Planet Fitness, Hampton, New Hampshire, reported 2021 revenue of $587 million, compared to $406.6 million in 2020, and fourth quarter 2021 revenue of $183.6 million, compared to $133.8 million in fourth quarter 2020, the company announced on Feb. 24.
2021 revenue increased 44.4 percent over that of COVID-19 impacted 2020 revenue, but it still fell more than $100 million below the $688.8 million the company reported for 2019, prior to the COVID-19 pandemic. However, fourth quarter 2021 revenue was just $7.9 million lower than its fourth quarter 2019 revenue of $191.5 million, and it was 37.3 percent higher than fourth quarter 2020.
Adjusted EBITDA in 2021 increased 86.5 percent to $224.4 million from $120.4 million in the prior year.
Memberships and Club Growth
The company ended 2021 with 15.2 million members, an increase of 1.7 million members since the end of 2020 and an increase over its 2019 membership numbers of 14.4 million members. Planet Fitness ended January 2022 with 15.6 million members, surpassing the company’s pre-pandemic first quarter 2020 membership peak.
Generation Z (people born between 1997 and 2012) made up the fastest-growing demographic group in Planet Fitness’ 2021 membership, according to the announcement.
Planet Fitness CEO Chris Rondeau attributed the growth in Gen Z memberships during the pandemic to school sports leagues, after-school activities and even entertainment options being halted or closed for part of the year. Even into 2022, the growth in Gen Z memberships has continued above pre-COVID levels.
Despite the basic membership for Planet Fitness running $10 per month, about 62.5 percent of members hold a Black Card membership, which runs $22.99 per month, which allows members to use any of the company’s gyms as well as use amenities such as tanning beds. Black Card memberships are growing, Rondeau said.
Planet Fitness opened 62 new locations in the fourth quarter and 132 total in 2021, bringing the system-wide total to 2,254. In 2019, Planet Fitness added 261 locations, which was a record at that time for the company.
"We exceeded our expectations for both members and new store growth in 2021, which we believe demonstrates that our message of fitness being essential to both physical and mental health is resonating with consumers," Rondeau said in the announcement.
During first quarter 2022, Planet Fitness completed its acquisition of Sunshine Fitness, one of its franchisee groups that had more than 100 Planet Fitness locations. The company also completed debt refinancing.
“We believe there is long-term untapped opportunity for growth as the pandemic underscored the importance of overall fitness, and we offer a welcoming and safe environment for people looking to get off the couch to begin their fitness journey," Rondeau said.
Fourth Quarter Results
For fourth quarter 2021, net income attributable to Planet Fitness was $5.7 million compared to $8.7 million in the prior year period. Net income was $6.3 million in fourth quarter 2021 compared to $9.7 million in the prior year period.
Fourth quarter 2021 adjusted net income increased 49.6 percent to $22.5 million from $15.1 million in the prior year period.
Franchise segment revenue in fourth quarter increased $11.5 million or 17.3 percent to $78.4 million from $66.9 million in the prior year period. Of the increase, $6.2 million is from new stores and stores that were open in the current year period but temporarily closed in the prior year period due to COVID-19, $5.5 million is attributable to the franchise same store sales increase of 12.4 percent, $2.3 million is from higher equipment placement revenue, and $2.2 million is from higher franchise and other fees. These amounts were partially offset by lower National Advertising Fund (NAF) revenue of $2.9 million and lower annual fee revenue of $1.8 million as a result of catch up billings in the fourth quarter of 2020 as stores reopened from temporary COVID-19 closures;
Corporate-owned stores segment revenue in fourth quarter increased $5.9 million or 15.3 percent to $44.9 million from $38.9 million in the prior year period. The $5.9 million increase was primarily a result of new stores and stores that were open in the current year period but temporarily closed in the prior year period due to COVID-19 and a same store sales increase of 10.1 percent, partially offset by lower annual fee revenue as a result of catch up billings in the fourth quarter of 2020 as stores reopened from temporary COVID-19 closures.
Fourth quarter equipment segment revenue increased $32.4 million or 115.7 percent to $60.4 million from $28 million in the prior year period, due to higher equipment sales to new and existing franchisee-owned stores. Also contributing to the increase was the 15 percent discount provided to franchisees on equipment sales in the prior year as a result of the COVID-19 pandemic.
2021 Full Year Results
For full-year 2021, total revenue increased $180.4 million or 44.4 percent to $587 million from $406.6 million in the prior year.
Franchise segment revenue increased $84.6 million or 41 percent to $290.7 million from $206.2 million in the prior year primarily from higher royalty revenue and NAF revenue as a result of temporary store closures related to COVID-19 beginning in March 2020, as well as higher equipment placement revenue.
Corporate-owned stores segment revenue increased $50.1 million or 42.7 percent to $167.2 million from $117.1 million in the prior year, primarily as a result of temporary store closures related to COVID-19 beginning in March 2020, as well as the opening of 12 new corporate-owned stores since Jan. 1, 2020.
Equipment segment revenue increased $45.8 million or 54.9 percent to $129.1 million from $83.3 million in the prior year, driven by higher equipment sales to new and existing franchisee-owned stores. Also contributing to the increase was the 15 percent discount provided to franchisees on equipment sales in the prior year as a result of the COVID-19 pandemic.
2022 Outlook
The company’s outlook for 2022 is that revenue will increase in the mid-50 percent range, adjusted EBITDA will increase to the high-50 percent range, adjusted net income will increase to the low-90 percent range.
It also anticipates system-wide same store sales in the low double-digit percentage range and new equipment placements of approximately 170 in franchisee-owned locations.