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Planet Fitness, Inc. PLNT reported stellar third-quarter 2024 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.

The quarter’s performance was driven by contributions from new club openings and higher royalty revenues. The strength in the contributions from these factors was reflected in the year-over-year increase in system-wide same-club sales.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

PLNT’s Earnings & Revenue Discussion

The company reported adjusted earnings per share (EPS) of 64 cents, which surpassed the Zacks Consensus Estimate of 58 cents by 10.3%. In the prior-year quarter, the company reported adjusted EPS of 59 cents.

Quarterly revenues of $292.2 million topped the consensus mark of $284 million by 3%. The top line also improved 5.3% year over year, driven by system-wide same-club sales growth of 4.3% year over year.

Adjusted EBITDA was $123.1 million, up from $111.9 million reported in the year-ago quarter.

Planet Fitness, Inc. Price, Consensus and EPS Surprise

Planet Fitness, Inc. price-consensus-eps-surprise-chart | Planet Fitness, Inc. Quote

PLNT’s Segmental Performance

Franchise: Revenues of $102.2 million rose 4.3% on a year-over-year basis. Our model predicted the metric to increase 6.7% from the prior-year level. This upside was driven by a rise of $6 million, stemming from an uptick in royalty revenues, $1.6 million from new clubs opened since July 1, 2023, and $1.2 million from higher royalties on annual fees.

The segment’s EBITDA was $72.8 million, up 7.7% year over year.

Corporate-owned Clubs: Revenues of this segment amounted to $128.1 million, up 13.1% year over year. Our anticipated value was $121.1 million. This uptick can be attributed to an increase of $9.6 million from corporate-owned clubs and $5.3 million from new clubs opened and acquired since July 1, 2023.

Segment EBITDA totaled $50.1 million, up 13.2% year over year.

Equipment: Segmental revenues totaled $61.7 million, down 6.7% year over year. We expected the metric to decline 8% year over year. This downside was due to lower revenues from equipment sales to new franchisee-owned clubs.

This segment’s EBITDA was $18.5 million, up 12.5% year over year.

Other Financial Details of PLNT

As of Sept. 30, 2024, Planet Fitness had cash and cash equivalents of $298.8 million compared with $275.8 million as of Dec. 31, 2023. Long-term debt (net of current maturities) was $2.15 billion, up from $1.96 billion as of Dec. 31, 2023.

2024 Outlook of Planet Fitness

Planet Fitness still expects revenues to increase in the 8-9% range from the level of 2023, up from the prior estimate of 4-6% growth. System-wide same-club sales are predicted in the band of 4-5% compared with the prior estimate of a 3-5% gain. The company continues to anticipate new equipment placements to be between approximately 120 and 130 in franchisee-owned locations.

Adjusted EBITDA is estimated to increase in the range of 8-9% compared with the prior estimate of 7-9%.

Adjusted net income is now envisioned to increase in the band of 8-9% from the level of 2023, up from the prior expected range of 4-6%.

Management forecasts adjusted EPS to increase in the range of 11-12% from 2023 levels, up from the earlier estimate of a 7-9% increase. It continues to anticipate adjusted shares outstanding to be approximately 86.5 million.

PLNT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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