Planet Fitness, Inc. PLNT reported lower-than-expected first-quarter 2025 results, wherein adjusted earnings and revenues missed the Zacks Consensus Estimate. However, both metrics increased on a year-over-year basis.
The ongoing macroeconomic volatility is a concern for the company’s prospects, alongside increased costs and expenses due to elevated SG&A expenses and costs surrounding club operations.
However, the quarter’s year-over-year performance was encouraging, with system-wide same club sales increasing 6.1% and memberships increasing approximately 900,000 at the end of the quarter from the 2024-end. PLNT is realizing benefits from its restructured operating model amid the uncertainties, which are accompanied by its new marketing campaign and other strategic initiatives. For 2025, the company remains optimistic on the back of its tailwinds to navigate the risky market and ensure profitability.
Following the results, PLNT stock fell 4.6% during yesterday’s trading hours but grew 4% in the after-hours.
PLNT’s Q1 Earnings & Revenue Discussion
The company reported adjusted earnings per share (EPS) of 59 cents, missing the Zacks Consensus Estimate of 62 cents by 4.8%. In the prior-year quarter, the company reported adjusted EPS of 53 cents. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Quarterly revenues of $276.7 million also lagged the consensus mark of $282 million by 1.7%. Contrarily, the top line rose 11.5% year over year, driven by new club openings and membership growth.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Planet Fitness, Inc. price-consensus-eps-surprise-chart | Planet Fitness, Inc. Quote
Adjusted EBITDA was $117 million, up 10% from $106.3 million reported in the year-ago quarter.
Planet Fitness’ Segmental Performance
Franchise: The segment’s revenues rose 10.7% year over year to $115.2 million. This upside was driven by a rise of $6 million in royalty revenues, $3.6 million from franchise same club sales, $1.3 million from new clubs opened since Jan. 1, 2024, and $1 million from higher royalties on annual fees. Our model predicted the metric to increase 11.7% from the prior-year level.
The segment’s adjusted EBITDA was $84.9 million, up year over year from $76.1 million.
Corporate-owned Clubs: Revenues of this segment amounted to $133.7 million, up 9.2% year over year. This uptick was attributable to $6.7 million from the corporate-owned clubs in the same club sales base, $1.5 million from annual fee revenues and $0.4 million from other fees. Our model anticipated the metric to grow 9.9% year over year to $134.5 million.
Segment adjusted EBITDA totaled $45.8 million, up from $42.4 million reported a year ago.
Equipment: Segmental revenues totaled $27.8 million, up 28.7% year over year. This upside was mainly driven by $8.9 million of higher revenues from equipment sales to existing franchisee-owned clubs, which were partially offset by $2.7 million of lower revenues from equipment sales to new franchisee-owned clubs. We expected the metric to rise 53.4% year over year.
This segment’s adjusted EBITDA was $7.4 million, up from $4.8 million reported in the year-ago quarter.
PLNT’s Financial Glimpse
As of March 31, 2025, Planet Fitness had cash and cash equivalents of $343.9 million, up from $293.2 million as of 2024-end. Long-term debt (net of current maturities) inched down to $2.14 billion from $2.15 billion as of Dec. 31, 2024.
As of the first three months of 2025, net cash provided by operating activities was $133.9 million, up from $89.7 million reported in the comparable year-ago period.
Planet Fitness Retains 2025 Outlook
For 2025, the company continues to expect new equipment placements to be approximately 130- 140 franchisee-owned locations, with system-wide new club openings projected to be around 160-170 locations.
System-wide same-club sales growth in 2025 is expected to be in the 5-6% range. The company anticipates revenues to increase approximately 10% from the 2024 level.
Adjusted EBITDA for the year is still estimated to grow approximately 10%, while adjusted net income is expected to increase in the 8-9% range. Adjusted EPS is still projected to rise in the 11-12% range, based on adjusted diluted weighted-average shares outstanding of approximately 84.5 million.
For 2025, the company still expects net interest expense to be approximately $86 million. Depreciation and amortization are expected to remain consistent with the 2024 level.
Capital expenditures are now projected to increase approximately 20% (an approximately 25% increase previously expected).
PLNT’s Zacks Rank & Recent Consumer Discretionary Releases
Planet Fitness currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Norwegian Cruise Line Holdings Ltd. NCLH reported first-quarter 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. Both the top and bottom lines decreased on a year-over-year basis.
Results in the quarter were hurt by a 2% decline in Capacity Days, stemming from a higher number of Berths out of service due to larger ships undergoing dry-dock, as well as a strategic move to reduce passenger air participation rates. For 2025, Norwegian Cruise anticipates occupancy to be approximately 102.5% compared with the prior guidance of 103.4% and Capacity Days to be about 24.545 million.
MGM Resorts International MGM reported first-quarter 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom lines declined from the prior-year quarter’s level.
Management remains optimistic about the outlook for the rest of 2025, supported by strong forward bookings and expectations of record hotel performance in April on the Las Vegas Strip. MGM Resorts stated progress on the $200 million EBITDA enhancement plan and expects more than $150 million to be realized in 2025.
Caesars Entertainment, Inc. CZR reported mixed first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. Nonetheless, both the top and bottom lines improved on a year-over-year basis.
Caesars Entertainment’s first-quarter performance was driven by record results in the Digital segment. Growth in the regional segment, supported by recently opened properties and solid performance in Las Vegas, despite a tough comparison to last year’s Super Bowl period, also aided the quarter’s performance.
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This article originally published on Zacks Investment Research (zacks.com).
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