What's Going On With Planet Fitness Shares Today?

Planet Fitness Inc PLNT reported fourth-quarter fiscal 2023 sales growth of 1.4% year-over-year to $285.1 million, marginally beating the consensus of $285.04 million.

System-wide same-store sales increased 7.7%. Revenue from the Franchise segment rose 13.9% Y/Y to $98.2 million, the Corporate-owned stores climbed 15.9% to $116.4 million, and Equipment declined 25.5% Y/Y to $70.4 million.

Total operating costs and expenses decreased 1.45% Y/Y to $213.73 million. The operating margin was 25%, up 214 bps YoY, and operating income for the quarter rose 10.8% to $71.36 million.

Adjusted EBITDA increased 7.8% Y/Y to $114.33 million, and margin expanded 240 bps to 40.1%. Adjusted EPS was $0.60, beating the consensus estimate of $0.58. 

Planet Fitness opened 77 new stores system-wide during the period, bringing the system-wide total stores to 2,575 as of December 31, 2023.

“While we believe that 2024 will be a transition year as our franchisees incorporate the changes into their growth plans, given our consistent and predictable asset-light model, we believe that we can deliver between 10 and 11 percent adjusted EBITDA growth, enabling us to generate significant cash flow to invest in the business and return capital to shareholders via our share repurchase program,” commented Craig Benson, Interim Chief Executive Officer.

The company held $397 million in cash and equivalents as of December 31, 2023. Operating cash flow for the fiscal totaled $330.25 million, compared to $240.21 million a year ago.

Additionally, Planet Fitness announced that Tom Fitzgerald, the company’s Chief Financial Officer, has decided to retire at the end of August 2024.

2024 Outlook: Planet Fitness expects revenue growth of 6%-7%, adjusted EBITDA growth of 10%-11% and adjusted EPS to increase 10%-11%. Planet Fitness sees new equipment placements of ~120 to 130 in franchisee-owned locations and System-wide same-store sales in the high single-digit percentage range.

The company expects capital expenditures to increase ~25%, driven by additional stores in its corporate-owned portfolio, and depreciation and amortization to increase in the 11% to 12% range.

The company recently disclosed in a regulatory filing that, on February 15, 2024, Christopher Rondeau resigned from the board of directors. 

The company said it believes that Rondeau resigned from the board because of disagreements over decisions made by the company since his separation as chief executive officer in September 2023, including the decision to terminate the employment of approximately 9% of the company’s headquarters employees in February 2024, the scope of the role of the interim chief executive officer during the ongoing search for a permanent chief executive officer, and the board’s role in reviewing and approving such decisions.

Price Action: PLNT shares are trading lower by 2.89% at $63.96 on the last check Thursday.