MW Planet Fitness shares stumble as outlook points to slower earnings growth

By Tomi Kilgore

Earnings for the latest quarter rose more than expected, but the downbeat outlook was hurting the stock

Shares of Planet Fitness Inc. were headed lower in early trading Tuesday, as the gym operator beat fourth-quarter earnings expectations but provided a full-year outlook that was below Wall Street's projections.

And while the growth in same-club sales, or sales at gyms open at least a year, is set to increase this year, analysts surveyed by FactSet were modeling more.

The stock (PLNT) reversed an earlier post-earnings-report gain to fall 1.3% in premarket trading. That puts it on track to snap a four-quarter streak of post-earnings gains.

The company expects 2025 adjusted earnings per share, which excludes nonrecurring items, to increase in the 11% to 12% range.

Meanwhile, 2024 adjusted EPS rose 15.6% to $2.59. So the growth guidance would imply 2025 EPS of $2.87 to $2.90, which is below the current FactSet consensus of $2.94.

Same-club sales are expected to grow 5% to 6%, which would be better than 2024's growth rate of 5% but below the FactSet consensus of 6.4%.

The outlook comes as the company continues to work on redefining its brand and accelerating club openings. The company had announced management changes earlier this month in an effort to boost the "non-intimidating, high-value member experience" at its gym clubs.

For the fourth quarter to Dec. 31, net income rose to $47.1 million, or 56 cents a share, from $35.3 million, or 41 cents a share, in the same period a year ago.

Adjusted EPS rose 16.7% to 70 cents, to beat the FactSet consensus of 62 cents.

Revenue grew 19.4% to $340.5 million, above the FactSet consensus of $324.7 million, and same-club sales increased 5.5% to beat expectations of 5% growth.

The results got a year-over-year boost from the 50% increase for the classic membership to $15 that was implemented during the third quarter. That marked the first price increase since 1998.

The stock closed Monday 9% below its Jan. 30 record close of $109.07 but has rallied 55.8% over the past 12 months. In comparison, the S&P 500 index SPX has gained 17.6% over the past year.

-Tomi Kilgore

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February 25, 2025 07:50 ET (12:50 GMT)

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