Source – BEAMSTART
Planet Fitness, a leading gym operator, has announced its decision to increase the base-level membership prices for new customers, marking the first hike since 1998. Despite growing concerns about customers’ cost-consciousness, the company revealed plans to implement the pricing changes starting this summer.
New Pricing Structure Introduced
Under the revised pricing structure, the classic card membership for new members will be set at $15 per month, representing a significant adjustment from the longstanding $10 per month rate. However, existing members will continue to enjoy the lower rate “for the duration of their membership,” as confirmed by Planet Fitness in conjunction with its quarterly earnings report.
Price Adjustments Follow Extensive Market Testing
The decision to raise prices comes after extensive market testing conducted in various regions across the country. Additionally, Planet Fitness disclosed its intention to pilot higher prices for its premium-tier membership, the Black Card, which provides access to all Planet Fitness locations, digital content, and additional perks, starting at $24.99 per month.
Planet Fitness Raising Membership Costs
Challenges Amidst Weaker-Than-Expected Revenue
The move to increase prices coincides with the company’s acknowledgment of weaker-than-anticipated first-quarter revenue and a downward revision of its fiscal year guidance. This contrasts with competitor Life Time Holdings, which reported robust membership growth and exceeded revenue expectations for its latest quarter.
Analysts Remain Bullish Despite Challenges
Despite the challenges and cautious consumer sentiment highlighted by interim CEO Craig Benson, analysts remain optimistic about Planet Fitness’ prospects. Piper Sandler analyst Korinne Wolfmeyer noted that the company’s recent leadership changes, including the appointment of a new CEO, Colleen Keating, and adjustments to pricing strategies, could serve as positive catalysts for the company’s turnaround.
The Street appears bullish on the potential impact of the incoming CEO’s extensive experience in brand-building and consumer-facing industries, signaling optimism for Planet Fitness’ future performance. As the company prepares for a new chapter under Keating’s leadership, investors are closely monitoring developments in anticipation of potential growth opportunities.
