Revenue is looking up for most of the public health club companies in the United States, and for two, it’s looking up even beyond 2019.
All four publicly traded health club companies have reported their third quarter 2022 revenue as well as their anticipated full-year 2022 revenue.
Planet Fitness, Hampton, New Hampshire, and Xponential Fitness, Irvine, California, both anticipate topping their 2019 revenue at the end of the year.
Planet Fitness
Planet Fitness anticipates full-year 2022 revenue will increase in the high 50 percent range compared to full-year 2021. Club Industry calculated that range to be $909.85 million to $933.33 million, which is greater than the company’s pre-pandemic 2019 revenue of $688.8 million.
Some of that increase is likely due to the company’s purchase of one of its largest franchisee groups, Sunshine Fitness Growth Holdings, LLC in first quarter 2022. With that purchase, Planet Fitness grew its corporate-owned clubs by 114. In May, the company also increased its Black Card membership by $2 for new members, likely contributing to the revenue increase.
On its investor day, held Nov. 15, Planet shared that it has the potential to double the size of its existing member base, partially based on its ability to gain greater share of each successive generational demographic. The company is focused on continuing to increase its penetration of all generations with an emphasis on the Gen Z demographic, which it pulled in over the summer with its High School Summer Pass Program.
At the end of the third quarter, Planet Fitness had an all-time record high membership at 16.6 million members.
The company also said it has an opportunity to continue to grow store count and average unit volumes past the original planned unit expectations for a market plus it plans to accelerate its international growth.
"We emerged as the clear industry winner coming out of the global pandemic, having entered it from a position of strength at both the franchisor and franchisee levels," Planet Fitness CEO Chris Rondeau said.
During the investor day, the company shared its three-year annual financial targets:
- Annual revenue: Low-to-mid teens percent growth
- Annual adjusted EBITDA: High teens percent growth
- Annual adjusted earnings per share: Low-to-mid 20 percent growth with the higher end of the range achieved through share repurchases
Xponential Fitness
Xponential owns Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble and BFT. It projects full-year 2022 revenue will be in the range of $235 million to $240 million. At the end of the third quarter, it had 2,485 studios operating. The company, which went public in 2021, reported 2019 revenue of $164.89 million at a time when it had 1,460 studios open.
Its revenue dropped to $106.59 million in pandemic-plagued 2020 and rose to $155.1 million in 2021.
The company also increased its guidance on full-year adjusted EBITDA, now anticipating $70 million to $74 million or an increase of 164 percent at the midpoint compared to full-year 2021 compared to previous guidance of $68 million to $72 million.
It reaffirmed its guidance for studio openings in the range of 500 to 520 or an increase of 53 percent at the midpoint compared to full-year 2021.
Xponential is focused on four areas of growth: increasing its franchise studio base, expanding internationally, expanding margins and driving free cash flow conversion, and increasing its same-store sales and average unit volume, Xponential CEO Anthony Geisler said in a call with analysts on Nov. 10.
Life Time
Even though Life Time, Chanhassen, Minnesota, doesn’t anticipate being back to its 2019 revenue of $1.9 billion in 2022, it could come close. The company anticipates full-year 2022 revenue of $1.81 billion to $1.84 billion. That compares to the hit Life Time took in 2020 when its revenue dropped to $949 million and surpasses its 2021 revenue of $1.318 billion.
Life Time, which went public in October 2021 and celebrates its 30th anniversary this year, completed several sale-leaseback deals in 2022, five of those in the third quarter for gross proceeds of $200 million. For the nine-month period ending Sept. 30, aggregate proceeds from sale-leaseback transactions were approximately $375 million.
The company is also growing in the New York market and has become the largest operator of pickleball courts in the country, even opening its first pickleball-only club in February.
F45 Training
On the other end of the spectrum is F45 Training, Austin, Texas, which went public in July 2021 at $16 per share and has seen its stock value dip to as low as 79 cents per share during the past year. The company has gone through some upheaval in 2022 with the departure of its CEO and layoffs of 100 corporate staff members as well as a lawsuit from two of its ambassadors, David Beckham and Greg Norman. The company is also studying an unsolicited take-private bid for $385 million from Kennedy Lewis Investment Management LP (KLIM) to acquire all of the outstanding shares of common stock of the company not already beneficially owned by KLIM or other stockholders participating in the proposed transaction.
Club Industry is unable to ascertain 2019 revenue for F45 Training, but in July 2022, the company downgraded its full-year 2022 outlook and reaffirmed that downgrade when it released its third quarter financials. For 2022, F45 anticipates revenue of $120 million to $130 million, which would be lower than its reported 2021 revenue of $134 million—although better than its 2020 revenue of $82.3 million.
Adjusted EBITDA for F45 Training is expected between $25 million and $30 million. Net new franchises sold is anticipated to be between 350 and 450 for the year while net initial studio openings are expected between 350 and 450.
Below is the revenue for each brand from 2019 to anticipated 2022 revenue:
Planet Fitness:
2019: $688.8 million (98 owned and 2001 franchised)
2020: $406.60 million (103 owned, 2,021 franchised)
2021: $587 million (112 owned, 2,142 franchised)
Anticipated 2022: increase high 50 percent range, which Club Industry calculated this to be $909.85 million to $933.33 million
Xponential Fitness:
2019: $164.89 million (4 owned, 1456 franchised)
2020: $106.59 million (40 owned, 1,672 franchised)
2021: $155.1 million (35 owned, 1,930 franchised)
Anticipated 2022: $235 million to $240 million
Life Time:
2019: $1.9 billion
2020: $949 million
2021: $1.318 billion
Anticipated 2022: $1.81 billion and $1.84 billion
F45 Training:
2019: Unknown
2020: $82.30 million (1,437 franchised)
2021: $134 million (1,749 franchised)
Anticipated 2022: $120 million to $130 million