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23 Feb 2024
Planet Fitness gears up to enter Spain after a strong year-end
BY
Kath Hudson
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Planet Fitness increased sales by 8.7 per cent last year
photo: Planet Fitness
As Planet Fitness announces strong year-end results there are reports the company is planning a move into the Spanish market. CFO Tom Fitzgerald is also stepping down.
The company's forecasts for 2024 show it expects to slightly underperform targets this year.
With its low-cost model and non-intimidating environment, known as the Judgement Free Zone, Planet Fitness will add to the competition hotting up in Spain with Vivagym, Énergie and Basic-Fit among the operators who are expanding there.
After acquiring RSG Group’s portfolio of 47 clubs in December and with an existing portfolio of 140 clubs, Basic Fit is currently the Iberian market leader.
Interim CEO of Planet Fitness, Craig Benson – who took over when Chris Rondeau was ousted September – celebrated the company’s year-end results which saw total revenue up 14.4 per cent to US$1.1 billion (€1.02 billion, £870 million) from the previous year.
System-wide same store sales increased by 8.7 per cent and adjusted EBITDA went up 19 per cent to US$435.4 million (€402 million, £343 million).
For the fourth quarter of 2023, total revenue increased US$3.8 million (€3.5 million, £3 million) or 1.4 per cent from the prior year period, including system-wide same store sales growth of 7.7 per cent.
The 2023 results were largely delivered on Chris Rondeau's watch, so the forecast of a fall in performance under the new leadership is expected to disappoint shareholders.
Commenting, Benson said: "In 2023, we proactively developed the New Growth Model to fuel long-term sustainable store growth, focused on enhancing returns and reducing the capital requirements for opening and maintaining a Planet Fitness franchise location.
"The New Growth Model will provide our franchisees with additional flexibility to build their store portfolios for years to come.
"While we believe that 2024 will be a transition year, as our franchisees incorporate the changes into their growth plans, given our consistent and predictable asset-light model we believe we can deliver between 10 and 11 per cent adjusted EBITDA growth, enabling us to generate significant cashflow to invest in the business and return capital to shareholders via our share repurchase programme.”
Following the launch of 165 new stores during 2023 and based on results of recent third-party studies, the total store opportunity has been expanded to 5,000 in the US, up from the original 4,000 communicated at the time of the IPO in 2015. At the end of last year, 2,575 stores were open in the US.
Benson paid tribute to Fitzgerald, who announced his intention to retire in August, following four years with the company.
"Tom has been a great asset to Planet Fitness, having brought with him a wealth of knowledge and insight gained from a 40-year career in finance and executive leadership,” says Benson.
Fitzgerald said the experience of working for Planet Fitness has been gratifying and as the company enters its next phase of growth, now is the right time to go.
Founded in 1992, Planet Fitness is one of the world’s largest and fastest-growing franchisors and operators of fitness centres, by number of members and locations, with stores in the US, Puerto Rico, Panama, Mexico, Canada and Australia.
Former CEO, Chris Rondeau, had been with the company since the early days, starting out on the gym floor and rising to CEO. He talked with HCM last year about his “school of hard knocks route” to the top.
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