Planet Fitness Reports Strong Growth in 2023, Shares Drop

Planet Fitness, Inc. has reported its financial results for the fourth quarter and year ended December 31, 2023. The company announced a full-year system-wide same store sales increase of 8.7% and membership growth of 1.7 million since the end of 2022. In 2023, the company also opened 165 new Planet Fitness stores, bringing the system-wide total to 2,575 as of December 31, 2023.

Craig Benson, interim chief executive officer, stated, "In 2023, we proactively developed the new growth model to fuel long-term sustainable store growth and in recognition of the macro-economic environmental changes that have taken place since the pandemic. Focused on enhancing returns and reducing the capital requirements for opening and maintaining a Planet Fitness franchise location, the new growth model will provide our franchisees with additional flexibility to build their store portfolios for years to come."

Benson further commented on the company's outlook, stating, "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. Importantly, we are expanding our total store opportunity to 5,000 in the U.S. based on the results of our recently completed third-party studies, up from the 4,000 total store opportunity we communicated at the time of our initial public offering in 2015."

Financial highlights for the fourth quarter of fiscal 2023 include: Total revenue increased by 1.4% to $285.1 million. System-wide same store sales increased by 7.7%. Net income attributable to Planet Fitness, Inc. was $35.3 million, or $0.41 per diluted share. Adjusted net income increased by 12.5% to $53.1 million, or $0.60 per diluted share. * Adjusted EBITDA increased by 7.8% to $114.3 million.

For the fiscal year 2023, the company reported the following highlights: Total revenue increased by 14.4% to $1.1 billion. System-wide same store sales increased by 8.7%. Net income attributable to Planet Fitness, Inc. was $138.3 million, or $1.62 per diluted share. Adjusted net income increased by 34.0% to $199.0 million, or $2.24 per diluted share. * Adjusted EBITDA increased by 19.0% to $435.4 million.

Looking ahead to 2024, Planet Fitness expects new equipment placements of approximately 120 to 130 in franchisee-owned locations and system-wide same store sales in the high single-digit percentage range. The company also anticipates revenue, adjusted EBITDA, adjusted net income, and adjusted earnings per share to increase in the 6% to 7%, 10% to 11%, 9% to 10%, and 10% to 11% ranges, respectively. The company's shares have moved -3.6%, and are now trading at a price of $63.51.

The full 8-K submission can be accessed here.

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