Planet Fitness Inc. reported a profit against a loss in the second quarter ended June 30 as sales recovered against year-ago widespread facility closures tied to the pandemic. The fitness chain also said it added 700,000 net new members since the end of its first quarter, marking six consecutive months of net membership growth.

“Our membership momentum continues to defy our historical seasonal patterns, and, as of the end of July, we had more than 15 million members. It’s a testament to the strength of our brand that more than 13 million people remained members of Planet Fitness in the depths of the global pandemic when most of our gyms were temporarily closed. And today, with nearly all of our stores reopened, existing members are re-engaging with us, and net membership is continuing to climb as people realize the importance of fitness to their overall wellness,” said Chris Rondeau, CEO, Planet Fitness. “There is a dislocation in the fitness industry with approximately 22 percent of U.S. gyms permanently closed due to the impact from COVID-19 through the end of the second quarter while, at the same time, more Americans are realizing that fitness is essential to physical, mental and emotional well-being. We believe Planet Fitness is the place that fills that gap with our affordable, non-intimidating workout environment and, as a result, we are confident in achieving, and possibly exceeding, our long-term target of 4,000 locations in the U.S.”

Second Quarter Fiscal 2021 results

  • Total revenue increased from the prior-year period by 241.1 percent to $137.3 million.
  • Net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a loss of $29.2 million, or $0.36 per diluted share in the prior-year period.
  • Net income increased $47.0 million to $15.0 million, compared to a net loss of $32.0 million in the prior-year period.
  • Adjusted net income(1) increased $46.1 million to $18.2 million, or $0.21 per diluted share, compared to an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior-year period.
  • Adjusted EBITDA(1) increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior-year period.
  • 24 new Planet Fitness stores were opened during the period, bringing system-wide total stores to 2,170 as of June 30, 2021.
  • Cash of $527.4 million as of June 30, 2021, which includes cash and cash equivalents of $469.1 million and restricted cash of $58.2 million.

Operating Results For The Second Quarter Ended June 30, 2021
For the second quarter 2021, total revenue increased $97.0 million or 241.1 percent to $137.3 million from $40.2 million in the prior-year period.

By segment:

  • Franchise segment revenue increased $51.8 million or 246.9 percent to $72.8 million from $21.0 million in the prior-year period. The increase in franchise segment revenue for the second quarter 2021 is primarily due to a $37.7 million increase in franchise royalty revenue, an $8.3 million increase in NAF revenue and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior-year period;
  • Corporate-owned stores segment revenue increased $31.2 million or 330.8 percent to $40.6 million from $9.4 million in the prior-year period. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior-year period and the opening of seven new corporate-owned stores since April 1, 2020; and
  • Equipment segment revenue increased $14.0 million or 142.8 percent to $23.8 million from $9.8 million in the prior-year period, driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior-year period.

For the second quarter of 2021, net income attributable to Planet Fitness, Inc. was $14.0 million, or $0.17 per diluted share, compared to a net loss attributable to Planet Fitness, Inc. of $29.2 million, or $0.36 per diluted share in the prior-year period. Net income was $15.0 million in the second quarter of 2021 compared to a net loss of $32.0 million in the prior-year period. Adjusted net income increased $46.1 million to $18.2 million, or $0.21 per diluted share, from an Adjusted net loss of $27.9 million, or $0.32 per diluted share in the prior-year period. Adjusted net income (loss) has been adjusted to reflect a normalized federal income tax rate of 26.6 percent and 26.8 percent for the current and prior-year period, respectively, and excludes certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance.

Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance, increased $64.8 million to $55.6 million from a loss of $9.3 million in the prior-year period.

Segment EBITDA represents its Total Segment EBITDA broken down by its reportable segments. Total Segment EBITDA is equal to EBITDA, which is defined as net income before interest, taxes, depreciation, and amortization.

  • Franchise segment EBITDA increased from $48.2 million to $51.8 million. The increase in franchise segment EBITDA for the second quarter 2021 was a result of higher royalty and national advertising fund collections in the three months ended June 30, 2021 consisting of a $37.7 million increase in franchise royalty revenue, an $8.3 million increase in NAF revenue, and a $5.0 million increase in franchise and other fees, primarily attributable to temporary store closures as a result of COVID-19 in the prior-year period;
  • Corporate-owned stores segment EBITDA increased from $16.7 million to $10.4 million. The increase was primarily due to temporary store closures as a result of COVID-19 in the prior-year period and the opening of seven new corporate-owned stores since April 1, 2020; and
  • Equipment segment EBITDA increased by $4.3 million to $5.6 million driven by higher equipment sales to new and existing franchisee-owned stores in the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to temporary store closures as a result of COVID-19 in the prior-year period.

2021 Outlook
For the year ending December 31, 2021, the company expects the following, assuming there is no significant worsening of the pandemic that seriously impacts performance, including prolonged store closures or other mandated operational restrictions:

  • To be at the high-end of its 75 to 100 new store opening range;
  • Full-year revenue will be between $530 million and $540 million;
  • Selling, General & Administrative expenses will be in the low $90 million dollar range;
  • Adjusted EBITDA will be between $200 million and $210 million; and
  • Adjusted net income per share, diluted, will be between $0.65 and $0.70.

Photo courtesy Planet Fitness/Getty