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Planet Fitness Signs Agreement to Open 35 Stores in Australia

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Planet Fitness, Inc. (PLNT - Free Report) has reached an Area Development Agreement with Bravo Fit Holdings Pty Ltd. ("Bravo") in an effort to expand its footprint. Per the agreement, the company will open a minimum of 35 Planet Fitness locations in Australia over the next few years.

The company stated that its first official Judgement Free Zones are situated in Tuggerah and Gosford in the Central Coast of New South Wales. This will be followed by a new location in Casula, which is anticipated to open in 2020.

Ray Miolla, Chief Development Officer at Planet Fitness said, "Australia represents a unique opportunity to grow in a market that combines a favorable operational environment, consumer affinity for US brands, a desirable competitive landscape and an opportunity to develop a large fleet of clubs."

Strategic Expansion to Drive Growth

In a bid to expand presence, Planet Fitness has been focusing on strategic partnerships and international expansions. In this regard, it also partnered with Kohl’s. Per the terms of the agreement, Planet Fitness can open stores adjacent to select Kohl’s stores. In 2019, Planet Fitness intends to open up to 10 stores, adjacent to select Kohl's retail locations across the country.

Planet Fitness is one of the largest and fastest growing franchisors, as well as operators of fitness centers in the United States. As of Sep 30, 2019, Planet Fitness had more than 14.1 million members and 1,899 stores in 50 states. This apart, Planet Fitness is committed to open an additional 1,000 stores under prevailing area developments agreements.

Backed by solid expansion strategies and a strong brand presence, shares of Planet Fitness have gained 27.6% so far this year compared with the industry’s 1.7% growth.

We believe the company’s expansion strategy will help it to drive the top line. In third-quarter, revenues of $166.8 million surpassed the Zacks Consensus Estimate of $162 million and increased 22.1% on a year-over-year basis. System-wide same-store sales also increased 7.9% year over year in the quarter.

Zacks Rank & Key Picks

Planet Fitness currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the leisure space include WW International, Inc (WW - Free Report) , Twin River Worldwide Holdings, Inc. (TRWH - Free Report) and Callaway Golf Company (ELY - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

WW International has an impressive long-term earnings growth rate of 15%.

Shares of Twin River Worldwide Holdings have gained 11.8% in the past month.

Callaway Golf reported better-than-expected earnings in three out of the trailing four quarters, with the average positive surprise being 33.3%.

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