Planet Fitness, Newington, New Hampshire, issued its first financial disclosure on Wednesday since going public, and its second quarter results showed an almost 26 percent revenue increase.
The second quarter was highlighted by $79 million in revenue (25.9 percent year-over year quarterly increase) and a 7.3 percent system-wide same stores sales increase. The profit of 13 cents per share topped estimates by a penny and beat the $77 million projection, pushing shares more than 10 percent higher in after-hours trading.
Planet Fitness' price per share closed at $18.50 on Wednesday, reflecting a 22 percent per-share growth since Aug. 24. The company, which ranked No. 7 on Club Industry's Top 100 Health Clubs of 2015, began trading Aug. 6 on the New York Stock Exchange (PLNT) at $14.50 per share and received favorable reviews from analysts this week.
“We are very pleased with our second quarter performance, which was highlighted by solid sales growth, strong margins and the opening of our 1,000th store," Planet Fitness CEO Chris Rondeau said in a statement. "Our recent results demonstrate the strength of our unique business model, and we are confident that our focus on providing a high-quality fitness experience at an exceptional price point will continue to resonate with a broader consumer audience. With our strong group of well-capitalized and experienced franchisees, we believe we have a sound plan in place to expand our store footprint and drive significant growth and shareholder value over the long-term.”
Planet Fitness added 38 stores during the second quarter and reported net income of $11.5 million compared to $8.8 million in second quarter 2014. There were 1,014 stores system-wide as of June 30.
Planet Fitness also reported double-digit percentage growth in second quarter operating results compared to second quarter 2014. Franchise segment revenue including commission income increased 18.7 percent to $21.9 million, corporate-owned stores segment revenue increased 11.4 percent to $25 million and equipment segment revenue increased 47 percent to $32.1 million.
Planet Fitness estimated total revenue for 2015 between $314 million and $316 million, and same-store sales growth between 7 percent and 7.5 percent in issuing its outlook. The company expects to open 187 and 191 franchised stores and three corporate stores this year.
Rondeau gave additional insight into strategy for the PF Black Card premium membership during a conference call with analysts Wednesday. The Black Card, which costs $19.99 per month, is part of the company's growth strategy disclosed to investors. It accounted for 55 percent of total memberships in 2014. That percentage is at 65 percent at some stores, Rondeau said.
Black Card members receive 20 percent off Reebok products, and the recently launched affinity program with Regis Salons gives Black Card members 10 percent off products and services. Rondeau cited a hydromassage chair as one of the in-store amenities.
"With the Black Card, what we are constantly looking for is added amenities inside the store," Rondeau said. "Outside the store we have the Reebok partnership, the Regis salons partnership and we're constantly looking for things there that have value outside the four walls. I would like to focus on something that's used more frequently–weekly if not daily."
Planet Fitness did not update the system-wide percentage of total Black Card memberships compared to the standard $10 per month memberships, but Chief Financial Officer Dorvin Lively said the percentage will be reported in the fourth quarter earnings release.