Planet Fitness, Inc. has filed an S-1 form with the Securities and Exchange Commission (SEC) for its Initial Public Offering (IPO) for $100.0 million on Jun 22. However, no details of the number of shares and their price were disclosed. This fitness center intends to get listed on the New York Stock Exchange (NYSE) under the symbol “PLNT”. JPMorgan Chase & Co. JPM Bank of America Corporation BAC, Credit Suisse and some other major international banks will be the lead underwriters for the offering.
Planet Fitness is majority owned by buyout firm TSG Consumer Partners that acquired the company in Jan 2013.
Impressive Growth Story
The company believes that in terms of members it is the largest U.S. fitness center operator with over 7.1 million subscribers. The number has grown from just 2.3 million as of 2010.
The company charges just $10 per month and had 976 stores as of Mar 31, 2015. Of these, 919 were franchised and 57 were company owned. Moreover, The company has grown drastically over the past four to five years. We note that, as of Dec 31, 2014, the company’s number of stores had grown to 918 in 47 states across the United States, Puerto Rico and Canada from only 389 stores in 39 states in 2010. Per media reports, Planet Fitness opened its 1000th store in Jun 2015.
The company has stated in its S-1 filing that it has the opportunity to more than quadruple its store count to over 4,000 stores in the U.S. itself. The company has entered into an area development agreement with its franchisees wherein the latter have agreed to open more than 1,000 additional stores.
System-wide sales of $1.2 billion at the end of 2014 reflect a compound annual growth rate (CAGR) of 30.1% since 2010. Meanwhile, total revenue of $279.8 million in 2014, reflect a CAGR of 32% for the same period. Moreover, 33 consecutive quarters of system-wide same store sales growth is commendable.
Other Features
The company says “We’re not a gym. We’re Planet Fitness”.
The company calls its gyms “Judgement Free Zone, where anyone – and we mean anyone – can feel they belong”. It lets people feel comfortable and enjoy their fitness experience. It provides Tootsie Rolls at the front desk and other membership appreciation gestures such as monthly Pizza Mondays and Bagel Tuesdays at no additional costs to pull crowds.
The company’s stores span over an area of 20,000 square feet but do not offer amenities such as group exercise classes, pools, day care centers and juice bars. Hence, the stores have ample space for equipment and there is no time limit for using the machines.
Additionally, both the cards offered by the company, standard as well as PF Black Card membership, cost less than the industry average. With the standard membership card, members can access most of the amenities for $10 per month. PF Black Card members have to pay $19.99 per month and they have access to all system-wide stores as well as to amenities such as water massage beds, massage chairs, tanning equipment and more.
To Sum Up
We don’t know how Planet Fitness will perform. However, given its impressive track record, the company is expected do well when it goes public. There have been quite a few health and wellness related IPOs of late. Fitbit Inc. FIT and MINDBODY, Inc. MB are the two companies that have begun trading lately.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment