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Planet Fitness (PLNT) Q4 Earnings & Revenues Beat Estimates

Planet Fitness, Inc. PLNT reported impressive fourth-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis. Following the announcement, shares of the company increased 5.3% during trading hours on Feb 23.

Chris Rondeau, chief executive officer, Planet Fitness, stated, “We ended 2022 with record membership growth in the fourth quarter, which created great momentum coming into Q1 of this year. Driving the member growth was a strong December national sale, fueled by a more coordinated marketing agency structure enabling us to better leverage data analytics to optimize national and local media spend."

Earnings & Revenue Discussion

During the fourth quarter, the company reported adjusted earnings per share (EPS) of 53 cents, beating the Zacks Consensus Estimate of 47 cents. In the prior-year quarter, the company reported an adjusted EPS of 26 cents.

Quarterly revenues of $281.3 million beat the consensus mark of $269 million. Moreover, the top line surged 53.2% from the year-ago quarter’s levels, driven by solid performances in the Franchise, Corporate-owned Stores and Equipment segments. During the quarter under review, system-wide same-store sales increased 9% year over year compared with growth of 8.2% reported in the previous quarter.

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 was $106.1 million compared with $62.2 million reported in the year-ago quarter.

Segmental Performance

During fourth-quarter 2022, Franchise segment revenues were $86.3 million, up 10% year over year. The upside was driven by solid contributions from royalty revenues ($3.9 million), franchise same-store sales ($4.3 million), new stores ($1.6 million) and royalties on annual fees ($0.6 million). Also, a $1.1-million gain in National Advertising Fund (NAF) revenues and a $2.2-million surge in equipment placement revenues added to the positives. However, the upside was partially negated by a $2.6-million reduction on account of the Sunshine Acquisition of stores in the first quarter of 2022.

EBITDA in the Franchise segment was $48.9 million compared with $49.3 million reported in the prior-year quarter.

The Corporate-owned Stores segment’s fourth-quarter revenues amounted to $100.5 million compared with $44.9 million reported in the prior-year quarter. The increase can primarily be attributed to a rise in same-store sales and new store openings. The acquisition of 114 stores through the Sunshine Fitness buyout contributed $50 million to the segment’s revenues. The segment’s EBITDA totaled $38.8 million compared with $14 million reported in the prior-year quarter.

In the Equipment segment, revenues totaled $94.6 million compared with $60.4 million reported in the prior-year quarter. The uptick was primarily driven by higher equipment sales to new and existing franchisee-owned stores. EBITDA in the Equipment segment was $24.4 million compared with $14.3 million reported in the prior-year quarter.

Other Financial Details

As of Dec 31, 2022, cash and cash equivalents totaled $409.8 million compared with $404.5 million as of Sep 30, 2022. Long-term debt (net of current maturities) amounted to $1,978.1 million at the end of fourth-quarter 2022 compared with $1,982.2 million at the prior-quarter end.

2022 Highlights

Total revenues in 2022 came in at $936.8 million compared with $587 million reported in 2021.

Adjusted EBITDA in 2022 came in at $365.8 million compared with $222.3 million reported in 2021.

In 2022, adjusted net income per share (diluted) came in at $1.64 compared with 80 cents reported in the previous year.

2023 Outlook

For 2023, the company expects revenues to increase in the 13-14% range over 2022 levels. Adjusted EBITDA for 2023 is estimated to increase in the 17-18% range, while adjusted net income is anticipated at the 30-33% range over 2022 levels. The company expects adjusted EPS to increase in the 33-36% range over 2022 levels. For 2023, the company anticipates adjusted diluted shares outstanding to be approximately 89.5 million (inclusive of 1 million shares repurchase over the course of the year).

The metrics are based on the assumption of no significant worsening of the COVID-19 pandemic and supply chain disruptions.

Zacks Rank & Stocks to Consider

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.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. OSW, Las Vegas Sands Corp. LVS and Playa Hotels & Resorts N.V. PLYA.

OneSpaWorld currently sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 68.3%, on average. Shares of the company have increased 12.5% in the past year.

The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 23.2% and 75%, respectively, from the year-ago period’s levels.

Las Vegas Sands sports a Zacks Rank #1. LVS has a long-term earnings growth rate of 4.9%. The stock has increased 29.5% in the past year.  

The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 100.8% and 217.5%, respectively, from the year-ago period’s estimated levels.  

Playa Hotels sports a Zacks Rank #1. PLYA has a trailing four-quarter earnings surprise of 19.4%, on average. Shares of the company have declined 2.9% in the past year.  

The Zacks Consensus Estimate for PLYA’s 2023 sales and EPS indicates a rise of 7.9% and 34.7%, respectively, from the year-ago levels.

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