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Planet Fitness (PLNT) Q2 Earnings & Revenues Beat Estimates

Zacks Equity Research

Planet Fitness, Inc. PLNT reported second-quarter 2019 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. With this, earnings outpaced the consensus mark for the seventeenth straight quarter. Notably, both the top and bottom line registered an improvement on a year-over-year basis. Quarterly results were driven by robust system-wide same-store sales growth as well as 53 store openings.

Adjusted earnings came in at 45 cents per share, which outpaced the consensus estimate of 41 cents. The bottom line also increased 32.4% on a year-over-year basis.

Meanwhile, revenues of $181.7 million surpassed the Zacks Consensus Estimate of $168 million and surged 29.3% on a year-over-year basis. The top line was driven by a sharp increase in the franchise, corporate-owned stores and equipment revenues. System-wide same-store sales increased 8.8% in the quarter under review.

Planet Fitness, Inc. Price, Consensus and EPS Surprise

Planet Fitness, Inc. Price, Consensus and EPS Surprise

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

Franchise revenues increased 23.5% to $71.8 million and the Corporate-owned Stores segment’s revenues surged 15.9% year over year to $39.7 million. At the Equipment segment, revenues rose 45.7% to $70.2 million owing to a rise in equipment sales to new stores and also sales of replacement equipment.

Moreover, EBITDA at the Franchise segment improved 24.5% to $49.9 million owing to a rise in royalties from new franchised stores and increase in same-store sales. At the Corporate-owned stores and Equipment segments, EBITDA increased 23.7% and 46.4% to $18.1 million and $16.8 million, respectively.

Total adjusted EBITDA at the end of the second quarter rose to $76.5 million from $58.4 million.

Other Financial Details

As of Jun 30, 2019, cash and cash equivalents totaled $330.6 million compared with $289.4 million as of Dec 31, 2018. Long-term debt, net of current maturities, summed $1,156.8 million at the end of second-quarter 2019 compared with $1,160.1 million at 2018 end.

2019 Outlook

For 2019, Planet Fitness expects revenue growth of nearly 18% year over year compared with the prior estimate of 15% improvement. System-wide same-store sales are likely to increase by nearly 8% compared with the prior estimate of high-single digits.

Furthermore, the company anticipates adjusted net income and earnings per share to increase nearly 20% in the current year.

Zacks Rank & Other Stocks to Consider

Planet Fitness has a Zacks Rank #2 (Buy). Other top-ranked stocks, which warrant a look in the leisure space include Acushnet Holdings Corp. GOLF, Callaway Golf Company ELY and YETI Holdings, Inc. YETI, each carrying the same rank as Planet Fitness. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Acushnet Holdings’ current-year earnings are likely to witness 15.9% growth year over year.

Callaway Golf Company and YETI Holdings have an impressive long-term earnings growth rate of 25% and 16.9%, respectively.

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