Planet Fitness's stock falls as downbeat outlook, another exec departure weigh
By Tomi Kilgore
CFO Tom Fitzgerald said he plans to retire, just days after the former CEO resigned from the board due to 'disagreements'
Shares of Planet Fitness Inc. got crunched Thursday, after the fitness-center operator beat fourth-quarter earnings expectations but provided a downbeat growth outlook for this year.
The company also said Chief Financial Officer Tom Fitzgerald plans to retire in August after about four years with the company.
That means the company is now looking for two top executives, as Craig Benson remains interim chief executive until a permanent CEO is found. And it was disclosed earlier this week that the former CEO, Christopher Rondeau, resigned from the board of directors because of "disagreements with the company" over decisions made since he stepped down as CEO.
"[W]e believe this leadership adjustment has added another layer of uncertainty to a biz that is currently navigating other headwinds," wrote Jefferies analyst Randal Konik in a recent note to clients.
The stock (PLNT) sank 2.8% in morning trading, to put it on track for the lowest close since Nov. 15.
The company said before the open that net income for the quarter to Dec. 31 increased to $35.3 million, or 41 cents a share, from $33.7 million, or 40 cents a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of 60 cents topped the FactSet consensus of 58 cents.
Total revenue grew 1.4% to $285.1 million, above the FactSet consensus of $282.7 million, as same-store sales were 7.7% better than a year ago, to match Wall Street forecasts.
Franchise revenue rose 13.9% to $98.2 million, due primarily to higher royalty revenue, and corporate-owned stores revenue was up 15.9% to $116.4 million.
Meanwhile, equipment revenue dropped 25.5% to $70.4 million, due to lower equipment sales to existing franchisee-owned stores.
For 2024, the company expects adjusted EPS to increase in the 10% to 11% range, while the current FactSet EPS consensus of $2.51 implies 12.1% growth.
The company said full-year revenue is expected to be 6% to 7% above that of 2023, while the FactSet revenue consensus of $1.155 billion implies 7.8% growth.
Given the company's new growth model, which focuses on reducing the capital requirements for opening and maintaining a franchise location, Chief Executive Craig Benson said he believes 2024 will be a "transition year" for franchisees.
The stock has tumbled 12.3% year to date, while the S&P 500 has gained 6.1%.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
02-22-24 1007ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
After Earnings, Is Alphabet Stock a Buy, a Sell, or Fairly Valued?
-
When Will the Fed Start Cutting Interest Rates?
-
What’s the Difference Between the CPI and PCE Indexes?
-
Powell Unfazed By Sticky Inflation, but Rate Cuts Are Far Off
-
After Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?
-
Best- and Worst-Performing Stocks of April 2024
-
Magnificent 7 Stocks Earnings Updates: AI Remains the Focus
-
Small-Cap and Value Stocks Are Undervalued
-
4 Utility Stocks to Play the AI Data Center Boom
-
Albemarle Earnings: We Expect Improved Results In the Rest of Year Following Cyclically Low Profits
-
Novo Nordisk Earnings: Raised Fair Value Estimate Still a Contrast to Market Overenthusiasm
-
After Earnings, Is Verizon Stock a Buy, a Sell, or Fairly Valued?
-
Look Inside Berkshire Hathaway’s Portfolio Before Its Annual Meeting
-
How to Invest Like Warren Buffett
-
Cognizant Earnings: Improved Profitability Buttresses Results as Customer Spending Remains Muted
-
10 Top-Performing Dividend Stocks of the Month