Speaker 1: Bloomberg Audio Studios, Podcasts Radio News got now for our
Speaker 1: socc at the Hour taking a look at Shares a
Speaker 1: Planet business. They've been under pressure all day long, the
Speaker 1: biggest drop going back to twenty twenty three. Fourth quarter
Speaker 1: results for the company actually did come in above estimates
Speaker 1: both on a revenue basis and on the bottom line,
Speaker 1: but the forecast that the company gave going forward here
Speaker 1: implies maybe slightly below what the street was looking for.
Speaker 1: Joining us right now to talk about the health of
Speaker 1: the business and where it goes next is Colleen King.
Speaker 1: She's a CEO over at Planet Fitness. All right, Colleen,
Speaker 1: I got to start with the forecast here because that
Speaker 1: seems to be what the market's reacting to. The EBODOC
Speaker 1: growth number, about ten percent growth on an adjusted basis,
Speaker 1: but that's below what the street was expecting. There seemed
Speaker 1: to be this expectation that with some of the pricing
Speaker 1: changes that you've made, the rollout of the black card program,
Speaker 1: that we would maybe see a little bit more meaningful
Speaker 1: growth on the bottom line.
Speaker 2: What's going on, well, Remaine, we landed a very strong
Speaker 2: twenty twenty five and think that's much reflective of the
Speaker 2: momentum in the business and evidence that our strategic comparatives
Speaker 2: are delivering. You know, our first imperative was our brand
Speaker 2: promise and pulling it through our marketing, and that resulted
Speaker 2: in one point one million net new members for twenty
Speaker 2: twenty five, a ten percent lift versus the prior year,
Speaker 2: and that was on top of a fifty percent lift
Speaker 2: in our entry price point, the classic price point from
Speaker 2: ten dollars to fifteen dollars for the full year twenty
Speaker 2: twenty five. From a member experience standpoint, we're seeing members
Speaker 2: utilizing our clubs more frequently. Utilization is up, as is
Speaker 2: the percentage of members who are rejoining. We're seeing a
Speaker 2: mid thirty percent rejoin rate. Our format optimization is resonating.
Speaker 2: We finished the year with eighty percent or nearly eighty
Speaker 2: percent of our estate with some version of an optimized
Speaker 2: format and new equipment package, and all of this culminates
Speaker 2: in growth, and we had our highest fourth quarter unit
Speaker 2: openings number in the history of the company in the
Speaker 2: fourth quarter of twenty twenty five and finished the year
Speaker 2: with one hundred and eighty one units. So strong, strong growth,
Speaker 2: and we remain confident in the three year Kaiger that
Speaker 2: we outlined at our investor a day in November, So
Speaker 2: you know, strong momentum.
Speaker 1: Well, that's what I'm curious about. I mean, you're obviously
Speaker 1: going through a bit of a transition here, kind of
Speaker 1: reimagining the space of what meaning the physical space and
Speaker 1: just really the ethos of what planet Fitness is. I
Speaker 1: assume there are costs associated with that. Are those costs
Speaker 1: permanent or is this just kind of a temporary thing
Speaker 1: with regards to the revamping of the locations in any
Speaker 1: marketing costs associated with it.
Speaker 2: Yeah. One of the beautiful things about our model is
Speaker 2: its high efficiency, and our franchisees have invested, have made
Speaker 2: the investments in the equipment packages to optimize the format.
Speaker 2: That said, one of the things that we rolled out
Speaker 2: in twenty twenty four was our new growth model, and
Speaker 2: this was to help our franchisees with their unit economics
Speaker 2: and their IRRs. That is one of the things that's
Speaker 2: influencing our guidance for twenty twenty six. This is the
Speaker 2: first year we'll see a little bit of a push
Speaker 2: out in equipment in equipment revenue. That was intentional and
Speaker 2: again that was anticipated in the three year projections that
Speaker 2: we rolled out.
Speaker 3: Now, Colleen, I also want to dig into your membership
Speaker 3: growth a little bit. You did mention an uplift there
Speaker 3: twenty million use more than twenty million members at the moment.
Speaker 3: Where do you think the next leg of membership growth
Speaker 3: comes from? Is it a matter of improving the pricing
Speaker 3: or perhaps finding you customer segments to penetrate, maybe adding
Speaker 3: more units.
Speaker 2: So a couple of things. So we finished at twenty
Speaker 2: point eight million members or nearly twenty one million members,
Speaker 2: and our you know, our reach is on paralleled. We
Speaker 2: have a club within twelve minutes of one hundred and
Speaker 2: seventy million of the US population. And at the same time,
Speaker 2: we are in the golden age of fitness. I mean,
Speaker 2: you can't open a news feed without reading about the
Speaker 2: importance of fitness and wellness and how it contributes to
Speaker 2: mental health as well. So interest in interest in working
Speaker 2: out and fitness and wellness has never been higher. We
Speaker 2: know that there are about fifty to sixty million people
Speaker 2: adults in the US are that think about a gym
Speaker 2: membership and express a willingness to pay. And there are
Speaker 2: also about fifty to sixty million people in the US
Speaker 2: who who have a gym membership. Who you know are
Speaker 2: in the tam that that you know we could convert
Speaker 2: to Planet Fitness as well. So a tremendous opportunity to
Speaker 2: continue growing membership.
Speaker 1: Calling only about a minute left. But I am curious
Speaker 1: as to who you're positioning yourself against. You're like, who
Speaker 1: are your competitors? Are you going up against the big
Speaker 1: global jams, the boutique kind of fitness craze that's popped up.
Speaker 2: Who we you know? We are solidly the industry leader
Speaker 2: in the high value, low price space at a very
Speaker 2: approachable price point. We democratized access to fitness while bringing
Speaker 2: to bear a great offering of top shelf equipment. And
Speaker 2: what makes us unique is that we have a judgment free,
Speaker 2: no you know, no gym timidation environment that's welcoming to
Speaker 2: all fitness levels.
Speaker 1: All right, Colleen, I have to leave it there. I
Speaker 1: really appreciate you joining us today, Colleen getting CEO over
Speaker 1: aad Planet Fitness