Planet Fitness (PLNT) Q1 Earnings: Can Growth Outpace Expectations?

Investors are turning their attention to Planet Fitness’ (PLNT) Q1 2025 earnings report, set for release on May 8, which will offer critical insights into the fitness giant’s ability to sustain momentum amid evolving market dynamics. With revenue growth, membership trends, and expansion plans all under scrutiny, here’s what to watch for.

Revenue Growth: Outpacing Guidance?

Planet Fitness has guided for a 10% revenue increase in 2025, but consensus estimates for Q1 already suggest a stronger start. Analysts project Q1 revenue of $279.9 million, a 12.9% year-over-year jump, building on the 19.4% surge seen in Q4 2024. This optimism reflects strategic price hikes, such as the $5 increase for its classic membership card in late 2023, which has bolstered average revenue per member (ARPU). Meanwhile, adjusted EPS is expected to rise 17% to $0.62, driven by disciplined cost management and strong retention rates.

Membership Metrics: Gen Z and Penetration Power

As of December 2024, Planet Fitness reported 19.7 million members, a 5% increase from 2023. While Q1 specifics remain under wraps, the company’s focus on Gen Z and premium Black Card offerings (now 64% penetrated) will be key. Gen Z now comprises the fastest-growing demographic, drawn by the brand’s quirky marketing and affordable pricing. However, competition from cheaper alternatives like Lululemon’s Athletica or digital platforms like Peloton could test retention.

Expansion and Margins: Balancing Growth and Profitability

Planet Fitness aims to open 160–170 new clubs in 2025, up from 150 in 2024, bringing the global total to over 2,700 locations. This relentless expansion, paired with price hikes, has fueled growth but strains adjusted EBITDA margins. The company must prove it can maintain margins amid rising costs for labor and real estate—a challenge highlighted in recent quarters.

Risks on the Horizon

While Planet Fitness’ model has proven resilient, risks linger. A potential slowdown in new member acquisition could pressure growth, especially if economic headwinds deter discretionary spending. Additionally, delays in club openings or margin erosion could unsettle investors. The company’s reliance on single-location leases also leaves it exposed to rising rent costs in key markets.

Conclusion: A Strong Foundation, but Execution is Key

Planet Fitness enters Q1 with a robust foundation: membership growth, premium product penetration, and a clear expansion roadmap. If the company exceeds revenue and EPS estimates while stabilizing margins, shares could climb, especially with the stock trading at a 17x forward P/E—lower than peers like Anytime Fitness. However, a miss on membership additions or margin compression could signal vulnerabilities.

The $279.9 million revenue estimate and $0.62 EPS target are achievable, but investors will scrutinize management’s guidance on 2025 club openings and Gen Z engagement. With 19.7 million members and a fortress balance sheet ($464 million in cash as of Q4 2024), Planet Fitness has the tools to navigate these challenges. For now, the gym’s formula—low-cost, no-judgment branding—remains a winning bet, but Q1 will test its scalability in 2025.

Investors should pay close attention to the May 8 earnings call for clarity on these metrics, as they could reshape the stock’s trajectory in the coming months.