Planet Fitness Reports Strong Second Quarter 2024 Results
Krissy Vann | Host, All Things Fitness and Wellness
Planet Fitness has released its financial results for the second quarter ending June 30, 2024, showcasing strong performance and strategic moves aimed at long-term growth and shareholder value.
Colleen Keating, who stepped into the CEO role in June, shared her excitement about the company’s future. "Since joining, I've become even more excited about Planet Fitness's potential," said Keating. "With a strong team, solid franchise base, and nearly 19.7 million members, we are well-positioned to continue our growth." During the quarter, Planet Fitness completed an $800 million refinancing transaction and launched a $280 million accelerated share repurchase program. Keating highlighted the strength of the company’s franchise model and its focus on enhancing shareholder value.
In the second quarter, Planet Fitness saw a 5.1% year-over-year increase in total revenue, reaching $300.9 million. System-wide same-store sales grew by 4.2%. The company reported net income attributable to Planet Fitness of $48.6 million, or $0.56 per diluted share, up from $41.1 million, or $0.48 per diluted share, in the same period last year. Adjusted net income rose to $62.2 million, or $0.71 per diluted share, compared to $57.7 million, or $0.65 per diluted share, in the previous year. Adjusted EBITDA increased by 7.2% to $127.5 million from $118.9 million in the prior year. The company also opened 18 new stores during the quarter, bringing the total to 2,617 locations, including 17 franchisee-owned and one corporate-owned store.
Breaking down segment performance, franchise segment revenue increased by 9.1% to $107.8 million, driven by higher royalty revenue and increased National Advertising Fund (NAF) revenue. Corporate-owned stores segment revenue rose by 10.3% to $125.5 million, supported by same-store sales growth and new store openings. However, equipment segment revenue decreased by 8.4% to $67.7 million due to lower sales to new and existing franchisee-owned stores.
Planet Fitness also executed a $280 million accelerated share repurchase agreement with Citibank, N.A., retiring approximately 3.1 million shares of its Class A common stock. The final number of shares to be repurchased will be determined based on the volume-weighted average stock price during the term of the transaction. As of June 30, 2024, approximately $75 million remains under the company's 2022 share repurchase program. The company’s board of directors approved a new share repurchase program of up to $500 million, contingent upon the completion of the ASR Agreement.
Looking ahead, Planet Fitness has reaffirmed its outlook for 2024. The company expects to place new equipment in approximately 120 to 130 franchisee-owned locations and open around 140 to 150 new stores system-wide. Additionally, they anticipate system-wide same-store sales growth in the range of 3% to 5%, revenue growth between 4% to 6%, adjusted EBITDA growth from 7% to 9%, and adjusted net income growth in the range of 4% to 6%. Adjusted net income per diluted share is expected to increase by 7% to 9%, based on approximately 86.5 million adjusted diluted weighted-average shares outstanding, including the shares projected to be repurchased under the ASR Agreement. The company also forecasts net interest expense for 2024 to be around $75 million, with capital expenditures increasing by about 25% due to the addition of more stores in its corporate-owned portfolio.
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