PLNT - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Karen, and I will be your conference separator today. At this time, I would like to welcome everyone to the Q4 Planet earnings call. [Operator Instructions]

I will now turn the call over to Stacy Caravella, Vice President of Investor Relations. ahead. go Please

Stacey Caravella

and operator, everyone. Thank good you, morning,

Q&A on Officer, Colleen call They is be during being be Today's and prepared Officer, will Executive Chief will the questions for for Fitness' webcast Planet available following Keating; call Stasz. the remarks. Speaking Jay today's session recorded and replay. live Financial Chief

release our forward-looking I'd everyone that remind made I the statements in call. Before included to turn to call like over also our the during earnings language comments to on applies Colleen, the

release our Our financial investor along with measures. call can on with GAAP mentioned non-GAAP of website be found corresponding their on any measures the reconciliation

Colleen. Now, I'll the turn over to call

Colleen Keating

Call. and for the Thank us you, everyone, you, thank Stacy, QX joining Earnings for Planet Fitness

We as transition to belt and Brian Povinelli I building, leadership having recently, over Chief and We Officer; of I now quarters in and so. to the Development year or Chip Chief have and Olson Jay Marketing organization, our my previously transition foundation more month mid-QX of in it mid-June. our the as referred Officer as year X and started role team. see XXXX the starting as CFO with a welcomed for have past Stasz under

growth We furthering unbeatable an value all same our deliver the of came mind, shareholder fitness to same increased levels at and accelerating Planet goals welcoming time, members in to Fitness value. with the all atmosphere for at

growth EBITDA by X.X%, the We same sales grew quarter, XX.X% we are XXXX revenue during system-wide made in and in incredibly of fourth and particular, by during we proud the adjusted progress club XX.X%. increased delivered which

of for the clubs the quarter XXX bringing clubs. global X,XXX to more new system-wide Planet our Fitness a We count added club for XX than year, during total

model membership costs, of and out certain progress our for members in grew economic million We an time club XXXX by We rolled significant capital on that in to operating included Fitness the a made approximately extensions level build investment Planet million returns. in of enhanced XX.X X fees. club members. opening elimination also and improving XXXX We reductions lines

an agreement. all our new of with franchise growth our enthusiastic received model We franchisees, response nearly signing

the a to price also the membership believe growth. card card IRR franchise in the price classic changes testing, end our membership We extensive levels. the We than which that at we to closer XX% from cost, market $XX classic Between to the new step rate top raised we to build increase, support club's a classic significant hadn't pre-pandemic represents of line the of more took XX and $XX After the moving years, roster. unlevered June. monthly of raised agreement nearly card is

remain these and We're committed the see we're our that economics green on encouraged by fuel from to starting changes franchisee to growth. to focus shoots

Turning in meaningful accelerating our continue X to to member our experience, enhancing our optimizing we XXXX, have strategic new making place format Redefining openings. progress a brand, imperatives. strong and club and refining our product foundation on

about time, Fitness that beginning a our seasoned our is someone Planet to that all marketing excited meet athlete brand to we to planet welcoming promise These needs. our brand equipment in launched fitness journey that and are communicate creative stronger -- complement campaign and all new clubs At Let together community new XXXX. our our are where redefining our We're this the strength more is on consumers' members and supportive with to in start we brand. support strong late promise of shift balanced or evolving all same the belong. me our grow their with a a whether

and supporting our Year's the my New the kick stage a it's tenth off way of time marked great global quarter. which right on Planet a was year at Times amazing, Fitness Square, attended our money put to to energy in Eve first celebration. I The

we Brian As earlier, our team I our of Officer, Povinelli. Marketing mentioned leadership addition expanded Chief new with the

Brian initiatives and all. and track leadership overseeing in with our marketing strengthen apparel access wellness industries, and hospitality career much extensive to to to has fitness position franchisees. spent of breakthrough insights drive for He partnering our data leveraging the and is responsible for of record his experience a expand results and has

the to has Brian a he's date. few work only While on done weeks, already been here building we've

experience Now go think hand to in optimization, really and I member which glove. format

our member research using equipment shift Our to and and consumer and clubs, workouts enhance to mix our from extensive our will desired way. give format the resulted achieve observing experience more members their which their equipment strength members

more quarter, opted and strength floor XX% clings, into called last and X marketing of additional adding new franchisees signage equipment our our the discussed we is been in As than QX The equipment. of clubs out our creative. featured throughout pieces with has

the domestic by of our the will the have all end additional that expect We clubs pieces year.

goes members training. do optimization plan functional clubs It getting Format right to within more mix. for opening equipment and beyond spaces the the includes floor up

