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Planet Fitness, Inc. PLNT reported first-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same. However, bot the metrics improved on a year-over-year basis. The company benefited from increased membership levels and positive system-wide same store sales growth.
Chris Rondeau, the CEO of Planet Fitness, stated, “During the first quarter we completed the acquisition of Sunshine Fitness, one of our best-performing franchisees as well as a successful refinancing of a portion of our debt. We are bullish on the future and believe that the acquisition strengthens our powerful business model by enhancing our corporate store team and diversifying the geographic profile of our corporate-owned stores, and the refinancing further supports our business model, by locking in low rates on a significant portion our debt.”
Earnings & Revenue Discussion
During the first quarter, the company reported adjusted earnings per share (EPS) of 32 cents, surpassing the Zacks Consensus Estimate of 27 cents. In the prior-year quarter, the company reported adjusted earnings of 10 cents per share.
Quarterly revenues of $186.7 million fell short of the consensus mark of $188 million. The top line surged 66.9% from the year-ago quarter’s levels, driven by solid performances in the Franchise, Corporate-owned Stores and Equipment segments. During the quarter under review, system-wide same store sales increased 15.9% year over year compared with growth of 12.3% reported in the previous quarter.
Total adjusted EBITDA at the end of the first quarter was $77.3 million compared with $43.7 million in the year-ago quarter.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Planet Fitness, Inc. price-consensus-eps-surprise-chart | Planet Fitness, Inc. Quote
Segmental Performance
During first-quarter 2022, Franchise segment revenues were $80.1 million, up 25% year over year. The upside was driven by a $9.9 million rise in franchise royalty revenues, a $2.4 million gain in National Advertising Fund (“NAF”) revenues, a $2.0 million growth in the franchise and other fees, and a $1.5 million surge in placement revenues.
EBITDA in the Franchise segment was $60.1 million compared with $41.2 million reported in the prior-year quarter.
The Corporate-owned Stores segment’s first-quarter revenues amounted to $76.2 million compared with $37.9 million in the prior-year quarter. The increase can primarily be attributed to a rise in same store sales. The acquisition of 114 stores through the Sunshine Fitness buyout contributed $28.7 million to the segment revenues. The segment’s EBITDA totaled $23.4 million compared with $10.7 million in the prior-year quarter.
In the Equipment segment, revenues totaled $30.4 million compared with $9.9 million in the prior-year quarter. The uptick was primarily driven by higher equipment sales to new and existing franchisee-owned stores. EBITDA in the Equipment segment was $8.7 million compared with $1.8 million in the prior-year quarter.
Other Financial Details
As of Mar 31, 2022, cash and cash equivalents totaled $471.2 million compared with $545.9 million as of Dec 31, 2021. Long-term debt (net of current maturities) amounted to $1,989.5 million at the end of first-quarter 2022 compared with $1,665.3 million at the prior-quarter end.
2022 Outlook
For 2022, the company continues to expect revenues to increase in the mid-50% range over the 2021 levels. Adjusted EBITDA for 2022 is estimated to rise in the high-50% range, while adjusted net income is anticipated at the low-90% range over the 2021 levels. The company anticipates adjusted EPS to increase in the mid-80% range over the 2021 levels. The metrics are based on the assumption of potential impact from the Sunshine Fitness acquisition and that there is no significant impact of the COVID-19 pandemic.
Zacks Rank & Stocks to Consider
Planet Fitness currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Consumer Discretionary sector are Civeo Corporation CVEO, Bluegreen Vacations Holding Corporation BVH and Funko, Inc. FNKO. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Civeo sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have surged 51.8% in the past year.
The Zacks Consensus Estimate for CVEO’s 2022 sales and earnings per share (EPS) suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has surged 33.6% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.5% and 28.7%, respectively, from the year-ago period’s reported levels.
Funko carries a Zacks Rank #2 (Buy). FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 8.8% in the past year.
The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 24.7% and 28.9%, respectively, from the year-ago period’s reported levels.
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