—further optimizing unit economics. " "

Ongoing focus on efficiency: Initiatives continue to evolve with measurable cost reduction targets and improved operational economics.

Franchisee Economics and New Club Expansion

Highlighted in Q1 2024 " " , Q2 2024 " " , and Q4 2023 " " through the introduction of new growth models and plans to expand the club network.

Q3 2024 reiterated targets of opening 140–150 new clubs, leveraging retail closures and exploring smaller footprint clubs to drive new expansion while supporting franchisee profitability. " "

Stable expansion: Continued emphasis on franchisee returns and strategic market entry with consistent new club targets.

Membership Growth, Churn, and Retention Challenges

Q1 2024 noted challenges (e.g., social media backlash affecting churn) " " , Q2 2024 showed softer growth but improved cancel rates " " , and Q4 2023 recorded robust growth with improved cancel rates. " "

Q3 2024 reported approximately 19.6 million members, with the introduction of a click‐to‐cancel feature leading to an initial churn spike that has since moderated (except in Tennessee). "

Stable growth: Membership gains remain steady; churn management strategies are working, though regional retention challenges persist.

Brand, Marketing, and Leadership Initiatives

Q1 2024 introduced a new CEO and rebranding efforts " " ; Q2 2024 was focused on refining the brand promise and leadership hires " " " ; Q4 2023 emphasized Gen Z marketing and leadership transitions. " "

Q3 2024 outlined a redefined brand strategy targeting broader audiences, launched new social media campaigns, and announced key leadership transitions (including a new CFO appointment effective November 2024). " " "

Consistent modernization: Ongoing evolution of brand messaging and leadership structures to support growth and align with target demographics.

Financial Performance Metrics and Adjusted Guidance

Q1 2024 provided detailed metrics and conservative guidance " " ; Q2 2024 reported moderate growth figures " " ; Q4 2023 delivered upward revisions in guidance along with strong metrics. "

Q3 2024 reported increased revenue, a 4.3% same-club sales growth, and improved adjusted EBITDA along with raised full-year guidance—reflecting a stronger-than-expected performance. " "

Improving performance: Financial metrics show upward momentum with tightened and more optimistic guidance compared to prior periods.

Real Estate Constraints and Development Challenges

Q1 2024 " and Q2 2024 " discussed tight retail space availability and longer development timelines; Q4 2023 elaborated on limited retail space, competition for sites, and the exploration of smaller format clubs. " " "

Not mentioned in Q3 2024.

Persistent challenge: Although not discussed in Q3, prior periods highlight ongoing constraints leading to strategic shifts toward smaller club formats.

International Expansion Opportunities

Q1 2024 " emphasized the Spanish market; Q2 2024 focused on Spain’s pipeline and disciplined site selection " " ; Q4 2023 announced entry into Spain with plans for a large-scale rollout. " "

Q3 2024 expanded the international focus to include Mexico, Australia, and Canada—in addition to Spain—with plans to achieve scale, density, and market leadership across these diverse regions. " "

Broadening focus: A steady international strategy now embraces additional markets, diversifying beyond the initial focus on Spain while maintaining long-term growth ambitions.

Gen Z Membership Trends

Q1 2024 mentioned Gen Z via initiatives like the High School Summer Pass " ; Q2 2024 identified Gen Z as the fastest-growing segment and highlighted strong conversion rates " " ; Q4 2023 reported that Gen Z comprises over 25% of members with evolving membership behaviors. " " "

Q3 2024 highlighted that Gen Z along with millennials now represents the largest portion of new memberships, influencing club formats and equipment mix to better cater to their lifestyle and fitness expectations. "

Consistent upward trend: Gen Z continues to grow significantly, shaping strategic decisions and driving targeted marketing and club design innovations.

Regulatory Impacts on Membership Churn (FTC Click-to-Cancel Rule)

Not mentioned in Q1 2024, Q2 2024, or Q4 2023.

Q3 2024 introduced discussion of the FTC-mandated click-to-cancel feature, which initially caused a small spike in churn that later moderated (with the exception of elevated churn in Tennessee). "

Newly emerged topic: Regulatory impacts are now influencing membership churn dynamics, prompting adjustments as the feature normalizes overall cancellation rates.