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A month has gone by since the last earnings report for Planet Fitness (PLNT). Shares have added about 0.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Planet Fitness due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Planet Fitness Q1 Earnings Top, Revenues Lag Estimates
Planet Fitness reported mixed first-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues marginally missed the same. However, both the top and bottom lines increased on a year-over-year basis. Results in the quarter were driven by robust system-wide same-store sales growth as well as 65 new store openings.
Adjusted earnings came in at 35 cents per share, which outpaced the consensus estimate by a penny. The bottom line also increased 29.6% on a year-over-year basis. Notably, this marked the company’s seventh straight quarter of earnings beat.
Meanwhile, revenues of $148.8 million marginally lagged the Zacks Consensus Estimate of $153 million but surged 22.7% on a year-over-year basis. The top line was driven by a sharp increase in the franchise, corporate-owned stores and equipment revenues. System-wide same-store sales rose 10.2%.
Franchise revenues increased 20.4% to $65.8 million, whereas the Corporate-owned Stores segment’s revenues surged 16.3% year over year to $38 million. The Equipment segment revenues rose 32.3% to $45 million owing to a rise in equipment sales to new stores.
Moreover, EBITDA at the Franchise segment improved 29.1% to $47.4 million owing to a rise in royalties from new franchised stores. At the Corporate-owned stores and Equipment segments, EBITDA increased 27.9% and 39.3% to $15.6 million and $10.4 million, respectively.
Total adjusted EBITDA at the end of the first quarter rose to $63.4 million from $48.8 million.
Other Financial Details
As of Mar 31, 2019, cash and cash equivalents totaled $336 million compared with $289.4 million as of Dec 31, 2018. Long-term debt, net of current maturities, summed $ 1,158.5 million at the end of first-quarter 2019 compared with $1,160.1 million at 2018 end.
2019 Outlook
Planet Fitness continues to expect revenue growth of nearly 15% year over year in 2019. System-wide same-store sales are likely to increase in high-single digits. The company expects adjusted net income and earnings per share to increase 18% and 25%, respectively.