Planet Fitness Targets 6% Same-Store Growth in 2025 Despite Online Cancellations and Member Growth

Overview of Planet Fitness's Q2 2025 Earnings Call

Planet Fitness (PLNT) delivered a strong performance in the second quarter of 2025, showcasing continued growth and strategic initiatives that are reinforcing its position in the fitness industry. The company reported impressive metrics across several key areas, including membership growth, revenue expansion, and operational efficiency.

Leadership Insights and Strategic Focus

CEO Colleen Keating highlighted the company’s decade-long journey, emphasizing the significant milestones achieved. Over the past ten years, Planet Fitness has added nearly 14 million members, expanded its global footprint by over 1,700 clubs, and established a presence in all 50 U.S. states as well as four additional countries. As of June 30, 2025, the company operates 2,762 clubs with 20.8 million members.

Keating noted an 8.2% systemwide same club sales growth for the quarter, along with the addition of 23 new clubs. She also emphasized the importance of Gen Z as the fastest-growing segment, citing the success of the High School Summer Pass program, which has already surpassed last year's sign-ups and workouts.

Additionally, Black Card penetration reached 65.8%, a 340 basis point increase from the previous year. Management is currently evaluating potential future price increases for the Black Card, indicating ongoing efforts to enhance value for premium members.

In alignment with the company’s asset-light model, Planet Fitness sold eight corporate clubs in California to a franchisee, focusing more on East Coast operations. This move reflects a strategic shift to optimize resources and maintain a competitive edge.

Financial Performance and Outlook

CFO Jay Stasz shared positive financial results, noting that the company is on track to meet its full-year growth targets. He highlighted the strength of Planet Fitness's value proposition and the resilience of its asset-light business model. Stasz also addressed the impact of online membership management and the sale of California clubs, both of which were incorporated into the company’s outlook.

Looking ahead, Planet Fitness reiterated its expectation of opening between 160 and 170 new clubs in 2025, with a heavier focus on the fourth quarter. Equipment placements in new franchise clubs are projected at 130 to 140, also back-end loaded.

The company narrowed its systemwide same club sales growth guidance to approximately 6%, down from the previous range of 5% to 6%. However, revenue, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share guidance remained unchanged. Revenue and adjusted EBITDA are expected to grow around 10%, while adjusted net income is projected to increase by 8% to 9%, and adjusted net income per diluted share is anticipated to rise by 11% to 12%.

Stasz explained that the revised guidance was influenced by factors such as the rollout of the Classic Card price increase, elevated attrition rates due to the national rollout of online cancellation, and the continuing volatile macroeconomic environment.

Operational Highlights and Market Expansion

System-wide same club sales grew by 8.2%, with franchise same club sales up 8.3% and corporate same club sales increasing by 7.0%. Total revenue for the quarter reached $340.9 million, up from $300.9 million. The franchise segment saw an 11% revenue increase, while the corporate owned club segment grew by 10.8%. The equipment segment revenue rose by 21.5%.

Net income was $58.3 million, with adjusted net income reaching $72.6 million. Adjusted net income per diluted share was $0.86, and adjusted EBITDA hit $147.6 million with a margin of 43.3%. Cash, cash equivalents, and marketable securities totaled $582.5 million as of June 30, 2025.

Analyst Questions and Management Responses

During the Q&A session, analysts raised questions about club layout optimization, equipment mix, and international expansion. Keating mentioned that over 70% of clubs will be on some version of format optimization by the end of the year, featuring a more balanced mix of cardio and strength equipment.

Regarding new Black Card amenities, Keating indicated that some clubs are piloting these features, but they are still in the evaluation phase. When asked about population density and market expansion, Keating noted testing smaller footprints and rural locations for growth.

Analysts also inquired about churn normalization following the click-to-cancel rollout. Stasz acknowledged slightly elevated cancel rates but stated that the impact is now factored into the full-year outlook. Keating added that cancel rates generally moderate after about 12 weeks post-rollout.

Sentiment and Market Positioning

Analysts’ questions reflected a cautious yet engaged tone, focusing on churn, pricing, club format optimization, and international expansion. Management maintained a confident outlook, emphasizing strong results and the company’s resilience. Phrases like “we feel good about where we're at” and “it makes all the sense in the world” underscored their confidence.

Compared to the previous quarter, the tone remained confident, with more emphasis on addressing elevated churn and the impact of online cancellations. Analysts showed ongoing curiosity about the sustainability of recent growth and the effects of operational changes, resulting in a neutral-to-slightly-positive sentiment.

Risk Factors and Strategic Initiatives

Elevated attrition following the online cancellation rollout was acknowledged, with Stasz noting slightly higher cancel rates in both previously rolled-out and newly rolled-out clubs. The company cited macroeconomic volatility and the sale of California corporate clubs as factors influencing full-year guidance.

Ongoing competitive pressures from local and regional operators were discussed, with management expressing confidence in the brand’s positioning. Strategic initiatives, including the sale of California corporate clubs and continued international expansion, aim to drive long-term value and sustain growth for franchisees and shareholders.

Final Takeaway

Planet Fitness demonstrated strong membership growth and revenue expansion in Q2 2025, with progress in club format optimization, new club openings, and Black Card penetration. The narrowing of same club sales growth guidance reflects the anticipated impact from elevated attrition due to the national rollout of online cancellation functionality and ongoing macroeconomic uncertainty. Strategic initiatives, including the sale of California corporate clubs and continued international expansion, are designed to drive long-term value and sustain franchisee and shareholder growth.