Planet Fitness Reports Strong Growth but Faces Challenges in 2024

Planet Fitness

Planet Fitness, one of the largest and fastest-growing gym chains in the U.S., announced its fourth-quarter and year-end 2023 results on Thursday, showing a steady increase in revenue, membership, and store openings. However, the company also warned that 2024 will be a “transition year” as it implements a new growth model and deals with executive changes and uncertainty over its plans.

Planet Fitness

Revenue and Membership Growth in 2023

According to the company’s press release1, Planet Fitness generated $285.1 million in total revenue in the fourth quarter of 2023, a 1.4% increase from the same period in 2022. For the full year 2023, the total revenue was $1.1 billion, a 14.4% increase from 2022. The company attributed the growth to higher equipment sales, royalty fees, and franchise fees, as well as increased demand for its low-cost and high-value fitness offerings.

Planet Fitness also added 1.7 million new members in 2023, reaching a total of 19.9 million members as of December 31, 2023. The company opened 165 new stores in 2023, bringing its system-wide total to 2,575 stores across 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama, and Mexico. The company reported a system-wide same-store sales increase of 8.7% for 2023, indicating a strong customer retention and satisfaction rate.

New Growth Model and Executive Changes in 2024

Despite the positive results, Planet Fitness also faced some challenges and uncertainties in 2023 and 2024. In October 2023, the company announced the departure of its former CEO, Chris Rondeau, who had led the company since 2013 and oversaw its rapid expansion and public offering. The company appointed Craig Benson, a board member and former governor of New Hampshire, as the interim CEO while searching for a permanent replacement.

In November 2023, the company also unveiled its “New Growth Model,”  a strategic initiative to support long-term store growth and enhance franchisee returns. The new model reduces the capital requirements and equipment costs for opening and maintaining a Planet Fitness store and provides more flexibility and incentives for franchisees to expand their store portfolios. The company expects the new model to increase its total store opportunity in the U.S. from 4,000 to 5,000, based on third-party studies.

However, the company also acknowledged that 2024 will be a “transition year” as its franchisees incorporate the changes into their growth plans. The company projected a revenue increase of 6%–7% for 2024, compared to 14.4% in 2023, and a new equipment placement of 120–130 stores, compared to 165 in 2023. The company also expected a system-wide same-store sales increase of high single digits in 2024, compared to 8.7% in 2023.

Outlook and Future Plans

Planet Fitness remains optimistic about its long-term prospects and competitive advantages in the fitness industry. The company believes that its low-cost, high-value, and non-intimidating fitness concept appeals to a large and underserved market of casual and first-time gym users, especially in the post-pandemic era. The company also boasts a consistent and predictable asset-light business model, a loyal and growing membership base, and a strong and supportive franchise network.

The company plans to invest in the business and return capital to shareholders through its share repurchase program, which has $300 million remaining as of December 31, 2023. The company also intends to leverage its digital platforms, such as its mobile app and connected fitness equipment, to enhance its customer experience and engagement. The company also aims to explore new markets and opportunities, both domestically and internationally, to further expand its brand awareness and reach.

Written by
Jennifer Dixon

Jennifer Dixon is a passionate and professional news writer with over 15 years of experience in the media industry. She has worked as a reporter, editor, and correspondent for various news agencies such as Reuters, CNN, and BBC. She has covered a wide range of topics, from politics and business to culture and entertainment. She has a keen eye for detail and a flair for storytelling. She is also an avid reader and learner, always curious about the world and its people. Jennifer holds a master's degree in journalism from Northwestern University and a bachelor's degree in English from Yale University. She is currently working as a freelance writer and consultant, helping clients with their news and content needs. In her spare time, she enjoys hiking, yoga, and photography.

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