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Planet Fitness stock plunged more than 30% on Thursday, its worst single-day decline on record, after the company reported slower-than-expected membership growth and cut its full-year financial outlook.
The gym chain ended the first quarter with about 21.5 million members and 2,909 locations, the company said. While total revenue rose 21.9% to $337.2 million and same-club sales increased 3.5%, net member growth fell short of expectations during what is typically the company's strongest sign-up season.
Four factors weighed on first-quarter results, Keating told analysts, according to CNBC: messaging that did not land with intended audiences, heightened competition in select markets, adverse weather, and a difficult macroeconomic backdrop. She also attributed the shortfall in part to "internal and external headwinds" that emerged during the chain's prime sign-up window.
Keating pledged on the analyst call that the company would act quickly to widen its audience. "We are making immediate and near-term adjustments to broaden our reach and ensure our messaging is both visible and resonates with the fitness beginner and more casual gym-goer," she said.
Across several key metrics, the company's full-year 2026 targets were pulled back. Same-club sales growth is now pegged at roughly 1%, a steep step down from the 4% to 5% range the company had previously guided toward. The revenue growth outlook was trimmed to approximately 7% from 9%, adjusted EBITDA growth was reduced from roughly 10% to about 6%, and adjusted net income is now forecast to dip around 2% rather than grow by the 4% to 5% previously anticipated.
A previously announced nationwide price hike for the Black Card membership level has been put on hold while the company conducts a wider review of its pricing strategy.
"While we are resetting near-term expectations, we expect that these actions will help set the stage for enhanced top and bottom-line results in 2027," Keating said in a statement.
On the earnings front, adjusted EPS came in at 74 cents — well above the 63-cent average analyst expectation, according to Benzinga. Looking ahead, the company reduced its full-year adjusted EPS target to $3.19; analysts had been modeling $3.38, and the prior guidance range had been $3.35 to $3.38.
Share buybacks totaled $50 million during the quarter, with 613,725 shares of Class A common stock purchased and retired. At quarter-end on March 31, the balance sheet showed $652 million in cash and marketable securities.