Wall Street has shown strong confidence in Planet Fitness, the low-cost gym chain, as it continues to demonstrate robust performance. The company has reported four consecutive months of increased foot traffic, a notable achievement given its recent decision to raise its signature Classic Card membership price from $10 to $15. This 50% increase, the first for its basic plan in 26 years, applies specifically to new members joining since the summer of 2024.
According to a tweet from The Wall Street Journal, "Wall Street is pumped up on Planet Fitness. The low-cost gym giant is coming off four consecutive months of higher foot traffic despite raising its signature membership price to $15 from $10 last summer." This trend underscores the resilience of Planet Fitness's business model.
The price adjustment, which saw the Classic Card membership increase from its long-standing $10 monthly rate, was implemented for new sign-ups following extensive testing. Interim CEO Craig Benson confirmed that the $15 price point yielded the most significant increase in average revenues per gym while minimizing the impact on new member acquisition rates. Existing members continue to pay the original $10 rate.
Recent reports from Placer.ai indicate a broad positive trend in gym foot traffic throughout 2024, with Planet Fitness outpacing its own strong 2023 performance with a 1.7% year-over-year increase in January 2024. The company remains America's most-frequented gym, attracting a substantial portion of overall gym visits.
Planet Fitness's financial results have largely been met with optimism by investors. The company reported second-quarter 2024 revenue of $301 million, a 5% increase from the previous year, and net income grew by 11.5% to $49.3 million. This positive news led to a nearly 14% surge in the company's share price. As of late 2024, Planet Fitness boasted 19.7 million members, marking a 7% increase year-over-year.