By Geoffrey Smith
Investing.com — Planet Fitness (NYSE:PLNT) stock jumped over 4% in early trading on Thursday after the gym chain reported record growth in its membership numbers at the end of last year, putting it on course for a solid 2023.
The end of the pandemic allowed Americans to flood back to Planet Fitness’ gyms last year, leading revenue to rise 60% from COVID-hit 2021 levels to $938 million. The numbers were also helped by the acquisition of rival fitness company Sunshine Fitness for $800M, a deal that was completed last February.
Adjusted earnings per share and net income more than doubled to $1.64 and $149M, respectively.
Growth slowed toward the end of the year, with comparable sales up only 9.0% to $281M, although this was above expectations, as was EPS of 53c.
The company said it expects to grow well ahead of inflation in the current year, with comparable sales up 13%-14%, and adjusted earnings per share rising by between 33%-36%. Underlying profitability before interest, taxes, depreciation and amortization will rise by 17%-18%, it added.
A nationwide promotion at the end of last year, coupled with a more coordinated marketing drive, had generated record growth in user numbers in the fourth quarter, Chief Executive Chris Rondeau said in a statement. As a result, the company now counts over 6% of Americans over the age of 15 as members. Rondeau said he believes that figure can double, given “the increasing penetration we’ve experienced with each successive generation.”
By 10:15 ET (15:15 GMT), Planet Fitness shares had come off their earlier highs but were still up 3.2%. While the stock has weathered the pandemic better than many others that were battered by lockdown measures, it hasn’t posted a new high since late 2021, with the cost of absorbing Sunshine Fitness a concern for most of last year.