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Planet Fitness (PLNT) Q2 Earnings Miss Estimates, Stock Down
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Planet Fitness, Inc. (PLNT - Free Report) reported second-quarter 2021 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.
Following the results, the company’s shares fell 3.2% during after-hours trading session on Aug 9. Notably, negative investor sentiments were witnessed as the management stated that there is a disruption in the fitness industry with approximately 22 percent of the U.S. gyms permanently closed (through the second quarter) due to the negative impact of the pandemic.
However, the company is optimistic about growth on the back of changing market dynamics and tailwinds behind the health and wellness. Chris Rondeau, CEO, Planet Fitness, stated, “We believe Planet Fitness is the place that fills that gap with our affordable, non-intimidating workout environment, and, as a result, we are confident in achieving and possibly exceeding our long-term target of 4,000 locations in the U.S."
Earnings & Revenues Discussion
During the second quarter, the company reported adjusted earnings per share (EPS) of 21 cents, which missed the Zacks Consensus Estimate of 22 cents by 4.6%. In the prior-year quarter, the company reported adjusted loss of 32 cents per share.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Total adjusted EBITDA at the end of the second quarter came in at $55.6 million against ($9.3) million reported in the year-ago quarter.
Quarterly revenues of $137.3 million beat the consensus mark of $123 million by 11.7%. The top line also surged 241.1% from the year-ago quarter’s levels on account of solid performances in the Franchise, Corporate-owned Stores and Equipment segments.
Segmental Performance
During second-quarter 2021, Franchise segment revenues came in at $72.8 million compared with $21 million in the prior year quarter. The upside was primarily driven by a rise in franchise royalty revenues ($37.7 million), NAF revenues ($8.3 million), franchise and other fees ($5 million). EBITDA in the Franchise segment came in at $51.8 million compared with $3.5 million in the prior-year quarter.
The Corporate-owned Stores segment’s revenues during the second quarter came in at $40.6 million compared with $9.4 million in the prior-year quarter. The upside was primarily driven by the resumption of operations at its temporarily-closed stores along with the revenues accumulated from the opening of seven new corporate-owned stores (since Apr 1, 2020). Meanwhile, the segment EBITDA came in $10.4 million against ($6.3) million reported in the prior-year quarter.
In the Equipment segment, revenues during the quarter came in at $23.8 million compared with $9.8 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 came in at $5.6 million compared with $1.3 million in the prior-year quarter.
Other Financial Details
As of Jun 30, 2021, cash and cash equivalents totaled $469.1 million compared with $445.6 million as of Mar 31, 2021. Long-term debt (net of current maturities) amounted to $1,670.8 million at the end of second-quarter 2021 compared with $1,673.6 million at prior-quarter end.
2021 Outlook
For 2021, the company expects revenues in the range of $530-$540 million. Selling, General & Administrative expenses are anticipated in the lower $90-million range. Adjusted EBITDA for 2021 is estimated between $200 million and $210 million. Adjusted net income per share, diluted, for 2021 is anticipated between 65 cents and 70 cents. The metrics are based on the assumption that there is no significant worsening of the COVID-19 pandemic that seriously impacts performance, including prolonged store closures or other mandated operational restrictions.
Meanwhile, the company anticipates new store openings in 2021 to be at the high-end of 75-100 range.
Some better-ranked stocks in the same space include RCI Hospitality Holdings, Inc. (RICK - Free Report) , WW International, Inc. (WW - Free Report) , Camping World Holdings, Inc. (CWH - Free Report) . RCI Hospitality sports a Zacks Rank #1, while WW International and Camping World carry a Zacks Rank #2 (Buy).
RCI Hospitality has a trailing four-quarter earnings surprise of 196.3%, on average.
WW International has a three-five-year EPS growth rate of 15%.
Camping World’s 2021 earnings are expected to surge 58.7%.
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Planet Fitness (PLNT) Q2 Earnings Miss Estimates, Stock Down
Planet Fitness, Inc. (PLNT - Free Report) reported second-quarter 2021 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same.
