Planet Fitness (NYSE:PLNT) posted a 7% revenue increase to $365 million in the second quarter, up from $341 million year-over-year, as the company aggressively pivots its marketing and pricing strategies to accelerate membership growth.
Financial Performance and Membership Metrics
System-wide same-club sales saw a 1.7% uptick, a gain CFO Sudhanshu Priyadarshi attributed entirely to rate growth. The gym chain concluded the quarter with 21.5 million members, a 3.6% increase compared to the previous year. Notably, Black Card penetration climbed to 68%, reflecting a 210 basis point improvement. While net income reached $67 million, adjusted EBITDA rose 3.5% to $153 million, despite a slight contraction in adjusted EBITDA margin to 41.8%.
Strategic Growth and Franchise Expansion
The franchise segment led the charge with a 13% revenue boost, supported by higher royalty fees and increased national advertising fund contributions—which the company plans to raise from 2% to 3% by 2026. Corporate-owned club revenue also grew by 4%. During the quarter, Planet Fitness opened 23 new locations, including five international sites, and remains on track to hit its goal of 180 to 190 new openings throughout 2026.
Capital Allocation and Share Repurchases
Planet Fitness demonstrated confidence in its valuation by repurchasing 4 million shares for $200 million during the quarter. With $250 million spent year-to-date, the company still holds $250 million in authorized buyback capacity. To fund these maneuvers, the firm utilized cash on hand and a $75 million drawdown on a variable funding note, which management intends to repay by the end of the year.
Rebranding: A Pivot Toward Approachability
CEO Colleen Keating is spearheading a mission to capture the 70% of the U.S. population currently not paying for a gym membership. The company is refining its advertising creative to move away from intense “sweat-heavy” imagery, opting instead for a more lighthearted, welcoming aesthetic. “We want to ensure our brand approachability is clear to all potential members,” Keating noted, adding that extensive consumer testing is underway to shape future campaigns.
Pricing Tests and Digital Innovation
In a move to gauge price elasticity, Planet Fitness will launch a limited-time national promotion offering the Classic Card at $10. Management emphasized this is a strategic test rather than a permanent price rollback. On the tech front, the company is deploying an AI-driven churn model to identify at-risk members and is set to roll out a redesigned app in September. This update will feature personalized home screens, enhanced activity tracking, and improved accuracy for the brand’s signature “Crowd Meter.”
Updated 2026 Outlook
Reflecting the impact of its share repurchase program, Planet Fitness raised its adjusted earnings per diluted share growth outlook to approximately 6%. While higher interest expenses—tied to the variable funding note—have slightly adjusted net income expectations, the company maintains its broader guidance, including a 7% total revenue growth target and 6% adjusted EBITDA growth for the fiscal year.
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