We new sentiment enhancement postings member to to We and the is formula seeing this ultimately feedback unit a great online. which accelerate increase club social believe membership, to are winning growth. response best the from our to is changes a economics

on we team dedicated unit can years. economics footprint. growth XXX few early imperatives in needed mind, our reduce achieve investments a in recognized someone we level. about year strategic my club the work that per improve I Fitness to growing at believe global Planet on club get great leadership new to and XXXX that to in back we've in senior seeing the feel capital We're at our time clubs our to our With opening done ambition, that and We

accelerated network. both as franchisees joined eye also build He internationally Olson is footprint, club Chief franchisee our Officer a Chip our with cost support member with corporate clubs our growth. and optimize for Development us thoughtful experience. Chip to franchise well our toward as to will the as strengthening charged and in spearhead domestically growing for January efforts

of members. functional overarching shifting our our Jay recently organization aiming will strategy a our I'd which leadership for growth. in and structure execute While is our that consistent openings team club a to sustainable and to to we're strategic a the realignment new in support our growth strengthens across to To in achieve beyond, accountability divisional note model, announced fit our we're team leaders to expansion. the teams operating integrates goal capabilities best and our imperatives. for of position XXXX healthy, finally, from And to reliable outlook means we long-term cover year-over-year establish increases XXXX detail, This pattern in like

excited chapter enable powerful responding structure our realigned into more next Evolving to will be needs members brand our and what our of agile organizational to and team integrated we franchisees. and drive its us do forward I'm faster and the can this of to to strengthened about in growth. continue our

turn guidance. Now, to for over performance share Jay? our year-end our and Jay I will it on XXXX to XXXX more details metric

Jay Stasz

When I long-term a is great great Fitness joined, Colleen. tremendous leader Planet an opportunity. knew that I brand industry Thanks, a a and with company with

here growth. more X strategy Now I'm enter and phase even on execute of our in, excited next as to be we the months

Planet has model. Additionally, Fitness compelling a business

can of XXXX of portion us in of which refinanced Our of one we've flexibility support. nearly a accelerated this decade ago. capital, value debt a amount significant in more an and our asset-light a the of we since share terms level is ways shareholder structure To doesn't our the the debt allowing completed require end, business repurchase, that IPO that delivered

look that a a time so enter to sheet to start as have balance example that forward international financial to our in owners concept easier XXXX our This that to the balance country. ended fuel to an accessing market will of and growth. year used our a and clubs growth also in Spain X in using Spain works new to capital plans. sheet We to in an other opportunities last new strength is market, future great demonstrate We're local use with drive franchisees our off step and

of to own highly fleet. approximately XX% reiterate We continue in model and franchised asset-light, to our our believe the plans

implement performance to was trends. We I outlook, it increase Before and going price our member growth by net XXXX absorb and time card start get our ahead our of discussing leave to the XXXX impact that market increase our felt for been price the the to of member of highest to XXXX I'm historically the quarter. before results QX of important to what class has

cancel Our drove rate we growth. ended favorability same with and in the slightly lower-than-expected our growth fourth during an quarter better was with QX, net membership increase sales club net expected. a along membership we X% than growth year This

in versus 'XX that visited than over recognizing with month We Card considering the also We're as 'XX which the see card. to and just approximately We the per for membership $XX believe of new engaged year, is our penetration. members nearly value Xx that they planet a versus X.Xx only are increase classic year XX% are membership club sign a more great also ended in year-over-year last Black continue great offers retention. it's seeing Black members Card the more

of now since to population XXXX, Gen added bringing the over of lead share end the XX% the This to XX that been age our fastest-growing our generation of member. the demographic Zs continuing XX of our group average approximately Fitness. are nearly At over continue down age members of of joins benefit Planet of of age domestically. to XXXX, drive membership our U.S. the of the and the has have X%

results. to Now our fourth quarter

QX increased clubs of We corporate X.X% compared comments regarding same club sales XX All be opened system-wide quarter. X.X%. will X.X%, otherwise fourth to QX unless the performance club quarter of our growth sales We XXXX noted. and to club XX. increased same same Franchisees in new comparing sales delivered my XXXX,

quarter, driven Approximately XX% the comp approximately increase from XXX membership points was being Card increase of net the basis Black was growth XX% our end the penetration by of QX at rate growth. an prior year. balance the of with approximately

The increase in revenue and segments. to primarily growth royalty due driven quarter, For was national revenue ad increase revenue was revenue, placement by new club in revenue. segment XX% franchise X fourth million. an across all million $XXX.X revenue was the compared increase to total $XXX.X fund The

as revenue to increased existing delivered higher and primarily X.X%, revenue additional X.X% increase in clubs we club as Equipment the revenue revenue For as royalty average growth base. of from driven X.X%. sales The XX.X%. in equipment that in from strength of new was The sales sales the from by well equipment as including driven increase pieces the rate in same fourth clubs, revenue primarily was by was segment clubs segment well higher club the up franchisee-owned from the corporate-owned quarter, replacement equipment. QX

new compared this XX club completed placements quarter We year. last XX to

XX.X%. to replacement accounted For equipment total of quarter, equipment compared XX.X% the for revenue

primarily equipment to increased which million revenue, of to from relates compared cost $XX.X of million $XX.X $XX.X relate to due million. due to Club to the to higher clubs million franchisee-owned club to club which was Our $XX.X and our expenses, costs, payroll primarily occupancy new openings. cost sales segment operations increased corporate-owned