Following the results, the company’s shares fell 3.2% during after-hours trading session on Aug 9. Notably, negative investor sentiments were witnessed as the management stated that there is a disruption in the fitness industry with approximately 22 percent of the U.S. gyms permanently closed (through the second quarter) due to the negative impact of the pandemic.
However, the company is optimistic about growth on the back of changing market dynamics and tailwinds behind the health and wellness. Chris Rondeau, CEO, Planet Fitness, stated, “We believe Planet Fitness is the place that fills that gap with our affordable, non-intimidating workout environment, and, as a result, we are confident in achieving and possibly exceeding our long-term target of 4,000 locations in the U.S."
Earnings & Revenues Discussion
During the second quarter, the company reported adjusted earnings per share (EPS) of 21 cents, which missed the Zacks Consensus Estimate of 22 cents by 4.6%. In the prior-year quarter, the company reported adjusted loss of 32 cents per share.
Planet Fitness, Inc. Price, Consensus and EPS Surprise
Planet Fitness, Inc. price-consensus-eps-surprise-chart | Planet Fitness, Inc. Quote
Total adjusted EBITDA at the end of the second quarter came in at $55.6 million against ($9.3) million reported in the year-ago quarter.
Quarterly revenues of $137.3 million beat the consensus mark of $123 million by 11.7%. The top line also surged 241.1% from the year-ago quarter’s levels on account of solid performances in the Franchise, Corporate-owned Stores and Equipment segments.
Segmental Performance
During second-quarter 2021, Franchise segment revenues came in at $72.8 million compared with $21 million in the prior year quarter. The upside was primarily driven by a rise in franchise royalty revenues ($37.7 million), NAF revenues ($8.3 million), franchise and other fees ($5 million). EBITDA in the Franchise segment came in at $51.8 million compared with $3.5 million in the prior-year quarter.
The Corporate-owned Stores segment’s revenues during the second quarter came in at $40.6 million compared with $9.4 million in the prior-year quarter. The upside was primarily driven by the resumption of operations at its temporarily-closed stores along with the revenues accumulated from the opening of seven new corporate-owned stores (since Apr 1, 2020). Meanwhile, the segment EBITDA came in $10.4 million against ($6.3) million reported in the prior-year quarter.
In the Equipment segment, revenues during the quarter came in at $23.8 million compared with $9.8 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 came in at $5.6 million compared with $1.3 million in the prior-year quarter.
Other Financial Details
As of Jun 30, 2021, cash and cash equivalents totaled $469.1 million compared with $445.6 million as of Mar 31, 2021. Long-term debt (net of current maturities) amounted to $1,670.8 million at the end of second-quarter 2021 compared with $1,673.6 million at prior-quarter end.
2021 Outlook
For 2021, the company expects revenues in the range of $530-$540 million. Selling, General & Administrative expenses are anticipated in the lower $90-million range. Adjusted EBITDA for 2021 is estimated between $200 million and $210 million. Adjusted net income per share, diluted, for 2021 is anticipated between 65 cents and 70 cents. The metrics are based on the assumption that there is no significant worsening of the COVID-19 pandemic that seriously impacts performance, including prolonged store closures or other mandated operational restrictions.
Meanwhile, the company anticipates new store openings in 2021 to be at the high-end of 75-100 range.
Zacks Rank & Stocks to Consider
Planet Fitness currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space include RCI Hospitality Holdings, Inc. (RICK - Free Report) , WW International, Inc. (WW - Free Report) , Camping World Holdings, Inc. (CWH - Free Report) . RCI Hospitality sports a Zacks Rank #1, while WW International and Camping World carry a Zacks Rank #2 (Buy).
RCI Hospitality has a trailing four-quarter earnings surprise of 196.3%, on average.
WW International has a three-five-year EPS growth rate of 15%.
Camping World’s 2021 earnings are expected to surge 58.7%.