Services

Why Planet Fitness Is One of Wednesday's Biggest Earnings Winners

Chris Lange

Published: November 8, 2017 10:25 am

Last Updated: January 12, 2020 6:31 am

Planet Fitness Inc. (NYSE: PLNT) has only been public for a couple of years, but the stock is making a great case for itself with its most recent earnings report. The company reported its most recent results after the markets closed on Tuesday.

The fitness chain posted $0.19 in earnings per share (EPS) on $97.5 million in revenue, which compares with consensus estimates from Thomson Reuters of $0.16 in EPS and $93.7 million in revenue.

Systemwide same-store sales rose 9.3%. Separately, franchisee-owned same-store sales increased 9.6% and corporate-owned same-store sales increased 5.1%.

In terms of its segments, the company reported:

• Franchise segment revenue, which includes commission income, increased $8.3 million or 30.6% to $35.6 million from $27.2 million in the prior year period;
• Corporate-owned stores segment revenue increased $1.9 million or 7.1% to $28.6 million from $26.7 million in the prior year period; and
• Equipment segment revenue increased $0.3 million or 0.8% to $33.4 million from $33.1 million in the prior year period.

Looking ahead to the full year, the company expects to see EPS in the range of $0.80 to $0.82 and revenues between $425 million and $430 million, with systemwide same-store sales growth in the 9.5% to 10.0% range.

CEO Christopher Rondeau commented:

The strong top and bottom line momentum we generated during the first half of the year carried into the third quarter highlighted by a 9.3% increase in system-wide same store sales and earnings per share that exceeded expectations. With the increased brand awareness and reach of our welcoming, non-intimidating fitness offering combined with our asset-light business model that includes our fast-growing, high-margin franchise segment, we continue to expand market share and generate significant profitability and cash flow. While this year marks Planet Fitness’ 25th anniversary, I believe we are just beginning to scratch the surface of the Company’s full potential.

Shares of Planet Fitness were last seen up about 14% at $29.19, with a 52-week range of $18.32 to $30.01.