$XX.X compared was $XX.X income million adjustment incremental per expenses. adjusted for net quarter million, income $XX.X SG&A to share compared quarter transition-related and expense. $XX.X which and was adjustment was million. to net driven CEO increase million income fund compared million million which Adjusted was Net also $X.XX Adjusted a CEO CEO by for in per included $XX.X was payroll transition-related for the the The million. $XX.X share. to diluted $X.X was expense marketing spend National $XX.X higher SG&A million, million, was advertising million. $X.X includes expenses $XX.X a

through Adjusted segment, compared margin adjusted along the XX.X% adjusted of $XXX.X with EBITDA quarter increase lowest million $XXX.X period, our margin was our is was compared investment, decreased marketing primarily EBITDA equipment with to that adjusted reequipped flowed which sales EBITDA EBITDA million, of the year and segment. prior XX.X%. in margin margin Fourth to because our

in For to to year, the the increased year compared full EBITDA prior XX.X% adjusted margin XX.X% period.

adjusted Equipment million, million Club EBITDA was adjusted segment, EBITDA was adjusted was million, was and was XX.X%. and adjusted margin Corporate EBITDA adjusted $XX.X XX.X%. franchise $XX.X EBITDA EBITDA margin By margin $XX.X adjusted EBITDA was XX.X%. and

to balance Now the turning sheet.

on As December XXXX, cash, XX, $XXX.X in $XX.X total had of included restricted equivalents XXXX, million million period. and each marketable securities $XXX.X which million respectively, $XX.X cash, compared million December of we XX, cash of to and

press on Moving our our in release provided we 'XX morning. this to which outlook,

it locations. there. both will noted, Colleen corporate openings XXX we XXX which get that few we believe This years before but includes year and new to club XXX per expect year, a open As achievable, between is franchise new we take clubs, and

franchise new clubs. equipment We and again, between placements weighted And like expect we will the 'XX. XXX that cadence XXX quarterly in expect be

purchase of is driven that total by the make in year up year. will do that will additional This not the XX% the reequipped pieces approximately full segment equipment expectation We last for equipment strength so clubs the sales revenue expect largely did of 'XX.

spread sales when expect We of evenly QX. the year strength the throughout franchisees pieces the replacement the purchased 'XX more the to compared in be to incremental equipment

a segment more the sales strength. placements approximately with profit our XX%. expect equipment As shift we XX% and maintaining for reequip to reminder, to are Therefore, will that margin rate be new mix we dollars

growth to We System-wide grow X% year same growth grow fiscal over and expect adjusted XX%. results. X%, XX%, the club revenue to to approximately represent be 'XX following targets that and EBITDA approximately sales between

based grow range average of approximately in XX% with of range net approximately communicated. line to in and million 'XX, inclusive shares X $XX.X net adjusted to in repurchase million, diluted outstanding per Adjusted share to income the X% X% to what XX% diluted adjusted expect on to weighted previously we in we've shares income increase the

We 'XX refinancing. also inclusive interest approximately of million, $XX net of expect of the impact expense annualized our 'XX

CapEx D&A expect approximately we XX%. to flat to to XX% be and Lastly, be and up

depreciation assets amortized fully will of be year-over-year, will amortization the down XXXX, intangible at 'XX. certain increase end TSG to by expense purchase our While a in related

have address our year CMO expect In same a EBITDA me adjusted grow Let XXXX, rate CEO and this hires, why Blue team, revenue Ribbon full related we expenses including our we compensation and CDO at have expense. of to the to recent approximately we year.

ability want to have the also appropriately we strategic We imperatives. invest that in to ensure our

we sustainable investments, these value. up increased With setting long-term believe shareholder that ourselves drive we're and to growth deliver

call I'll now up to the it operator back to for the turn open Q&A.

Operator

first from [Operator Siegel Your Simeon BMO comes Capital from Instructions] question Markets.

Simeon Siegel

seeing you And year how of about -- to Jay, I maybe, you is and any seeing embedded think, -- full help in think have price it's grandfather price what you're member to -- guidance hike over $XX you year? versus then there us the way seeing mentioned curious the revenue Colleen not into people progression or is comp Any much your expected any the post are any terms just . around wanting I'm the lose thoughts and churn, What the if improving. hike? that? just

Jay Stasz

June, others in. far in card may and But price start, did Jay, and hike, in we Yes. the will that Simeon, 'XX. and we this Colleen -- I'll is class or increase, we as chime as anniversary really the that June of

price amount guidance. rate we're the because step And up this then a So is June, in we membership, low the we've tailwind down on about our about little as that right, comp a bit basis we we'll point. that mid-single-digit fair months. at think get what have annual is that way $XX signed a We through embedded guide expected XX but get we we first to talked don't the from standpoint, that getting of are past once we'll that lift and people then an that

really QX. of clubs, was card all new of hadn't price the new and coming point have your in line but classic that continued really the talked hanging are a because those QX Those impact a QX those and into class seen spring with to those about little is in we really $XX To good incident, people does rates to and price and year-over-year, rates, point, this right? came sign something your that are people What post which good the bit we at the we've on cancel about card call attrition what churn. stickiness question trends clubs the about talked see to members continue we at is old anniversary. And

pleased So with we're very that.

