Planet Fitness Calls Peloton A Fad In Shot Across The Bow (Flex)

Fitness chain Planet Fitness Inc PLNT reported fourth quarter and full fiscal year results last week that showed the chain’s continued growth in the workout segment post COVID-19 pandemic shutdowns. The company sees its growth coming at the expense of rivals and it’s not afraid to take shots at the companies it competes with.

What Happened: Planet Fitness has been the subject of a short report that calls out its illegal billing operations and the difficulty of canceling memberships.

Aside from the short report, the company has seen strong membership growth and sales growth.

The company reported fourth-quarter revenue of $281.3 million, a year-over-year increase of 53.2%. The total came in ahead of a Street estimate of $272 million, according to data from Benzinga Pro.

The company’s earnings per share of 53 cents in the fourth quarter beat a Street estimate of 47 cents for the quarter.

Planet Fitness reported same-store sales were up 9.0% in the fourth quarter. The company ended the fourth quarter with 2,410 stores open.

For the full fiscal year, Planet Fitness had revenue of $936.8 million, a 59.6% year-over-year increase.

Same-store sales were up 11.4% in the fiscal year. The company opened 158 new stores in the fiscal year. Planet Fitness ended 2022 with around 17 million members, adding 1.8 million members since the end of 2021.

The results from the company saw several analysts raise their price targets on the stock. 

Related Link: Why This Planet Fitness Analyst Says Short Sellers Allegations Of Unethical Business Practices Lack Fundementals 

Beating the Competition: In a November presentation, Planet Fitness took a shot at the workout sector and its dominance with a slide.

“Fitness concepts and fads come and go,” the slide read.

The slide featured brick and mortar brands like F45 Training Holding FXLV, World Gym, Bally Total Fitness, Powerhouse Gym, Crossfit, Gold’s Gym and Orangetheory.

The slide also featured at-home workout brands like Peloton Interactive PTON, NordicTrack, Gazelle, The Beachbody Company BODY, P90X and Bowflex, a brand owned by Nautilus Inc NLS.

A look at the stock performance of Planet Fitness versus its peer companies shows that the idea that fitness concepts and fads don't last could ring true.

Beachbody shares are down 67.8% in the last year and trade under $1, a far cry from the $10 share price as part of its SPAC merger.

F45 went public at $16 per share in 2021 and has seen shares fall 85% in the last year to around $2 per share. The company’s shares have traded between $0.78 and $15.66 over the last 52 weeks. F45 counts actor Mark Wahlberg as an investor, and the company has been the subject of buyout offers below its former IPO price.

Bowflex is owned by Nautilus, along with other fitness brands like Schwinn Fitness and its namesake Nautilus brand. The company has seen shares fall 65% over the last year and more than 85% in the last five years. The company has a market capitalization of around $50 million and has shares trading at $1.69 compared to a 52-week range of $1.23 to $5.10.

Once the darling of Wall Street and a COVID-19 play, Peloton Interactive has seen shares fall over 50% in the last year. The company’s shares trade at $12.69 compared to a 52-week trading range of $6.66 to $32.14. Peloton has a new CEO and is restructuring to try to turnaround the business.

Planet Fitness shares are down 9.7% in the last year, outperforming its peers. Shares of the fitness chain are up over 115% in the last five years, leading the way in the sector.

“Today more than 6 percent of all Americans over the age of 15 are Planet Fitness members. But we’re not stopping there,” Planet Fitness CEO Chris Rondeau said on the company’s fourth quarter earnings report. “We believe that in the future we can double our membership given our historic ability to do so and the increasing penetration we’ve experienced with each successive generation.”

While Planet Fitness calling out rivals as fads may have taken some by surprise, so far the results speak for themselves in terms of stock performance.

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