Planet Fitness said its second-quarter results reinforce how the company’s fitness experience “continues to resonate with consumers.”
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GLOCEO Chris Rondeau highlighted the robust demand for the brand, culminating in over 18.4 million members by the end of the quarter. Of these, 300,000 were added during Q2 alone. The company also reported an 8.7% growth in system-wide same-store sales and an expansion of 26 stores during the same period, bringing the total number of global stores to 2,472.
Delving into membership growth, Rondeau noted that while all generational groups in the United States have exceeded their pre-pandemic levels of membership, Gen Z is leading the way. Over 2.8 million Gen Z individuals have enrolled in 2023 so far through the company’s high school summer pass program, now in its third year.
The company’s focus is on fostering lasting brand loyalty among Gen Z by providing them with free access during the summer, aiming to establish healthy habits and offer fitness benefits. Rondeau aims for Planet Fitness to be the brand that comes to mind when these individuals decide to join a gym.
On a less positive note, the results indicated a continued need to engage and retain members, as non-use remains the top reason for membership cancellations. Strategies implemented by Planet Fitness have led to positive outcomes, with the average tenure of memberships increasing and a steady decline in the cancel rate for eight consecutive quarters.
Planet Fitness is facing post-pandemic challenges, as franchisees seek grace periods to navigate the lingering uncertainties caused by COVID-19. Additionally, the cost of constructing new gyms remains 25% higher than pre-pandemic levels.
Rondeau acknowledged these difficulties faced by franchisees, explaining that construction costs have increased and the reduced vacancy rate in retail spaces has made it slightly more challenging for franchisees to find suitable locations.
Looking ahead, the company plans to invest over $250 million this year to drive growth and aims to become the preferred fitness option for the 80% of the population without a gym membership.