Simeon Siegel

wasn't know think then . And equipment vis-a-vis full recognizing just there keep relative mind anything any I for sure you gave XQ XQ the about Great. impressive think gave want I in meet we timing. should the and we you year should sales just make color cadence. we to equipment.

Colleen Keating

there the QX, loaded No. did We some we had in Yes. as nice and plate well. reequips

cadence year, quarter about a equipment of consistent will placements And we next When -- total the said obviously, we've So reequips, XX% the I be about consistent QX revenue. for because this then and that think consistent for But the than spread pretty we've year consistent quarters. for QX. strong outlined mean to I year-over-year. the year And of more the of ratably would is over spike. be pretty course going the remaining then it

Operator

Randy comes Konik The Jefferies. from from next question

Randal Konik

used you that word the like I foundation. Colleen,

-- foundation about and I you're side, term units. unit Spain You the X the is the I set for how international guess understand want think, about long thinking you've on I just ended it, future. what growth thinking and to

said about You strength areas. the Mexico good talked in past, other in and

quickly starting are mandated the side, on of, franchisee base? of a you of we fairly to kind international know, And back COVID, I'm let's or did it their but now during programs. the just good sure the are build more some on made not, of it's changes could with Just XXX franchisees it potentially You we an that's build make day, they we're used How to cycle the builds guidance in give get should I to kind of even for in and like then years to kind reaccelerate? the franchising kind XXXX, obviously. good ahead franchisees us that you IRRs that past, they Where make to more maybe hungry attractive the Europe. when the punch to In as get but us builds list vision those openings ago, gave franchisees. and development franchisee more States in just the ahead. of to feels X, them don't United we say, the units obviously improve gave to XX beginning, -- accelerated unit us for from see really markets back pertains in XXXX,

color get markets franchisees So to the when beyond. the wanted we I on can in international your just and Europe and see more then progress

Unknown Executive

the thanks Sure. Randy, question. for

what kind U.S. international, with first, accelerated is [indiscernible] of I So growth I'll and then start And heard. international.

pleased we're ramping our way Spain the with are there. the performance So in clubs and very

and X pleased international approach a by the achieve Spain market clubs We we're is that flat of quite real have going a year. are in to and and not last real the expansion thoughtful take plant. into to year also open density What we where we've scale said go can end to

in pleased to Spain openings. again, So with into pipeline We've the progress there going continue We'll Spain. a have got XXXX. strong

at ability the in the a And on ground. ground strong same hand have which way healthy as there sheet, know, on a time, to we to building and team good very balance getting you Spain really off have really us gave the built a in the

as the and get transition markets we market for to At will then still time, one said our look a market we same year, to we've two a we'll that's model recycle to that new capital opportunities And the anticipation. franchise look and Spain and other international established expansion. at

domestic some table -- to plan how lever reducing of franchisees. pricing. new than change was line and with as economics. and almost the and growth growth growth pushing And XX on made some costs lines card the with off fees of impact relates domestically touched XX% the unit of the had for noted, as that costs and classic the as new will it kind top capital time capital well then As Jay that in more that the out years. good the -- IRRs with the addressing we re-equipped build with I the progress, ongoing and for our We've plan really

our to continuing enhance time, same to the committed the continue for economics we to the to At try franchisees unit toward pre-COVID IRRs. drive and remain

good -- it's So progress. -- we've made

franchisees a new a an give Investor never an while this get stop business XXXX we'll for the longer-range continue been with Development him want some and today, He's give our And targets Chip Wilson, ways have really to his the looking to However, franchisees. he's only longer-range we're arms few we'll benefits year. at to weeks. at benefits said model in board guidance. some guiding that to enhance Day Officer. talking want for give our our Chief we we'll We the out have and members with to way opportunity around We on and later

years. back every X with like the that growth will year, we take think we, to get to new just endeavor couple a But you, it few starting club of

say not but in we middle. not this so So years, the somewhere X year,

Operator

The comes from from Zackfia Sharon next Blair. William question

Sharon Zackfia

that wanted between seeing quarter. -- kind the I increase And Black but kind what of we double in compression and continue more Card and the just . Are missed And the apologize if did comment you're into this with on you test membership then I expect basic of this, I mix the lines? up? the to Black click is of Card I with to you Black on guess Card and the trade pricing XXXX? the price something those should along thinking

Jay Stasz

Yes.

I and is can Jay, start on this this. So

the Card flight. is we terms that In not did of test, Black in comment

We're roughly of -- expect we on. lift. year, of believe, and penetration, point, that. continue seeing test which at yes, the least don't on We we And it's at Black your end at through a third are quarter, that the Card speak in lift to the test for I to X-point the a to were typically XX% about at the a lift nice going we a while end X-point QX is

is and nice So joining there's that a And right, a card price we're Card because spread, only We think members trend. such are acceleration price. you're seeing $XX and Card, Black the Black some between there. there's nice into which right, more value classic

Sharon Zackfia

too, . How been to feel do guess of of up, marketing significantly has your beginning pretty the I'll response what more, changed the consumers the and year. message? just from at following kind marketing you inclusive I messaging you And this call,

