Planet Fitness stock plunges after company slashes guidance
CNBC • • business
Key Points:
- Planet Fitness shares dropped over 30% following the company's report of slower-than-expected member sign-ups and a downward revision of its financial guidance.
- Despite 21.9% revenue growth and a 3.5% increase in same club sales in the first fiscal quarter, CEO Colleen Keating cited internal and external challenges that impacted net member growth.
- The company lowered its revenue growth forecast from 9% to 7%, cut expected same club sales growth to 1% from 4-5%, and now anticipates a 2% decline in adjusted net income, down from an earlier forecasted increase.
- Factors contributing to the weaker performance included ineffective marketing resonance, increased competition, adverse weather, and macroeconomic pressures, prompting Planet Fitness to adjust its marketing strategy and pause planned price increases.
- CEO Keating reaffirmed confidence in the company's long-term growth strategy, emphasizing a renewed focus on member acquisition and affordability to better appeal to casual gym-goers.
