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Speaker 1: Bloomberg Audio Studios, Podcasts Radio News got now for our

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Speaker 1: socc at the Hour taking a look at Shares a

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Speaker 1: Planet business. They've been under pressure all day long, the

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Speaker 1: biggest drop going back to twenty twenty three. Fourth quarter

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Speaker 1: results for the company actually did come in above estimates

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Speaker 1: both on a revenue basis and on the bottom line,

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Speaker 1: but the forecast that the company gave going forward here

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Speaker 1: implies maybe slightly below what the street was looking for.

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Speaker 1: Joining us right now to talk about the health of

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Speaker 1: the business and where it goes next is Colleen King.

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Speaker 1: She's a CEO over at Planet Fitness. All right, Colleen,

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Speaker 1: I got to start with the forecast here because that

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Speaker 1: seems to be what the market's reacting to. The EBODOC

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Speaker 1: growth number, about ten percent growth on an adjusted basis,

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Speaker 1: but that's below what the street was expecting. There seemed

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Speaker 1: to be this expectation that with some of the pricing

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Speaker 1: changes that you've made, the rollout of the black card program,

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Speaker 1: that we would maybe see a little bit more meaningful

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Speaker 1: growth on the bottom line.

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Speaker 2: What's going on, well, Remaine, we landed a very strong

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Speaker 2: twenty twenty five and think that's much reflective of the

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Speaker 2: momentum in the business and evidence that our strategic comparatives

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Speaker 2: are delivering. You know, our first imperative was our brand

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Speaker 2: promise and pulling it through our marketing, and that resulted

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Speaker 2: in one point one million net new members for twenty

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Speaker 2: twenty five, a ten percent lift versus the prior year,

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Speaker 2: and that was on top of a fifty percent lift

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Speaker 2: in our entry price point, the classic price point from

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Speaker 2: ten dollars to fifteen dollars for the full year twenty

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Speaker 2: twenty five. From a member experience standpoint, we're seeing members

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Speaker 2: utilizing our clubs more frequently. Utilization is up, as is

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Speaker 2: the percentage of members who are rejoining. We're seeing a

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Speaker 2: mid thirty percent rejoin rate. Our format optimization is resonating.

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Speaker 2: We finished the year with eighty percent or nearly eighty

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Speaker 2: percent of our estate with some version of an optimized

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Speaker 2: format and new equipment package, and all of this culminates

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Speaker 2: in growth, and we had our highest fourth quarter unit

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Speaker 2: openings number in the history of the company in the

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Speaker 2: fourth quarter of twenty twenty five and finished the year

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Speaker 2: with one hundred and eighty one units. So strong, strong growth,

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Speaker 2: and we remain confident in the three year Kaiger that

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Speaker 2: we outlined at our investor a day in November, So

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Speaker 2: you know, strong momentum.

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Speaker 1: Well, that's what I'm curious about. I mean, you're obviously

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Speaker 1: going through a bit of a transition here, kind of

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Speaker 1: reimagining the space of what meaning the physical space and

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Speaker 1: just really the ethos of what planet Fitness is. I

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Speaker 1: assume there are costs associated with that. Are those costs

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Speaker 1: permanent or is this just kind of a temporary thing

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Speaker 1: with regards to the revamping of the locations in any

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Speaker 1: marketing costs associated with it.

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Speaker 2: Yeah. One of the beautiful things about our model is

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Speaker 2: its high efficiency, and our franchisees have invested, have made

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Speaker 2: the investments in the equipment packages to optimize the format.

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Speaker 2: That said, one of the things that we rolled out

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Speaker 2: in twenty twenty four was our new growth model, and

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Speaker 2: this was to help our franchisees with their unit economics

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Speaker 2: and their IRRs. That is one of the things that's

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Speaker 2: influencing our guidance for twenty twenty six. This is the

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Speaker 2: first year we'll see a little bit of a push

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Speaker 2: out in equipment in equipment revenue. That was intentional and

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Speaker 2: again that was anticipated in the three year projections that

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Speaker 2: we rolled out.

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Speaker 3: Now, Colleen, I also want to dig into your membership

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Speaker 3: growth a little bit. You did mention an uplift there

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Speaker 3: twenty million use more than twenty million members at the moment.

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Speaker 3: Where do you think the next leg of membership growth

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Speaker 3: comes from? Is it a matter of improving the pricing

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Speaker 3: or perhaps finding you customer segments to penetrate, maybe adding

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Speaker 3: more units.

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Speaker 2: So a couple of things. So we finished at twenty

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Speaker 2: point eight million members or nearly twenty one million members,

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Speaker 2: and our you know, our reach is on paralleled. We

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Speaker 2: have a club within twelve minutes of one hundred and

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Speaker 2: seventy million of the US population. And at the same time,

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Speaker 2: we are in the golden age of fitness. I mean,

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Speaker 2: you can't open a news feed without reading about the

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Speaker 2: importance of fitness and wellness and how it contributes to

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Speaker 2: mental health as well. So interest in interest in working

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Speaker 2: out and fitness and wellness has never been higher. We

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Speaker 2: know that there are about fifty to sixty million people

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Speaker 2: adults in the US are that think about a gym

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Speaker 2: membership and express a willingness to pay. And there are

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Speaker 2: also about fifty to sixty million people in the US

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Speaker 2: who who have a gym membership. Who you know are

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Speaker 2: in the tam that that you know we could convert

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Speaker 2: to Planet Fitness as well. So a tremendous opportunity to

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Speaker 2: continue growing membership.

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Speaker 1: Calling only about a minute left. But I am curious

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Speaker 1: as to who you're positioning yourself against. You're like, who

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Speaker 1: are your competitors? Are you going up against the big

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Speaker 1: global jams, the boutique kind of fitness craze that's popped up.

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Speaker 2: Who we you know? We are solidly the industry leader

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Speaker 2: in the high value, low price space at a very

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Speaker 2: approachable price point. We democratized access to fitness while bringing

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Speaker 2: to bear a great offering of top shelf equipment. And

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Speaker 2: what makes us unique is that we have a judgment free,

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Speaker 2: no you know, no gym timidation environment that's welcoming to

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Speaker 2: all fitness levels.

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Speaker 1: All right, Colleen, I have to leave it there. I

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Speaker 1: really appreciate you joining us today, Colleen getting CEO over

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Speaker 1: aad Planet Fitness