Unknown Executive

in that about of a we'll QX even at is, flight, we of couple and earnings you the know, is just sentiment, launched So end as But seeing our say marketing in very response that few a we're months. very the we favorable talk tail social And of we a special strength believe our makes complement know of the balanced of -- social shift community, conveying sense around one marketing of so together. lot stronger we sentiment brand a the to the and and highly equipment in differentiated that we're lot unique what a a brand more really call and online postings, in about more will and things December. growing marketing on is the messaging of

Operator

comes James. Your from Joe from next question Altobello Raymond

Joseph Altobello

and I openings guess want XXX use clubs for I XXXX. to openings, circle as back implies on year, for I XXX call placement new a guidance this new proxy If the that's new franchisee year-over-year, it franchisee it, modestly your . up to bit Is open the new to respond from down taking them longer to actually enough to franchisees a to clubs? new incentive growth 'XX. offering model is little Or flat it's it?

Jay Stasz

Jay, is that. start I'll with this Well, and

has mentioned team work Colleen on mean, -- done the the that done growth I a think, we've I new model.

I are always But the and that always as relationship Colleen far price for franchisees appreciative. levers engaged planning and it's turns increase. we something is not as well a development. and dime the think -- a to more. the as think we've the said, will we pulled understand model new growth strive they and good with they on with want they're there, think Like as I that I got -- And -- board. on

an will as and So evolution. that continue

delta we balance we right? part I in corporate that and continue of not mean it's that think also I I build a Spain, question, to year, the doing which we're placement. mix, your standpoint that which in from number a clubs, continues considering sheet corporate our includes on to but to think out this build

corporate the of part build. it's So

So that's of the delta those X numbers. part between

Joseph Altobello

And obligations franchisees give build them it. terms not percentage might a and back what in to that. number have us track get you follow-up . track. you a are that on of just on recourse on Got there with currently of the Is can their

Jay Stasz

consistent. on are vast majority The been It's Yes. track.

well. changed. just with mean not now So that has continue with them to with and those Chip. work We he's franchisees as relationships building I

Colleen Keating

tailwinds Yes. vacancy. key available the see is build Space on factor X% or partnering real franchisees a X% estate our with I'll in help find just fairly And remains It and find tight growth. to chime reported that to space. cost a the with some still economics in you. the there CoStar also vacancies certainly with team them We increasin. It's retail are about about just unit

So we're partnering franchisees team to our find which their estate partnering . is real great sites them to with clubs. our new for help develop

Operator

question from Next Rahul JP from Morgan. comes Krotthapalli

Rahul Krotthapalli

and a with local or -- revisiting a related to I Or to Where Great social tires the discuss perform how is the media? effectiveness and kicking suite did Brian of year have early? on the hit how this national the up and had you fully the chance I ramped like campaigns. C this see campaign Colleen, too spend opportunity is wanted follow-up. mainstream Have Or new going refresh here. demographics? ask your it has forward yes, to based And on across versus even on brand it you like targeted expectations? learnings do to think

Colleen Keating

for you Sure. how performing. is about would talk to campaign to that question. the love Thanks I

midpoint QX just a QX. it's However, of about campaign, we're and the

today even So -- as have out as we'll engaged and more he far about before well strategy QX rolled we when rolling bit sleeves it's call his months. he's talk as our and a it's engaged as Brian work. campaign much few started up very how the Brian's And he's got in engagement. performing brand as our was in and earnings a

of rolled on and look the at the up, more he's forward board been his weeks talking for, we end So and I think, about now, to about that quarter. X . sleeves

Rahul Krotthapalli

X/X churn like the to play on remainder that do not thinking how to levels, the developments? on optimal And or based cancel recent And Given on of year? guys is still about think the as roll through comes the what of Great. click approach base the the out best it? are club you into the rather like you is

Colleen Keating

well. as short-term Where now talked I'll well about right our bit municipally after had XX a maybe so of very XX, a we cancel fairly as XXX% little -- that. in where start, place, in maybe we've in XX churn even required. rate a so of and as weeks not this an think, impact, I states to churn see click clubs it's we've little bit before about elevated What corporate then moderation a is of X a to

we to and with value age proposition Zs of on fitness, fitness-minded really think is touched of I thing and fastest as our and think we're about, fact well-being in golden wellness -- fitness members proportion Jay and -- we important membership, our Gen So the our the about that very that growing the offering as generation. talked are the

see one with a So state is with we churn believe term stay. it want other compelling for to with And short-term very rollout, exception normal of in to cancel Tennessee going the back to and rate. then one members join we to moderation almost [indiscernible] a overplay and in what's to be value again, geographies, a the with all I exception, increase to proposition don't and

that, too. that I also about maybe rate, I'll think rejoin we've touch our fact on talked the

the pretty Our We of rate is last high. in quarters. XX%, the XX% rejoin has couple -- were high been XXs,

a member well. a also very speaks to top event rejoin the have even of that Planet Fitness, we remain that and So as in high rate mind still leave

