Planet Fitness Raises Classic Membership Fee for First Time in Over Two Decades
Krissy Vann | Host, All Things Fitness and Wellness
Planet Fitness reported mixed results for its first quarter of fiscal 2024, with growth in membership and revenue tempered by economic challenges. Craig Benson, Interim Chief Executive Officer, highlighted a solid increase in members, with the company concluding the quarter with approximately 19.6 million members and a 6.2 percent growth in system-wide same-store sales, mainly due to new member sign-ups. However, Benson also acknowledged several headwinds impacting the quarter, such as a consumer shift towards saving and heightened concerns over COVID infections. These factors led the company to adjust its full-year outlook downwards.
Financially, the quarter was strong with total revenue climbing 11.6% to $248.0 million from the previous year, and net income increasing to $34.3 million, or $0.39 per diluted share, from $22.7 million, or $0.27 per diluted share. System-wide sales grew to $1.2 billion, up from $1.1 billion, buoyed by both the franchise and corporate-owned segments. The equipment segment, however, saw a decline in revenue.
Despite these challenges, Benson remains positive about the company's strategic initiatives and the upcoming transition in leadership, with Colleen Keating set to take over as CEO in June. Keating's extensive experience is expected to further bolster the company's growth trajectory.
Looking ahead, Planet Fitness has adjusted its 2024 projections. System-wide same-store sales growth is now expected to be between 3% and 5%, with revenue growth anticipated to be in the 4% to 6% range. The company remains committed to opening between 140 to 150 new locations and placing new equipment in 120 to 130 franchisee-owned locations.
In addition to these developments, Planet Fitness announced a significant change to its membership pricing structure. For the first time since 1998, the price of its “classic” membership will increase from $10 a month to $15 a month for new members starting this summer. This membership allows access to one location. The price of the “Black Card” membership, which offers additional location access and perks, remains at $25 monthly, although the company is considering testing higher prices for this plan. While specific reasons for the price increase were not detailed, it comes at a time when higher interest rates and construction costs have impacted the pace of new gym openings. Planet Fitness is recognized for its low-cost, high-value gym offerings.
Elevate Your Expertise: Tune in to Our YouTube Channel for Exclusive Podcasts with fitness and wellness Industry Titans and Game-Changers
