PLNT Earnings: Planet Fitness Plunges After Outlook Disappoints

Planet Fitness (NYSE:PLNT) shares plunged by over 10% in the early trading session today after the fitness chain announced mixed first-quarter results and lowered its financial outlook.

During the quarter, PLNT’s top line rose by 11.6% year-over-year to $248 million. However, the figure lagged expectations by a thin margin of around $1.48 million. Its EPS of $0.53, on the other hand, fared better than estimates by $0.03.

PLNT’s Robust Growth

The company clocked system-wide same-store sales growth of 6.2% in Q1. It ended the quarter with nearly 19.6 million members. Importantly, PLNT’s Franchise revenue increased by 12.2%, and revenue from Corporate-owned stores shot up by 15.6% in Q1.

These gains were driven by higher royalty revenue, improved same-store sales, and new store openings (it had a total of 2,599 stores at the end of March).

Overshadowed by Weak Outlook

This top-line gain was accompanied by a nearly 30% jump in the company’s bottom line. Still, PLNT shares are under pressure today after the company lowered its financial outlook.

For the full year, PLNT now expects system-wide same-store sales growth of 3%-5%, compared to the prior estimate of 5%-6% growth. Revenue for the year is seen rising by 4%-6% versus the prior outlook of a 6%-7% increase. Moreover, PLNT estimates a 7%-9% increase in its adjusted EPS. It previously anticipated an increase of 10%-11%.

What Is the Stock Price Forecast for Planet Fitness?

Today’s price erosion comes on top of a nearly 15% decline in PLNT’s share price so far this year. In recent times, the company has faced criticism for its transgender policy. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average PLNT price target of $73.50. However, analysts’ views on the stock could see revisions following its earnings report today.  

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