Planet Fitness Stock Nears Buy Point On Strong Q2, Raised Outlook

Fitness-center operator Planet Fitness (PLNT) lifted full-year guidance after topping second-quarter forecasts late Wednesday.

XAutoplay: On | OffEstimates: Earnings per share of 19 cents, up 12%, on revenue of $102 million, also up 12%.

Results: EPS of 22 cents on revenue of $107.3 million. System-wide same-store sales climbed 9%, as franchisee-owned comps increased 9.3% and corporate-owned comps grew 4.3%.

Outlook: Full-year EPS is now seen at 76-78 cents, up from a prior view of 74-77 cents, on revenue of $409 million-$415 million, up from $405 million-$415 million. Analysts see EPS of 77 cents on revenue of $415 million. Planet Fitness sees same-store sales up 8%-9% vs. a prior view of 7%-8% growth.

Stock: Planet Fitness climbed 3.7% to 23.90 late. Shares closed down 0.7% at 23.04 in the stock market today, testing their 50-day moving average. The stock is currently in a flat base with a 24.68 entry.

Planet Fitness has made a name for itself by being a less-intimidating, less-judgmental place to exercise. And as malls empty and retailers shutter stores, fitness centers like Planet Fitness, which have avoided the Amazon (AMZN) threat and other retail difficulties, have been more likely to appear in their place.

But Planet Fitness's higher-end, niche rivals have grown quickly, a Wedbush research note in June said, posing a risk to the chain. However, Planet Fitness owners told Wedbush they weren't concerned with the industry trends.

"Our contacts believe that in the current environment as targeted niche chains are divvying up the high-end of the market while (Planet Fitness) goes after the less avid fitness consumer and those without gym memberships, traditional gyms are getting squeezed," the note said.

The note also said that many Planet Fitness owners and managers that Wedbush spoke with said that they believed more room for growth existed, potentially outside the Northeast, where Planet Fitness was founded. However, the people said "the best locations are increasingly fewer and farther between."

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