Planet Fitness stock surged on Thursday, buoyed by the gym chain's robust fourth-quarter earnings report, which outweighed less-than-stellar guidance. The company also announced the impending retirement of Chief Financial Officer Tom Fitzgerald.
Financial Performance Highlights
In the fourth quarter, Planet Fitness delivered earnings per share of 60 cents, with revenue amounting to $285.1 million. This surpassed analysts' expectations of 58 cents per share on revenue of $282.2 million. Moreover, same-store sales for the quarter met Wall Street estimates at 7.7%.
Market Response and Future Projections
Pre-market trading on Thursday saw Planet Fitness shares rise by 2.4% to $67.45, while S&P 500 futures climbed by 1.3%. Despite a 21% decline in stock value over the past year, the company anticipates 2024 earnings to grow by 10% to 11% from 2023.
Analysts projected 2024 earnings per share of $2.52, reflecting a 12.5% increase. Furthermore, Planet Fitness expects a 6% to 7% revenue uptick from 2023 in 2024, compared to previous forecasts of a 7.8% rise to $1.16 billion.
CFO Retirement and Transition Strategy
Fitzgerald is set to retire at the end of August and expressed confidence in transitioning finance leadership during Planet Fitness's growth phase. The company will soon commence the search for Fitzgerald's successor.
Interim CEO Craig Benson recognized Fitzgerald's contribution to building a strong finance team, primed for a seamless financial leadership transition. Benson emphasized that 2023 marked the implementation of the "New Growth Model" at Planet Fitness, designed to foster sustainable store growth amidst post-pandemic economic shifts.
Looking ahead to 2024, Benson foresees a "transition year" as franchisees adapt to the new operational paradigm.
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