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Planet Fitness, Inc. (PLNT - Free Report) reported fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Also, both metrics increased on a year-over-year basis.
Following the results, the company’s shares fell 5.3% during trading hours on Feb 22. Negative investor sentiments were witnessed as the company cited concerns about continued macroeconomic uncertainty and a slowing down of sales (owing to a transition towards more strength equipment over cardio). The company anticipates 2024 sales distribution to resemble that of 2023, showing a return to a standard quarterly rhythm.
Earnings & Revenue Discussion
For the fourth quarter, Planet Fitness reported adjusted net income per share (diluted) of 60 cents, surpassing the Zacks Consensus Estimate of 58 cents by 3.5%. In the prior-year quarter, the company reported net income per share (diluted) of 53 cents.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $285.1 million surpassed the consensus mark of $282 million. The top line improved 1.4% from the year-ago quarter’s levels, driven by system-wide same-store sales growth of 7.7% year over year.
The company’s results reflect an improved cancel rate with increased visits per member and higher visit frequency across all age groups compared to the previous year. It noted rises in penetration levels among all generational groups.
Adjusted EBITDA was $114.3 million compared with $106.1 million reported in the year-ago quarter.
Segmental Performance
Franchise: In the quarter, this segment’s revenues were $98.2 million, up 13.9% from the prior-year quarter. Our model predicted this segment’s revenues to increase 12.6% to $97.1 million year over year.
The upside was driven by rises of $7.8 million stemming from an uptick in royalty revenue, a $2.7 million boost from higher revenue generated by the National Advertising Fund (NAF) and $1.4 million of revenues associated with the sale of HVAC units to franchisees. This was partially offset by a $1.0 million decline in revenues from equipment placement.
EBITDA in the Franchise segment was $68.3 million compared with $48.9 million reported in the prior-year quarter.
Corporate-owned Stores: Revenues of this segment amounted to $116.4 million, up 15.9% from the reported value of $100.5 million in the year-ago quarter. For this segment’s revenues, our anticipated value was $105.2 million.
The uptick can primarily be attributed to an increase of 8.7% in corporate-owned store same-store sales and an additional $4.3 million from new store openings since Oct 1, 2022. The acquisition of four stores in Florida also contributed to the segment’s revenues.
EBITDA totaled $45 million compared with $38.8 million reported in the prior-year quarter.
Equipment: In the Equipment segment, revenues totaled $70.4 million, down 25.5% year over year. We expected revenues to be $79.7 million from this segment, indicating a 15.7% fall year-over-year.
The downside was driven by lower equipment sales to existing franchisee-owned stores.
EBITDA was $16.9 million compared with $24.4 million reported in the year-ago quarter.
Other Financial Details
As of Dec 31, 2023, cash and cash equivalents totaled $275.8 million compared with $409.8 million as of Dec 31, 2022. Long-term debt (net of current maturities) amounted to $1.96 billion, compared with $1.98 billion reported on Dec 31, 2022.
2023 Highlights
Total revenues in 2023 came in at $1.07 billion compared with $0.9 billion reported in 2022.
Adjusted EBITDA in 2023 came in at $435.4 million compared with $365.8 million reported in 2022.
In 2023, adjusted net income per share (diluted) came in at $2.24 compared with $1.64 reported in the previous year.
2024 Outlook
For 2024, the company expects revenues to increase in the 6-7% range over 2023 levels. System-wide same-store sales are still expected to be in the 5-6% range. The company expects new equipment placements to be between approximately 120 and 130 in franchisee-owned locations.
Adjusted EBITDA for 2024 is estimated to increase in the 10-11% range, while adjusted net income is anticipated at the 9-10% range over 2023 levels. The company expects adjusted earnings per share (EPS) to increase in the 10-11% range over 2023 levels. For 2024, the company anticipates adjusted diluted shares outstanding to be approximately 88 million.
Zacks Rank & Key Picks
Planet Fitness currently carries a Zacks Rank #3 (Hold).
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 71.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14.1% and 44%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 25.2% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 39.8% in the past year.
The Zacks Consensus Estimate for CCL’s 2024 sales indicates a rise of 13.8% from the year-ago levels.
