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Planet Fitness (PLNT) Q4 Earnings in Line With Estimates

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Planet Fitness, Inc. PLNT reported fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues surpassing the same. The metrics increased on a year-over-year basis. The company benefited from increased membership levels and positive system-wide same store sales growth.

Chris Rondeau, chief executive officer, Planet Fitness, stated, “We exceeded our expectations for both members and new store growth in 2021, which we believe demonstrates that our message of fitness being essential to both physical and mental health is resonating with consumers”

Earnings & Revenue Discussion

During the fourth quarter, the company reported adjusted earnings per share (EPS) of 26 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted earnings of 17 cents per share.

Planet Fitness, Inc. Price, Consensus and EPS Surprise

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

Total adjusted EBITDA at the end of the fourth quarter came in at $63 million compared with $51.1 million reported in the year-ago quarter.

Quarterly revenues of $183.6 million beat the consensus mark of $180 million by 2%. The top line also surged 37.3% from the year-ago quarter’s levels on account of solid performances in the Franchise, Corporate-owned Stores and Equipment segments. During the quarter, system-wide same store sales increased 12.3% year over year compared with growth of 7.2% reported in the previous quarter.

Segmental Performance

During fourth-quarter 2021, Franchise segment revenues came in at $78.4 million compared with $66.9 million reported in the prior-year quarter. The upside was driven by solid contributions from new stores and from stores that were shut in the prior year due to COVID-19 ($6.2 million), rise in franchise same store sales ($5.5 million), equipment placement revenue ($2.3 million), franchise and other fees ($2.2 million). However, this was partially offset by lower National Advertising Fund revenues ($2.9 million) and annual fee revenues ($1.8 million). EBITDA in the Franchise segment came in at $49.3 million compared with $43.6 million reported in the prior-year quarter.

The Corporate-owned Stores segment’s fourth-quarter revenues came in at $44.9 million compared with $38.9 million in the prior-year quarter. The increase was primarily driven by a rise in same store sales. This along with revenues accumulated from new stores as well as from the resumption of operations at its temporarily-closed stores added to the upside. The segment’s EBITDA came in at $14 million compared with $12.3 million reported in the prior-year quarter.

In the Equipment segment, revenues totaled $32.4 million compared with $28 million in the prior-year quarter. The uptick was primarily driven by higher equipment sales to new and existing franchisee-owned stores and discount offerings. EBITDA in the Equipment segment came in at $14.3 million compared with $3.1 million reported in the prior-year quarter.

Other Financial Details

As of Dec 31, 2021, cash and cash equivalents totaled $545.9 million compared with $439.5 million as of Dec 31, 2020. Long-term debt (net of current maturities) amounted to $1,665.3 million at the end of fourth-quarter 2021 compared with $1,676.4 million at the prior-quarter end.

2021 Highlights

Total revenues in 2021 came in at $587 million compared with $406.6 million reported in 2020.

Adjusted EBITDA in 2021 came in at $224.4 million compared with $120.4 million reported in 2020.

In 2021, adjusted earnings per share (EPS) came in at 82 cents compared with 4 cents reported in the previous year.

2022 Outlook

For 2022, the company expects revenues to increase in the mid-50% range over 2021 levels. Adjusted EBITDA for 2022 is estimated to increase in the high-50% range, while adjusted net income is anticipated at the low-90% range over 2021 levels. The company expects adjusted EPS to increase in the mid-80% range over 2021 levels. The metrics are based on the assumption of potential impact from the Sunshine Fitness acquisition and that there is no significant worsening of the COVID-19 pandemic that seriously impacts performance.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Cedar Fair, L.P. FUN, Crocs, Inc. CROX and Marriott International, Inc. MAR.

Cedar Fair flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 16.3%, on average. Shares of Cedar Fair have gained 13.7% in the past year.

The Zacks Consensus Estimate for FUN’s 2022 sales and EPS suggests growth of 32.6% and 612.7%, respectively, from the year-ago period’s levels.

Crocs carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 36%, on average. Shares of Crocs have increased 9.4% in the past year.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.6% and 22.1%, respectively, from the year-ago period’s levels.

Marriott carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 86.6%, on average. Shares of Marriott have increased 13.9% in the past year.

The Zacks Consensus Estimate for MAR’s 2022 sales and EPS suggests growth of 40.3% and 73%, respectively, from the year-ago period’s levels.


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