Planet Fitness, Hampton, New Hampshire, reported $111.88 million in first quarter 2021 revenue, a 12.1 percent decrease from first quarter 2020 when revenue was $127.2 million, the company announced on May 6. It did, however, report adding 600,000 net new members in the quarter, ending with 14.1 million memberships.
It also reported that almost 100 percent of its clubs are now reopened and that it opened 22 new locations in the quarter, bringing system-wide total stores to 2,146 as of March 31, 2021.
Planet Fitness CEO Chris Rondeau said: "We are very encouraged by the clear and steady improvement in overall sentiment we witnessed in America during the first quarter and the corresponding impact it had on our business. We're pleased to announce that we experienced sequential net member growth in each month of the quarter, ending March with 14.1 million members. We believe that the positive headline news on COVID-19 vaccine availability drove a seasonality shift in our membership trends as March membership growth exceeded March 2019, reinforcing our belief that people are eager to get back into our gyms.”
He anticipates the operating environment will remain volatile in the near term. However, he expressed optimism due to the company’s membership and usage trends as well as its recent partnership with technology company iFIT Health & Fitness Inc.
“As we look to the future, we believe our purpose of enhancing people's lives and creating a healthier world sets us, and our franchisees, up for long-term success," he said.
Planet Fitness’ revenue comes from three segments: its franchisees, its corporate-owned clubs and its equipment sales to franchisees. The franchisee revenue increased $5.5 million or 9.5 percent to $64.1 million compared to $58.5 million in first quarter 2020. Part of this segment revenue includes lower royalty and national advertising fund collections in the three months ended March 31, 2021, as well as lower membership levels as a result of COVID-19, but those decreases were offset by a deferral of $14.1 million of royalty revenue and $4.6 million of national advertising fund revenue in the three months ended March 31, 2020, that was collected but not recognized because of temporary store closures as a result of COVID-19.
The other two segments experienced revenue decreases. Corporate-owned stores segment revenue decreased $2.6 million or 6.5 percent to $37.9 million from $40.5 million in the prior year period. The decrease was primarily due to reduced membership levels and temporary store closures related to COVID-19, partially offset by the opening of five new corporate-owned stores since Jan. 1, 2020, and $5.9 million of deferred revenue that was collected but not recognized in the three months ended March 31, 2020, as a result of COVID-19 store closures, according to the company.
Equipment segment revenue decreased $18.2 million or 64.7 percent to $9.9 million from $28.2 million in the prior year period, due to lower equipment sales to new and existing franchisee-owned stores in the three months ended March 31, 2021 compared to the three months ended March 31, 2020. This was primarily as a result of providing all franchisees with a 12-month extension for all new store development obligations and an 18-month extension on re-equipment obligations, both as a result of COVID-19.
Because of the uncertainty surrounding the COVID-19 pandemic, the company is not providing a 2021 full-year outlook at this time.