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Planet Fitness Inc.’s Stock Falls After Second-Quarter Report

Company Performance

Planet Fitness Inc.’s stock (PLNT) experienced a 3.9% premarket dip on Thursday following the release of its second-quarter earnings report. Although the popular gym operator exceeded earnings expectations, it revised its full-year guidance due to increased costs.

Impressive Financial Results

During the quarter, Planet Fitness Inc. generated a net income of $41.1 million, equivalent to 48 cents per share. This represents a significant improvement from the $22.3 million (26 cents per share) achieved in the same period last year. Adjusted earnings per share stood at 65 cents, outperforming the FactSet consensus of 55 cents.

Strong Revenue Growth

The company experienced a substantial revenue increase of 27.6%, reaching $286.5 million, surpassing the FactSet consensus of $252 million.

Encouraging Membership Statistics

CEO Chris Rondeau emphasized positive membership trends, stating that more members are engaging in regular workouts, previous members are rejoining at an accelerated rate compared to pre-pandemic levels, and retention rates remain robust. Q2 marked the eighth consecutive quarter with lower year-over-year cancellation rates.

Revised Full-Year Guidance

Despite the positive financial performance, Planet Fitness Inc. revised its full-year guidance due to higher construction costs for new stores and increased interest rates. The company now anticipates approximately 140 placements of equipment in new franchisee stores, down from the previous forecast of 160. Additionally, revenue growth is expected to be approximately 12%, compared to the previous guidance range of 13% to 14%. Adjusted EPS is projected to rise about 34%, narrowing from the prior guidance range of 33% to 36%.

Market Response

Since the start of the year, Planet Fitness Inc.’s stock has encountered a 16% decline, while the S&P 500 has experienced an 18% gain.

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