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Planet Fitness (PLNT) Q4 Earnings & Revenues Beat Estimates
Planet Fitness, Inc. (PLNT - Free Report) reported fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Also, both metrics increased on a year-over-year basis.
Following the results, the company’s shares fell 5.3% during trading hours on Feb 22. Negative investor sentiments were witnessed as the company cited concerns about continued macroeconomic uncertainty and a slowing down of sales (owing to a transition towards more strength equipment over cardio). The company anticipates 2024 sales distribution to resemble that of 2023, showing a return to a standard quarterly rhythm.
Earnings & Revenue Discussion
For the fourth quarter, Planet Fitness reported adjusted net income per share (diluted) of 60 cents, surpassing the Zacks Consensus Estimate of 58 cents by 3.5%. In the prior-year quarter, the company reported net income per share (diluted) of 53 cents.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Planet Fitness, Inc. price-consensus-eps-surprise-chart | Planet Fitness, Inc. Quote
Quarterly revenues of $285.1 million surpassed the consensus mark of $282 million. The top line improved 1.4% from the year-ago quarter’s levels, driven by system-wide same-store sales growth of 7.7% year over year.
The company’s results reflect an improved cancel rate with increased visits per member and higher visit frequency across all age groups compared to the previous year. It noted rises in penetration levels among all generational groups.
Adjusted EBITDA was $114.3 million compared with $106.1 million reported in the year-ago quarter.
Segmental Performance
Franchise: In the quarter, this segment’s revenues were $98.2 million, up 13.9% from the prior-year quarter. Our model predicted this segment’s revenues to increase 12.6% to $97.1 million year over year.
The upside was driven by rises of $7.8 million stemming from an uptick in royalty revenue, a $2.7 million boost from higher revenue generated by the National Advertising Fund (NAF) and $1.4 million of revenues associated with the sale of HVAC units to franchisees. This was partially offset by a $1.0 million decline in revenues from equipment placement.
EBITDA in the Franchise segment was $68.3 million compared with $48.9 million reported in the prior-year quarter.
Corporate-owned Stores: Revenues of this segment amounted to $116.4 million, up 15.9% from the reported value of $100.5 million in the year-ago quarter. For this segment’s revenues, our anticipated value was $105.2 million.
The uptick can primarily be attributed to an increase of 8.7% in corporate-owned store same-store sales and an additional $4.3 million from new store openings since Oct 1, 2022. The acquisition of four stores in Florida also contributed to the segment’s revenues.
EBITDA totaled $45 million compared with $38.8 million reported in the prior-year quarter.
Equipment: In the Equipment segment, revenues totaled $70.4 million, down 25.5% year over year. We expected revenues to be $79.7 million from this segment, indicating a 15.7% fall year-over-year.
The downside was driven by lower equipment sales to existing franchisee-owned stores.
EBITDA was $16.9 million compared with $24.4 million reported in the year-ago quarter.
Other Financial Details
As of Dec 31, 2023, cash and cash equivalents totaled $275.8 million compared with $409.8 million as of Dec 31, 2022. Long-term debt (net of current maturities) amounted to $1.96 billion, compared with $1.98 billion reported on Dec 31, 2022.
2023 Highlights
Total revenues in 2023 came in at $1.07 billion compared with $0.9 billion reported in 2022.
Adjusted EBITDA in 2023 came in at $435.4 million compared with $365.8 million reported in 2022.
In 2023, adjusted net income per share (diluted) came in at $2.24 compared with $1.64 reported in the previous year.
2024 Outlook
For 2024, the company expects revenues to increase in the 6-7% range over 2023 levels. System-wide same-store sales are still expected to be in the 5-6% range. The company expects new equipment placements to be between approximately 120 and 130 in franchisee-owned locations.
Adjusted EBITDA for 2024 is estimated to increase in the 10-11% range, while adjusted net income is anticipated at the 9-10% range over 2023 levels. The company expects adjusted earnings per share (EPS) to increase in the 10-11% range over 2023 levels. For 2024, the company anticipates adjusted diluted shares outstanding to be approximately 88 million.
Zacks Rank & Key Picks
Planet Fitness currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 71.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14.1% and 44%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 25.2% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 39.8% in the past year.
The Zacks Consensus Estimate for CCL’s 2024 sales indicates a rise of 13.8% from the year-ago levels.