Why Are Planet Fitness Shares Jumping Today?

Planet Fitness Inc PLNT shares are trading higher after It reported third-quarter FY23 earnings above street view and raised its outlook.

PLNT reported third-quarter FY23 sales growth of 13.6% year-on-year to $277.60 million, beating the analyst consensus estimate of $268.26 million.

System-wide same store sales increased 8.4%. Revenue from the Franchise segment rose 21.6% Y/Y to $98.2 million, the Corporate-owned stores climbed 11.8% to $113.2 million, and Equipment gained 6.1% Y/Y to $66.1 million.

Total operating costs and expenses rose 12.5% Y/Y to $205.2 million. The operating margin was 26.1%, and operating income for the quarter rose 16.8% to $72.4 million.

Adjusted EBITDA increased 19.2% Y/Y to $111.9 million. Adjusted EPS of $0.59 beat the consensus estimate of $0.55. 

The company held $474.1 million in cash and equivalents as of September 30, 2023. Operating cash flow for nine months totaled $266.9 million.

Outlook: Planet Fitness sees FY23 sales growth of about 14% (previous 12%). The company expects FY23 adjusted EBITDA to increase about 18% (previously 17%).

PLNT sees FY23 adjusted EPS to increase by about 35% (previously 34%).

PLNT sees system-wide new store openings of approximately 150-160 locations (previously approximately 160).

Related: Planet Fitness Faces Unmet Commitment For Unit Openings Given The Macro Climate, Says Analyst

Price Action: PLNT shares are trading higher by 10.48% at $60.95 in premarket on the last check Tuesday.