Planet Fitness Reports 22 Percent Increase in 2019 Q3 Revenue

Planet Fitness finacials
(Photo by Jennifer Ray.) The third quarter's 41 new club openings boosted Planet Fitness' total facility count to 1,899 as of Sept. 30, 2019.

Planet Fitness, Hampton, New Hampshire, reported third quarter 2019 revenue of $166.8 million, a year-over-year increase of 22.1 percent, according to financials released Nov. 7.

The company opened 41 new franchised clubs during the quarter and saw system-wide same-store sales increase by 7.9 percent.

"We delivered another quarter of very solid results," CEO Chris Rondeau said in a media release. "High system-wide same store sales, combined with accelerated new store openings and our franchisees' continued commitment to re-equip their existing clubs with new equipment, fueled a 22 percent increase in total revenue. The third quarter was also highlighted by our highest-attended franchisee conference to date with over 1,500 attendees from across the system coming together to share ideas on how to strengthen the Planet Fitness brand, enhance the member experience and drive new member sign-ups.”

The company's franchise segment revenue increased to $66.7 million, corporate-owned stores segment revenue grew to $40.7 million and equipment segment revenue improved to $59.4 million, representing increases of 21.7 percent, 15.1 percent and 27.9 percent, respectively.

Planet Fitness' adjusted EBITDA increased 22.2 percent to $65.7 million.

The 41 new club openings boosted Planet Fitness' total facility count to 1,899 as of Sept. 30, 2019. Rondeau noted in a call with analysts that the company has a potential for 4,000 clubs. 

“Based on several factors, including our experienced franchisees and their ability to execute, the significant amount of projected store expansion still ahead and our increasing marketing spend, I am confident that the business is well positioned to drive continued growth and increased profitability,” Rondeau said in the release.

During the call, Rondeau shared that Planet Fitness will be the exclusive fitness partner of the “Biggest Loser” when the TV show returns in January on the USA Network. One of the trainers on the show will be a Planet Fitness member who will share her weight loss journey to help the contestants with theirs, he said.

In other news, the company has proposed a recapitalization transaction of its subsidiaries' existing securitized financing facility. As of Sept. 30, the company claimed $1.2 billion in outstanding debt under its existing financing facility and is seeking to issue $550 million Series 2019-1 Fixed Rate Senior Secured Notes. Net proceeds from the facility will be used to pay transaction costs and for working capital and general corporate purposes. The proposal, if approved, is slated to close during the fourth quarter.

Additionally, Planet Fitness announced its first Australian clubs have opened in the New South Wales cities of Tuggerah and Gosford with a third location expected to open in Casula in 2020. The company has signed a special development agreement with Bravo Fit Holdings Pty Ltd., a group consisting of American and Australian franchisees, to develop 35 locations in the country in coming years.

The company ranked No. 6 on Club Industry’s Top 100 Health Clubs of 2019 list with $572.9 million in 2018 revenue from corporate-owned locations and franchisee fees but not individual franchisee revenue.  

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