(Bloomberg) — Planet Fitness Inc. shares slumped the most on record after the budget-friendly gym operator cut its full-year revenue outlook, citing weaker-than-expected member sign-ups during the typically busy New Year period.
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Shares dropped as much as 42% to the lowest in six years in New York trading, and were temporarily halted. That’s the biggest daily loss since it began trading in 2015 and adds to a 41% slide this year before today.
The New Hampshire-based company now expects 2026 sales to grow about 7%, down from a prior outlook of roughly 9% growth. It also lowered its adjusted earnings per share growth forecast to about 4%, well below Wall Street estimates of 9.7%, according to a statement.
Unfavorable weather during the quarter had a negative impact on “a number of regions,” Chief Executive Officer Colleen Keating said on a conference call. Fewer new members in the first quarter has an outsized impact on the full year due to the seasonal nature of its subscription revenue model, the company said.
Sales were down about 5% in January from a year earlier, according to Bloomberg Second Measure data, trailing peers including Crunch Fitness International, EOS Fitness Holdings and the YMCA of the USA.
While first-quarter sales and profit beat expectations, fewer members to start the year in addition to pausing a price increase of its higher-tier Black card membership gave investors pause.
“We think the company needs to focus on strengthening its value prop in an evolving demand and competitive backdrop,” TD Cowen analyst Max Rakhlenko said in a note.
Planet Fitness has been steadily adding more weightlifting equipment across its gyms, reducing cardio machines to make room for strength training.
–With assistance from Ignacio Gonzalez and Carmen Reinicke.
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