Planet Fitness Reports Upbeat Q2 Results Fueled by Gen Z

Planet Fitness said its second-quarter results reinforce how the company’s fitness experience “continues to resonate with consumers.”

On a Thursday (Aug. 2) earnings call, CEO Chris Rondeau highlighted the strong demand for the brand, which ended the quarter with over 18.4 million members, 300,000 of whom were onboarded during the second quarter alone. The company also reported system-wide same-store sales growth of 8.7% and the addition of 26 stores in Q2, bringing its global store count to 2,472.

Breaking down membership growth, Rondeau said although all generational groups in the United States have surpassed their pre-pandemic penetration levels, Gen Zs are leading the pack, with more than 2.8 million of them signing up in 2023 so far via the company’s high school summer pass program, currently in its third year.

“We’re focused on building lifelong brand loyalty with this generation by giving them free access during the summer so they can develop long lasting healthy habits and experience all the benefits of fitness,” Rondeau said. “We want to be the brand they think of when they’re ready to join a gym.”

On the downside, the results pointed to an ongoing need to engage and retain members, as non-use remains the top reason why members cancel their memberships. According to Rondeau, strategies implemented by Planet Fitness are paying off, with the average tenure on memberships increasing alongside an improvement in the cancel rate, which has continued its year-over-year decline for the eighth straight quarter.

Planet Fitness is also facing challenges in the post-pandemic landscape. Franchisees are seeking grace periods to navigate the uncertainties caused by the COVID-19 pandemic, and the cost of constructing new gyms remains 25% higher than pre-pandemic levels.

Rondeau acknowledged the challenges faced by franchisees, explaining that “the cost to build a new gym remains 25% higher than pre-COVID [and] we’re seeing a 16% decline in the vacancy rate of retail space versus pre-pandemic, making it slightly more difficult for our franchisees to find the right space in the right location.”

Looking ahead, the company said it plans to invest more than $250 billion this year to drive growth, as it aims to become the go-to fitness option for the 80% of the population without a gym membership.