Post Earnings Coverage as Planet Fitness Earnings Buffs up by 28 Percent

August 18, 2016   |   9:15 am

Contributor: Tom Johnson, Active Wall Street

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Active Wall St. announces its post-earnings coverage on Planet Fitness, Inc. (NYSE: PLNT). The company reported results on August 11, 2016. One of the largest fitness chains of budget-priced gyms in America posted another period of stellar financial results and also updated its guidance. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on PLNT. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=PLNT.

Earnings Reviewed

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For the second quarter ended on June 30, 2016, Planet Fitness reported net income of $18.1 million, or $0.11 per share, compared to $11.6 million in the year ago quarter. On an adjusted basis, the company’s earnings were $16.8 million, or $0.17per share, up 28% from $13.2 million in the year earlier quarter. The company’s revenue rose 15.9% to $91.5 million. Analysts had projected adjusted earnings of $0.15 per share on $85 million in revenue. The company has topped Wall Street’s forecast by a double-digit percentage margin in every quarter since it made its debut on the stock exchange in August 2015.

The Newington, New Hampshire, headquartered Planet Fitness reported another period of double-digit growth, driven by a 7.6% hike in same-store sales (above the 5.9% predicted by analysts), and franchisees opening 36 stores during Q2 FY16, to hit 1,206 total locations with nearly 8.6 million members.

Segment Analysis

During Q2 FY16, revenue from Planet Fitness Franchise’s segment, which includes commission income, and accounts for nearly a third of the company’s revenue, increased $7.6 million, or 34.7%, to $29.5 million from $21.9 million in Q2 FY15. The 58, corporate-owned gyms reported revenue growth of $1.4 million or 5.6% to $26.4 million from $25.0 million in the year earlier quarter. The Equipment segment’s revenue increased $3.5 million or 10.9% to $35.6 million from $32.1 million. The company attributed the increase in replacement equipment sales to existing franchisee-owned stores.

At the end of the reported quarter, the company had $55.6 million in cash compared to $31.43 million it had at the end of December 31, 2016. Planet fitness liabilities have also increased due to a secondary public offering in June 2016. The company completed a secondary offering of 11.5 million shares of its Class a common stock at a price of $16.50 per share. All of the proceeds went to its existing stake holders and the company did not receive any proceeds from the sale.

Outlook

For the year ending on December 31, 2016, the fitness chain is expecting franchisees to open between 210 and 220 new stores. Planet Fitness expects annual revenue in the range of $366 million to $372 million, up from its previous outlook of $360 million to $370 million. The company is projecting revenue in the range of $366 million to $372 million for the year, while it also raised its forecast for adjusted net income of $62 million to $65 million with adjusted earnings of $0.62 per share to $0.65 per share. Additionally, Planet Fitness now sees same-store sales rising by a percentage in the high-single digits for the year, better than the previous prediction for growth in the mid-single digits. Analysts project earnings of $0.65 per share on $366 million in revenue.

Stock Performance

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The company’s shares closed the session at $21.67, down 2.03% on total volume of 557,742. The stock has advanced 5.86% in the last one month and 30.23% in the last three months. Moreover, since the beginning of the year, Planet Fitness’ shares have gained 38.64%.

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