Planet Fitness Reports Second-Quarter 2022 Results & Says Affordable Fitness Model Resonates with Americans
Planet Fitness ended the second quarter with over 16.5 million total memberships and is aiming to capture brand loyalty with the younger generations who prefer functional fitness
Planet Fitness has released its financial results for the second quarter of 2022, reporting that its join trend has returned to pre-pandemic seasonality with an additional 300,000 net new members, wrapping up the quarter with over 16.5 million fitness enthusiasts. The New Hampshire-based fitness franchisor and operator says its low-cost model is appreciated during this time of economic uncertainty.
“Our high-quality, affordable fitness experience resonates now more than ever as Americans are seeking value and feeling the rising costs of everyday items such as food and gas. We believe that people will continue to prioritize their health and wellness while being more cost-conscious, and we offer a welcoming environment for people of all fitness levels,” noted Chris Rondeau, Chief Executive Officer of Planet Fitness.
Planet Fitness reported that for the second quarter 2022, total revenue increased $87.2 million or 63.5% to $224.4 million from $137.3 million in the prior year period, which included a system-wide same store sales growth of 13.6%.
Unlike other fitness gyms, Planet Fitness reported last fall that its locations withstood temporary store closures, some for up to nine months, without a single fitness facility permanently closing due to the pandemic.
High School Summer Pass success
One recent win that Planet Fitness reported was its High School Summer Pass Program, where the fitness chain invited students to participate in a free program that drew over 3.3 million teen participants. The program allowed teens to exercise for free at Planet Fitness locations, which the gym brand described as an important initiative in light of the teen mental health crisis. The number of participants in the 2022 High School Summer Pass program was three times that of 2019.
“Nearly 15 percent of all high school-aged teens in the U.S. are either enrolled in the program or are a paying member at Planet Fitness. We’re proud to be helping them establish healthy habits that they can build upon into the future,” Rondeau shared.
While Planet Fitness admitted on its Q2 2022 earnings call that the program had a slight negative impact on its paid membership during the quarter because some of the teens who participated would have otherwise paid for a membership, the fitness franchisor says it is focused on building lifelong brand loyalty with the younger generations.
The search for a new Planet Fitness President
Planet Fitness also announced that Dorvin Lively, President, has decided to retire. Lively joined Planet Fitness as Chief Financial Officer in 2013 and assisted the gym in developing its finance organization, preparing Planet Fitness to go public, and helped expand the brand both domestically and internationally.
“We are grateful for Dorvin’s leadership, friendship, passion for our member and franchisees, and significant contributions to the brand over the past nine years. Personally, I’d like to thank Dorvin for helping me lead Planet Fitness and I am forever grateful for his guidance and support,” said Rondeau. Planet Fitness announced it has started searching for a new President.
The shift to functional fitness
Rondeau also provided insight on Planet Fitness consumers, noting that the younger generations aren’t utilizing cardio equipment like older generations. Instead of spending 45 minutes on a treadmill, younger fitness members are more interested in functional training, using kettle bells and designated functional areas, which were added in Planet Fitness clubs about five years ago. The fitness franchisor is open to the idea of expanding the functional fitness zones if the trend continues.
“There’s no doubt that there’s a shift there. So it’s just a matter of, I think, slowly and carefully transitioning as we watch trends so that we’re definitely still getting Gen Zs to gravitate toward us and then Gen Alpha eventually. But right now, I think we’re doing the right thing,” Rondeau shared.
An upcoming convection and the prediction of strong Q1 in 2023
During the Planet Fitness earnings call, Rondeau confirmed that the fitness franchisor will hold its first franchisee convention since 2019. Over 1,000 people have registered for the convention, which will include marketing, development, and operational breakout sessions.
Tom Fitzgerald, Planet Fitness Chief Financial Officer, noted that the fitness brand is encouraged for the upcoming months. “We believe that this January, this Q1, hopefully, will be more of a typical strong Q1 for us. We don’t see anything competitively that’s a threat on the horizon that’s going to change anything,” Fitzgerald said.
