Planet Fitness Raises Membership Prices for New Customers
Photo Credit: Leah Millis | Reuters
Planet Fitness recently announced that it will be increasing its base-level membership prices for new customers for the first time since 1998. This move may seem surprising as the gym operator acknowledges that customers are becoming more cost-conscious.
Starting this summer, the classic card membership will be priced at $15 per month for new members, while current members will continue to pay $10 per month “for the duration of their membership.” According to the company’s outgoing chief financial officer Tom Fitzgerald, it will take some time for the price change to expand their store level margins since the price increase only applies to new classic card memberships.
This decision follows months of price testing in various markets nationwide. In addition to the price increase for the base-level membership, Planet Fitness also plans to test higher prices for its top-tier membership, the Black Card, starting at $24.99 per month. This membership offers customers access to any Planet Fitness location, digital content, and other benefits.
While Planet Fitness recently reported weaker-than-expected first-quarter revenue and lowered guidance for the fiscal year, competitor Life Time Holdings posted better-than-expected results and strong membership growth for its most recent quarter. Life Time tends to attract older, more affluent gymgoers, while Planet Fitness appeals to a younger, more budget-conscious demographic.
Although interim CEO Craig Benson cited various macro conditions impacting the consumer base, analysts still see positive potential for the company. Piper Sandler analyst Korinne Wolfmeyer maintains a “buy” rating on Planet Fitness stock with an $80 price target, citing the recent leadership changes and pricing adjustments as positive developments.
Investors are optimistic about a company turnaround under the leadership of incoming CEO Colleen Keating, who is set to assume the role on June 10. With her background in brand building and leading consumer-facing companies, there is hope for a successful revitalization of the Planet Fitness brand.
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