Planet Fitness Inc. reported earnings in the fourth quarter ended December 31 rose 20.6 percent on an adjusted basis as revenues climbed 9.8 percent.

Fourth Quarter Fiscal 2019 Highlights

  • Total revenue increased from the prior-year period by 9.8 percent to $191.5 million.
  • System-wide same-store sales increased 8.6 percent.
  • Net income attributable to Planet Fitness, Inc. was $29.7 million, or $0.36 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $24.8 million, or $0.29 per diluted share, in the prior-year period.
  • Net income was $34.3 million, compared to net income of $28.8 million in the prior-year period.
  • Adjusted net income(1) increased 20.6 percent to $39.2 million, or $0.44 per diluted share, compared to $32.5 million, or $0.34 per diluted share, in the prior-year period.
  • Adjusted EBITDA(1) increased 23.0 percent to $76.6 million from $62.3 million in the prior-year period.
  • 102 new Planet Fitness stores were opened system-wide during the period, bringing system-wide total stores to 2,001 as of December 31, 2019.

Fiscal Year 2019 Highlights

  • Total revenue increased from the prior year by 20.2 percent to $688.8 million.
  • System-wide same-store sales increased 8.8 percent.
  • Net income attributable to Planet Fitness, Inc. was $117.7 million, or $1.41 per diluted share, compared to $88.0 million, or $1.00 per diluted share, in the prior year.
  • Net income was $135.4 million, compared to $103.2 million in the prior year.
  • Adjusted net income(1) increased 22.7 percent to $146.7 million, or $1.59 per diluted share, compared to $119.5 million, or $1.22 per diluted share, in the prior year.
  • Adjusted EBITDA(1) increased 26.4 percent to $282.2 million from $223.2 million in the prior year.
  • 261 new Planet Fitness stores were opened system-wide during the year, bringing system-wide total stores to 2,001 as of December 31, 2019.

“2019 was filled with many important milestones and financial achievements,” said Chris Rondeau, chief executive officer. “We opened a company record 261 new stores system-wide and ended the year with 2,001 Planet Fitness locations and approximately 14.4 million members. Our ability to attract casual, first-time gym users to our welcoming, non-intimidating fitness concept, combined with higher black card pricing, fueled an 8.8 percent improvement in system-wide same-store sales on top of a 10.2 percent increase in 2018. Revenue in all three of our operating segments – Franchise, Corporate-Owned Stores and Equipment – grew double-digits in 2019, with Franchise, our highest margin segment, growing the fastest, which along with the repurchase of 6.1 million shares, helped drive a 30 percent increase in Adjusted net income per share, diluted(1) year-over-year. We begin 2020 with great momentum in our business, a long runway for growth, and an experienced group of franchisees eager to capitalize on the many opportunities that still lie ahead.”

Operating Results For The Fourth Quarter Ended December 31, 2019
For the fourth quarter of 2019, total revenue increased $17.2 million or 9.8 percent to $191.5 million from $174.4 million in the prior-year period. By segment:

  • Franchise segment revenue increased $16.7 million or 29.6 percent to $73.3 million from $56.6 million in the prior-year period;
  • Corporate-owned stores segment revenue increased $5.0 million or 13.7 percent to $41.2 million from $36.2 million in the prior-year period, $3.1 million of which is from new corporate-owned stores opened or acquired since September 30, 2018; and
  • Equipment segment revenue decreased $4.6 million or 5.6 percent to $77.0 million from $81.6 million in the prior-year period, driven by a decrease in replacement equipment sales to existing franchisee-owned stores, partially offset by higher equipment sales to new franchisee-owned stores.

System-wide, same-store sales increased 8.6 percent. By segment, franchisee-owned same-store sales increased 8.8 percent and corporate-owned same-store sales increased 5.8 percent.

For the fourth quarter of 2019, net income attributable to Planet Fitness, Inc. was $29.7 million, or $0.36 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $24.8 million, or $0.29 per diluted share, in the prior-year period. Net income was $34.3 million in the fourth quarter of 2019 compared to $28.8 million in the prior-year period. Adjusted net income increased 20.6 percent to $39.2 million, or $0.44 per diluted share, from $32.5 million, or $0.34 per diluted share, in the prior-year period. Adjusted net income has been adjusted to reflect a normalized federal income tax rate of 26.8 percent for the fourth quarter of 2019 and 26.3 percent for the prior-year period and excludes certain non-cash and other items that Planet Fitness said it does 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 Planet Fitness said it does not consider in the evaluation of ongoing operational performance, increased 23.0 percent to $76.6 million from $62.3 million in the prior-year period.

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

Operating Results For The Fiscal Year Ended December 31, 2019
For the fiscal year ended December 31, 2019, total revenue increased $115.9 million or 20.2 percent to $688.8 million from $572.9 million in the prior year. By segment:

  • Franchise segment revenue increased $53.4 million or 23.8 percent to $277.6 million from $224.1 million in the prior year;
  • Corporate-owned stores segment revenue increased $21.1 million or 15.2 percent to $159.7 million from $138.6 million in the prior year, $10.7 million of which is from new corporate-owned stores opened or acquired since January 1, 2018; and
  • Equipment segment revenue increased $41.4 million or 19.7 percent to $251.5 million from $210.2 million in the prior year, driven by an increase in equipment sales to new stores and an increase in replacement equipment sales to existing franchisee-owned stores.

System-wide same-store sales increased 8.8 percent. By segment, franchisee-owned same-store sales increased 9.0 percent and corporate-owned same-store sales increased 6.1 percent.

For the year ended December 31, 2019, net income attributable to Planet Fitness, Inc. was $117.7 million, or $1.41 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $88.0 million, or $1.00 per diluted share, in the prior year. Net income was $135.4 million in 2019 compared to $103.2 million in the prior year. Adjusted net income increased 22.7 percent to $146.7 million, or $1.59 per diluted share, from $119.5 million, or $1.22 per diluted share, in the prior-year period. Adjusted net income has been adjusted to reflect a normalized federal income tax rate of 26.8 percent for the year ended December 31, 2019 and 26.3 percent for the prior-year period and excludes certain non-cash and other items that Planet Fitness said it does 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 Planet Fitness said it does not consider in the evaluation of ongoing operational performance, increased 26.4 percent to $282.2 million from $223.2 million in the prior-year period.

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

2020 Outlook
For the year ending December 31, 2020, the Company expects:

  • Total revenue increase of approximately 12 percent as compared to the year ended December 31, 2019;
  • System-wide same-store sales of approximately 8 percent;
  • Adjusted net income to increase approximately 10 percent as compared to the year ended December 31, 2019; and
  • Adjusted net income per diluted share to increase approximately 16 percent as compared to the year ended December 31, 2019.

Photo courtesy Planet Fitness