Operator

John from Guggenheim Next from Partners. question comes Heinbockel

John Heinbockel

doing marketing you priorities for least you beyond think the quarter? you Because differently? how X reinvestment I want wonder Z, that going on if think high you about, strategic to that at think about X maybe school be but to I wonder, for with can do Gen this I or X to and imperatives. also the of XQ you'd driven, year, you, high stronger think like about been always do different are things Do particularly QX right, list? do cadence, you if in about pass they've What And Colleen, it's when be something just talked historically. you ask than in joins first

Sharon Zackfia

Yes.

talk and about I'll priorities. imperatives strategic on -- we'll the So the the touch

I think of gosh, there's X them.

we on when said, not all -- how support some are and is they're Marketing Chief and think imperatives, and making That's member of we that. kind resources say a -- the and the refine a we've branding you continue top to very about that copout, strategic right? to bringing focused is on added Officer is there So experience That very that line, a -- also I'd key much important. sure have branded this marketing

leaning our marketing certainly inform is line our So into that top high brand a and positioning priority. very having with

into and growth, on in And Development like build focused touched that. we're then growth with the establishment that and with go all Chief things the economics of Officer, reducing helping all unit cost, selection, the a unit on site that unit we've bringing of highly

And I'd marketing, wish bit joined this a it call have we'd had mid-June. of in I to And big the as on place tomorrow. aboard think It a sprint time So the said in it. inform our marketing times, had as was I and I priorities. a couple strategy I've to little wish relates bit more I'd help like mid-June, was CMO to work. those when opportunity felt came X and And I out it then brand a the first of in quarter

put joined So have year, brand the Brian the marketing to an the on strategy the is forward. imprint thing opportunity beautiful will he going and that early very and his in

John Heinbockel

the card. smaller follow-up, white which Card and current And smaller particularly that right? development right, think of of number, -- offers I maybe than Black thoughts a number as in Perks, a been perks, And your has as right, on much

Sharon Zackfia

and about had little members number by million before, $XX year-end members in for program. our a over just XXXX, our that by Perks talked I we I'll through Perks our redemptions So the bit share

to So relationship our enhance we the and inside even members members, increase with value not continue with see when they're for club the our a to engagement app. our continue way add as our also that and to

we're utilization. most on know, with you fitness the App As more than . Store the app XX% downloaded

And app, like members. increase the we our can programs more in embed engagement the with we perks the

the consumer a business, Marriott, he's in program, loyalty remains coming experience focus. that and So Bonvoy a marketing got from partnerships. Brian, And building deep

Jay Stasz

Jay. Yes. this is And John,

on talk other the experience impact on and right, besides good having It's joints. -- attrition about Just in and in is sure a the focused net attrition, quarters potentially comment, joins we like also of beat we're and give to well. Colleen go we as that. those to growth membership great a But other Brian all making the get member back a thing said around and

those on So hold to we members.

Operator

Next Cowen. from TD question comes from Maksim Rakhlenko

Maksim Rakhlenko

Great.

the what's more turnaround. your you does you may So that and spend longer the to it to most continue in Colleen, of as the conversations what have view of your take pace sponsors? with to surprising versus plan implement conviction operators from time of with been just how And part franchisees, and do more parts inform you

Sharon Zackfia

the to the to longer-term So imperatives on got growth as plan, strategic to we've focus we've our growth. our confidence it those And plan accelerated ambition. think and in achieve our imperatives support resourced strategic place I in relates

it a stood the conversations, the of of to out there year, the is pride the unlike that our of how -- Planet much last Fitness a brands. to As gosh, business narrow and brand. other is got we've operator quality, is lot pretty franchisee into the band in relates one things really coming of one things And

greater to time, are continue So drive experience. same top we the for and at on in our which cost growth to to economics. and why -- focus deliver to and unit member clubs. the franchisees line differentiated They continuing franchisees, build same to committed even at their committed is time, continuing our look delivering value our want we the to unique are At investing

together. growing and end opt-in when quarter the clubs also participation nearly of of expense. of an quite strategy also That confidence out the think brand of at estate had, promise opting the in to year. unbudgeted are stronger program rolled equipment start our think in XX% I our fourth incredibly the of excited XX% the I we speaks you last in year, the high an that's when mean again, franchisees their rate in their our to QX and about before plate-loaded put

So franchisees. great our partnership with

Maksim Rakhlenko

Qlik can volatile and of moving that Jay, -- many throughout potentially compares cancel pieces? think does membership on into to there's sort throughout it then, anything share then . And and the you how helpful. year, That's how about play cadence, because year, maybe comps, to just are versus the the the just

Jay Stasz

for Max, sure. Yes,

driven as seeing we've we're by membership. talked and comp So comp right a about XX% roughly from standpoint, being XX% is by now, rate that

corporate by we the it of in As then that, is think we'll or next beyond transaction rate anniversary way year, certainly that this do then card we the think increase. comp end the class that's as until decision level made spike continue we're beyond but terms collect I how XX% that see mean today, to cancellations, that. we yet going the got normal We've do of return we cancel, stated, And right, in a and XXX% to even think about and And price June to we've membership And on click-to-cancel, and on trends. in haven't rate-driven, be approach I an modeled clubs. through we both built out driven really then see Colleen largely initial we our that, trends.

