Gym outlet Planet Fitness Inc. (NYSE: PLNT) posted strong numbers for the most recently reported quarter. Revenue rose 11.6% year over year to $248 million, and same-store sales increased 6.2%. Earnings rose from $0.27 per share to $0.39.
The most important part of the earnings release was a new way for Planet Fitness to earn money. According to CNN, “Planet Fitness will raise the price of its ‘classic’ membership from $10 a month to $15 for new members beginning in the summer.” This type of membership gives people access to only one location. It has not raised this rate in over two decades.
The stock got a bump after earnings but is still down 11% this year to $55 per share. One reason is that the gym business is so competitive. Additionally, some members also left because of a dispute over a trans-inclusive bathroom policy, which triggered boycotts. (Check out a ranking of millennials’ 15 favorite brands.)
Why should investors believe Planet Fitness has a promising future? It is because of its “pricing power.” Few companies can raise the price of a service by 50% with confidence that it will not erode their customer base, but Planet Fitness clearly believes it can.
∴
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s made it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.