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Cramer On '2 Parallel Stories' In The Fitness Space

Jayson Derrick

The fitness industry is following "two parallel stories," according to CNBC's Jim Cramer.

Low-cost fitness chain Planet Fitness Inc (NYSE: PLNT) is performing just fine, but Weight Watchers International, Inc. (NASDAQ: WTW) is "dazed and confused" under its new WW brand.

What Happened

The "image-obsessed culture" of selfies has benefited the entire fitness sector, as people feel "a lot of pressure" to look their best, Cramer said during his daily "Mad Money" show Friday.

To take advantage of this trend, consumers are attracted to the Planet Fitness "no judgment" promise, the CNBC host said. The company not only has a "sense of its own identity," but it has "stayed the same from the very beginning," he said. 

On the other hand, Weight Watchers performed just fine under its old structure, as consumers simply paid a monthly fee for strategies to lose weight, Cramer said. But after transforming to the WW brand, the company is selling wellness advice, which is a "tougher sell," he said. 

Why It's Important

The old Weight Watchers brand certainly had its share of problems, but "you knew what Weight Watchers was for," Cramer said.

The new "identity crisis" was most apparent in its recent earnings report, which was an "ugly quarter with truly abysmal guidance," he said. 

Weight Watchers could have much to learn from Planet Fitness, the CNBC host said. The gym keeps to a simple formula in offering consumers a "fun" experience that "doesn't treat fitness like a religion," he said. 

What's Next

Investors should follow the simple concept of sticking "with what's working and avoid what's falling apart," Cramer said.

"That's why Planet Fitness, even after this run, is still very much a buy, and I think WW is way too risky for me to recommend." 

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