Colleen Keating

maybe spike. even initial elevation, an a quite It's not Yes, right.

Operator

Baird. Next question Jonathan Komp from comes from

Jonathan Komp

for run rate, any ending you comps a changes here, on But Are one further. better the you not you're know just any was up the seeing in though 'XX assuming levels. step comps. highlighted midpoint follow-up change compared QX even could any on to member in pricing the slightly at last I Maybe little the QX, behavior?

you're if changes seeing in wondering behavior? . just any So

Jay Stasz

No, we're not. We're seeing good consistent trends.

Colleen Keating

we membership, spoke will of rate continue membership, we XX . rate the is it's not cycle than favorability which over life to right? you balance that the I longer the as see months. $XX, versus well, with see -- think of about And

Jonathan Komp

personnel of get step-up Great. underlying sense Jay, or more line view as earnings of model, Any if growth earnings in differently of to you Okay. a if you in type follow-up, Any the better or what way XX% more ask, there initiatives potential. leverage in growth could year? And one making the a I and would rate? roughly you're other just maybe top perspective to trying more a then for possible will, investments the some quantify normalized

Jay Stasz

beyond we're guiding Yes, this not sure. 'XX And point. at

plan Colleen and would around later want our to year below come the ultimately, right, have I long-term that. will the out We growth. of discussion we and want sales more in the line algorithm like a top we -- SG&A typically, said to mean,

your get year, we've that, who growth So on a a and would team, including the expansion. talked compensation. about, we EBITDA Colleen CEO We the the is also CMO. Blue right, when unique exactly point, right? year to we This of have bit in would And have margin did CEO lapping have as is leverage we Ribbon touched adding and investing we we've not this, CDO are the -- interim some against

that. then imperatives in component invest that we to And as chunk other the is that's a can continuing so of So strategic well. dollars the have

So in bit foundation. this to expect we your point, would then making building of that is an leverage we're a year years. to anomaly And the sure out get

Operator

Megan from Morgan Clapp Stanley. comes from question Next

Megan Christine Alexander

guess back external Colleen, about Up just remarks I earlier more message I prepared on to too consistent been talk the gating to on in message you've wanted to maybe follow-up interest about the like getting the comments have remarks saying, things seem me of until and terms just factors real you've aiming prepared increases would some to in a just the to bit the in terms rates, estate which made development and grow the your a of continued nature, bit think we don't about. shifting I to circle achieve back availability, quickly. questions. XXX is in the "Hey, of want today, in units comments

I a pattern mentioned establishing you of think reliable expansion.

lot and is piece strategy you in year. Chip you're unit this Or saying, to make Chip at later look finer to moving but back that of just everything, him hopefully understand then a gotten is put we come So all? we'll it, on point year, later and the of seat, hasn't hear the can want development changing in to at we'll terms and pieces, his there's a just and sure from this

Colleen Keating

both, little I Megan. a bit it's of think

had certainly, million we've when printing with get had back start will the to X. or think $XXX -- I questions about questions something we've starts we that recently

that of of it's though say to fulfill their I foundation that kind wanted cost years, and relationships put building and of and our see the . and it's to the resources, team the kind franchisees right build in developers year X we've our longer locations to not think we're of the answer and development but question, help a the growth to I right guiding ramp term with to kind resources, CDO. with solely also identify at that real resources this a than endeavoring and to it's So estate not looking human cadence then not team, build team we're It's great XXXX, in not that and our also opportunities. brokers looking CDO even

Megan Christine Alexander

sizable kind maybe CapEx, a just Great. for where On for guide kind had follow-up 'XX, years first as at above That's then we looking And increases you've X of a your of and of of Jay. in were quick helpful. percent sales, well pre-Covid. Okay. CapEx

start established to the a more lot moderate how increases become accelerating shift CapEx, of franchise beyond guess in expansion. and we that a should bit more little international I these understand as future driven by 'XX, that's about to international model? But be rate So can markets should thinking a in you

Jay Stasz

Yes.

guiding put going that's sheet on beyond to I financial strength our to a capital. fair 'XX. to not continue it. recycle we're And to balance and mean lens our think I leverage we're

do the intent be to same Europe So to the another refranchise this Spain then year, thing. is in and there could opportunity

So that CapEx in what we're out not the future. be could forecasting

Colleen Keating

time, same committed While franchise [indiscernible]. remaining XX-XX to the at is

Operator

comes Wolfmeyer Piper from Next Korinne Sandler. from question

Korinne Wolfmeyer

next working we spend awareness? and of cadence should in want the year. and some for of to little be more prior How thinking have terms brand mean the throughout comparing be a on that spend the this should touch I in your place. years marketing initiatives plans year quarters do about some bit of I the spend X and you how new marketing to

Colleen Keating

I'll mean, I that. touch Yes. on

both too and funds both the you does the a LAP ad know, percentage in local revenue. the as grows, so last revenue funding NAF so national Therefore, and funds. are As and to the of

but increased spend local strong with come QX. an and where level competitive the the the that to there'll both be on reasons, the marketing going spend to gate where And we're promo So really year be annualized fair and out as the and spending That we have well. for quarters will disclose -- level. we're to proportion going don't going know throughout of more know, that be a always at see other you'll of we on basis. or coverage in We're promo, you we'll national be as periods

