$PLNT Get into Planet fitness, Blowout earnings and raised guidance , whats not to love.
System-Wide Same Store Sales Increased 7.9%
41 New Planet Fitness Stores Opened
Raises Full Year Outlook
HAMPTON, N.H., Nov. 7, 2019 /PRNewswire/ -- Today, Planet Fitness, Inc. (NYSE: PLNT) reported financial results for its third quarter ended September 30, 2019.
Third Quarter Fiscal 2019 Highlights
Total revenue increased from the prior year period by 22.1% to $166.8 million.
System-wide same store sales increased 7.9%.
Net income attributable to Planet Fitness, Inc. was $25.8 million, or $0.31 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $17.5 million, or $0.20 per diluted share in the prior year period.
Net income increased 45.0% to $29.7 million, compared to net income of $20.5 million in the prior year period.
Adjusted net income(1) increased 19.5% to $33.1 million, or $0.36 per diluted share, compared to $27.7 million, or $0.28 per diluted share in the prior year period.
Adjusted EBITDA(1) increased 22.2% to $65.7 million from $53.8 million in the prior year period.
41 new Planet Fitness stores were opened during the period, bringing system-wide total stores to 1,899 as of September 30, 2019.
(1) Adjusted net income and Adjusted EBITDA are non-GAAP measures. For reconciliations of Adjusted EBITDA and Adjusted net income to U.S. GAAP ("GAAP") net income see "Non-GAAP Financial Measures" accompanying this press release.
"We delivered another quarter of very solid results," stated Chris Rondeau, Chief Executive Officer. "High-single digit system-wide same store sales, combined with accelerated new store openings and our franchisees' continued commitment to re-equip their existing clubs with new equipment, fueled a 22% increase in total revenue. The third quarter was also highlighted by our highest-attended franchisee conference to date with over 1,500 attendees from across the system coming together to share ideas on how to strengthen the Planet Fitness brand, enhance the member experience and drive new member sign ups. Based on several factors including our experienced franchisees and their ability to execute, the significant amount of projected store expansion still ahead, and our increasing marketing spend, I am confident that the business is well positioned to drive continued growth and increased profitability."
Operating Results for the Third Quarter Ended September 30, 2019
For the third quarter 2019, total revenue increased $30.2 million or 22.1% to $166.8 million from $136.7 million in the prior year period which included system-wide same store sales growth of 7.9%. By segment:
Franchise segment revenue increased $11.9 million or 21.7% to $66.7 million from $54.8 million in the prior year period, driven primarily by higher royalty revenue as a result of new stores opened since July 1, 2018, an 8.1% increase in same store sales, and a higher average royalty rate;
Corporate-owned stores segment revenue increased $5.3 million or 15.1% to $40.7 million from $35.4 million in the prior year period, $2.7 million of which is from corporate-owned stores opened or acquired since July 1, 2018, and another $1.4 million of which is from corporate-owned same store sales growth of 4.9%, and higher annual fee revenue of $1.1 million; and
Equipment segment revenue increased $12.9 million or 27.9% to $59.4 million from $46.4 million in the prior year period, driven by an increase in replacement equipment sales to existing franchisee-owned stores.
For the third quarter of 2019, net income attributable to Planet Fitness, Inc. was $25.8 million, or $0.31 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $17.5 million, or $0.20 per diluted share in the prior year period. Net income was $29.7 million in the third quarter of 2019 compared to $20.5 million in the prior year period. Adjusted net income increased 19.5% to $33.1 million, or $0.36 per diluted share, from $27.7 million, or $0.28 per diluted share in the prior year period. Adjusted net income has been adjusted to reflect a normalized federal income tax rate of 26.6% for the current year period and 26.3% for the comparable prior year period and excludes certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance (see "Non-GAAP Financial Measures").
Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance (see "Non-GAAP Financial Measures"), increased 22.2% to $65.7 million from $53.8 million in the prior year period.
Segment EBITDA represents our Total Segment EBITDA broken down by the Company's reportable segments. Total Segment EBITDA is equal to EBITDA, which is defined as net income before interest, taxes, depreciation and amortization (see "Non-GAAP Financial Measures").
Franchise segment EBITDA increased $7.3 million or 19.6% to $44.3 million driven by royalties from franchised stores opened since July 1, 2018, a higher average royalty rate and higher same store sales of 8.1%;
Corporate-owned stores segment EBITDA increased $1.5 million or 9.9% to $16.8 million driven primarily by an increase in corporate-owned same store sales of 4.9%, higher annual fee revenue and from additional clubs opened or acquired since July 1, 2018; and
Equipment segment EBITDA increased by $4.1 million or 42.3% to $13.7 million driven by an increase in replacement equipment sales to existing franchisee-owned stores.
2019 Outlook
For the year ending December 31, 2019, the Company now expects:
Total revenue to increase approximately 19% as compared to the year ended December 31, 2018, up from prior guidance of approximately 18%;
Total new store equipment sales in the high end of the range of 250 to 260;
System-wide same store sales of approximately 8.6%, up from prior guidance of approximately 8%;
Adjusted net income to increase approximately 21% as compared to the year ended December 31, 2018, up from prior guidance of approximately 20%; and
Adjusted net income per diluted share to increase approximately 28% to $1.56 as compared to the year ended December 31, 2018, up from prior guidance of approximately 26%.
