Fitness-center chain Planet Fitness (PLNT) reported fourth-quarter earnings after the close that topped estimates, citing “increasingly favorable real estate trends,” and the company forecast big gains to come for the year. Planet Fitness stock rose after hours.
Planet Fitness Earnings
Revenue for the chain rose 30.1% to $174.4 million. The results just beat Wall Street’s forecast for $173.69 million. Wall Street expected Planet Fitness earnings per share to jump 33% to 32 cents. But the earnings came in higher, at 34 cents.
Same-store sales rose 10.1%, marking the company’s 48th straight quarter of positive same-stores sales gains.
For the full year, Planet Fitness forecast a roughly 15% revenue gain. Analysts currently expect $637.15 million in revenue for 2019. That would mark an 11% gain from the $572.9 million Planet Fitness logged for all of last year.
Planet Fitness also said it expected a 25% jump in adjusted earnings per share. Wall Street forecast EPS of $1.43 for 2019, which would be a 17% gain from the $1.22 per share Planet Fitness earned in 2018.
The company said it expected same-store sales to increase “in the high single digits.” That’s a slight deceleration from the 10.2% posted last year.
Planet Fitness Stock
Planet Fitness stock jumped 2.5% to 58.30 after hours in the stock market today. The IBD 50 stock on Friday briefly topped a 59.62 flat-base entry, touching a record 61.51 before drifting lower. Shares continued falling Monday.
Planet Fitness stock on Tuesday was finding support at its 50-day line. The 50-day line is a key test of investors’ support in a stock. Planet Fitness stock traded tightly for much of this year.
‘Amazonian’ Business Model?
The attempted breakout by Planet Fitness stock on Friday came after a Jefferies analyst said the company had an “Amazonian business model” that protected it from competition.
The analyst, Randal Konik, likened the company to a “platform,” along the lines of Netflix (NFLX) and Amazon, that could drive sales and consumer commitment.
That platform, he said, consisted of digital services like an app that makes for smoother service. More “premium memberships,” advertising, and a broader array of gym equipment could help create more loyal customers. The company’s Black Card perks program has room to grow. Franchising should keep expansion brisk and lighten the company’s costs.
And in some ways, Amazon (AMZN), which has forced physical retailers to clear out of stores over the years, has also helped companies like Planet Fitness grow.
“From our group of experienced franchisees who are eager to expand their footprints to increasingly favorable real estate trends, our growing national and local advertising budgets and our initiatives aimed at enhancing the member experience, we believe there are tremendous opportunities to build on our recent accomplishments,” Planet Fitness CEO Chris Rondeau said in a statement on Tuesday.
‘Robust’ Fitness Industry
Planet Fitness last year said it would “work to build upon our current momentum as brick-and-mortar retail continues to be under pressure from online businesses.” Management added that “landlords are increasingly looking to Planet Fitness to drive traffic in their centers.”
Konik said that the fitness industry remains “robust,” as rival high-value, low-price gyms expand as well.
But the discount fitness center market remains fairly scattered. Only a handful have more than 100 stores to their name, compared to Planet Fitness’ 1,650. Konik said Planet Fitness’ “marketing engine allows it to pull away from the pack.”
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