Korinne Wolfmeyer

chance Great. upgrades they're plans. And as been being of new lot the right but to about of build the having then any that Is that think And equipment that over some they've choice face franchisees just make? that equipment we unit the as a they're having a follow-up, making, their are there also a not a of consideration growth? to . having that is prioritize Or unit now? is that maybe

Colleen Keating

pace will and mean got I in the are I investing narrow end are their way, in expect equipment made discretionary time, majority we've mentioned, to by that our what those I good clouds, be all the quality strength year, the pieces last at our few right? their franchisees time of equipment in add their of of vast reequipped of And Our of opportunities. say decision at as the year. additional development the to additional with a a that this same meeting end -- line, franchisees tail that we on is band can virtually clubs strength additional of the year

trading not reequips it seeing we're or versa. So in development vice balance for and

Operator

of comes from question Perry Bank from America. Next Alex

Alexander Perry

I for guess X me. just

box second to seems equipment, you it are the Black Black or you some in penetration you by penetration? better the planning seeing in like there cohorts. equipment in format? my members has The see uptick Card in to age been Black is, the terms that about I then changes think you differences the past question any to had reception desire. customer And Card any think differences the new starting you demographic? of other more Are Card strong spoke perks age younger demographics. strength are optimize Is First,

the informed work? getting and some that of . with of customer your repurpose you're sort what informs addition and to the what something that the box And -- has from surveys decision strength is of or equipment,

Jay Stasz

Yes.

no start is I by age lower other do of differences demographic. by mean, Card Gen -- typically Black see I on the So But group. the can the obviously, driven penetration bit generations. a had Z Well, some that we And been than year-over-year, change so not creep up, but little major of has than XX%, Gen it's the -- we've Z. to been other consistent necessarily by

Colleen Keating

utilizing our a we've inform and answer balance as penetration really they how I'll age survey as to decisions, increases how helped clubs. and input strength members -- arrived or And also complement as both consumer that say data of Gene data stronger formats our feedback, and for and very survey those And your the touch And at And pieces we Black inputs both tested well. that around strength. inform feedback the question favorable increased strength the and our we've we we've members and -- equipment they tried both ages, the about model of in member preference then on decision. Card observed on Yes. I'll of a the new capture it decision see had as is

the cardio. It the equipment of format that is to is in with additional strength pieces balance and important recognize optimization the

mix. refine cardio prospective the we At know to members members we cohorts, time, optimize across the same greater So there's that a our utilization strength or workout of generational equipment in routine. continue and

on a complement of we and utilization, and strong treadmills. stairclimbers Arc example, increased back of at pulled for look trainers, we've maintained As complement and but ellipticals the

So format decisions. constantly we the feedback consumer we're data help use And to optimization testing. both and inform

XX% about a corporate with beautiful the of format things seeing our as One got optimization test great what members. resonates be constantly of testing having clubs. most We've our and to fleet lab

Operator

Your next Siew question Xian comes BNP from Paribas. from

Xian Siew Hew Sam

went little during Could pricing key Times to New us event, how in color response more a give and kind you period. Year's terms on of the the bit the Square that maybe January of

Jay Stasz

of here our that you early not Yes. then have on This . We're Jay. change years growth we next consistent it. of is commenting when over is when will QX. is the which earnings next cans be bit Got couple do We'll 'XX it an a growth? Or of And could actually mentioned that example from store, better. kind call, potentially consistent May. openings the on the that store little

mentioned I from cadence on question. to I the ramping potentially X think think you here, answer

about think to how 'XX. the curious Just

Colleen Keating

of about committed would the 'XX oversand and know our little year. Again, is providing in I we not to guiding Yes. And go-forward I longer-range for are those looking 'XX beyond later some kind think a we're bit yet. plan. very everybody

about read I of is into think also starts you've of could a X. back growth. what openings about you that some getting the us sustained heard comments number we've with talk talked to healthy that annualized pace an And kind for

can So accelerating it growth. again, relates that. talked -- you when accelerating let growth, that infer you strategic to about And about have as we we club the new imperatives, from I'll infer talk

We focused. way. growth healthy very to we're do So want right in and the it

the I've crop and the year. also said to we then year don't bumper one have to want print of lap that. That's

more numbers pace growth. And of year. steady healthy a this steady healthy, a again, later So

Operator

session. Q&A Keating, turn over [indiscernible] Colleen will I the to remarks. closing CEO, call for

Colleen Keating

accelerate brand forward. excited growth for you all healthy progress X to imperatives, propel in strategic thank the the and am us that XXXX I which the made and our questions. Well, about enable we've will sustainable against

proposition you, We value for continue deliver economic and to even for ultimately our to focused be everyone. on franchisor, the stakeholders, shareholders. members Thank boosting value all more franchisees

Operator

Thank you call. joining, today's you now may for disconnect. concludes that gentlemen, and all and Ladies

Planet Fitness (PLNT) 25 Feb 252024 Q4 Earnings call transcript