Planet Fitness Q2 Earnings Top Estimates; Cuts Near-Term Store Growth Forecast Citing External Headwinds

Planet Fitness Inc PLNT reported second-quarter FY23 sales growth of 27.6% year-on-year to $286.46 million, beating the analyst consensus of $249.10 million.

System-wide same store sales increased 8.7%. Revenue from the Franchise segment rose 19.7% Y/Y to $98.8 million, the Corporate-owned stores climbed 12.1% to $113.8 million, and Equipment gained 82.6% Y/Y to $73.9 million.

Total operating costs and expenses rose 23.6% Y/Y to $209.4 million. The operating margin was 26.8%, and operating income for the quarter rose 39.7% to $77 million.

Adjusted EBITDA increased 33.4% Y/Y to $118.9 million. Adjusted EPS of $0.65 beat the consensus of $0.54.

The company held $418.9 million in cash and equivalents as of June 30, 2023. The company opened 26 new stores during the period. It repurchased and retired 1.4 million shares of Class A common stock using $100 million of cash on hand.

Outlook: Planet Fitness sees FY23 sales growth of about 12% (previous 13% - 14%), representing $1.049 billion against the consensus of $1.05 billion.

The company expects FY22 adjusted EBITDA to increase about 17% (previously 17% - 18%).

PLNT sees FY22 adjusted EPS to increase about 34% (previously 33% - 36%), representing $2.20, above the consensus of $2.16.

PLNT reduced its 2023 outlook for placements of equipment in new franchisee stores to approximately 140 (previously 160) due to the compounding effects of higher new store construction costs and increased interest rates.

Price Action: PLNT shares are trading lower by 5.05% at $62.90 on the last check Thursday.

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