Planet Fitness Raises New Member Price After Tough, Controversy-Filled Q1

Zinger Key Points
  • Planet Fitness plans to increase the price of new basic memberships from $10 to $15 in the summer.
  • The 50% price hike comes amid strains on consumer spending throughout the economy.

For the first time in over 25 years, Planet Fitness Inc. agreed to raise the price of its basic gym membership after reporting disappointing earnings.

What Happened: According to CNN, executives announced their plan to raise the price of their basic membership from $10 to $15 on Thursday. The price hike will take effect for new members in the summer.

Planet Fitness priced its basic membership, a hallmark of its attempt to attract first-time gym users, at $10 a month for one location since 1998.

The announcement comes as companies in virtually every industry respond to inflation by hiking prices and putting further financial strain on consumers.

"We've seen in every industry people move in price," interim CEO Craig Benson said on a Thursday first-quarter conference call. "So, it is not going to come as a shock to anybody that we are moving a price that's been in effect for a long, long time."

See Also: Planet Fitness Has Been ‘Pretty Much Destroyed,’ Says Company Founder Amid Speculation On Boycott Cancellations

Why It Matters: The Hampton, New Hampshire-based gym franchise had a rough first quarter. Known for its “judgment-free” mantra, the business faced calls for boycotts after a controversy regarding the company’s gender-inclusive policies.

According to Google Trends, there was a 2800% increase in inquiries such as “how to cancel Planet Fitness membership.”

The chain touts 2,455 U.S. locations. It reported earnings of 41 cents per share on May 9. It missed street estimates of 50 cents per share. Despite missing estimates, its share price rose amid new store openings and optimistic analyst ratings.

Price Action: Shares of Planet Fitness were priced at $64.96 per share, down 0.4%, at last check Friday.

Now Read: Planet Fitness Feels The Burn – Gym Chain Lowers Outlook Amid Tough Q1, Eyes Recovery

Image: Shutterstock

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