Planet Fitness Inc. experienced its steepest single-day stock decline since its 2015 market debut on Thursday, with shares tumbling 31% to close at $44.01. The dramatic move followed the company's announcement that it is significantly reducing its 2026 growth targets and putting a planned Black Card membership price increase on hold.
The gym chain now anticipates same-club sales growth of approximately 1% for 2026, a sharp reduction from its previous forecast of 4% to 5%. Revenue growth expectations have also been trimmed to about 7%, down from an earlier projection of 9%. This downward revision undercuts a key bullish narrative that Planet Fitness could continue expanding its footprint through its low-cost, franchise-centric model while simultaneously raising membership prices.
Despite the bleak outlook, the company's first-quarter financial results showed some strength. Revenue rose 21.9% to $337.2 million, while adjusted earnings per share increased to $0.74 from $0.59 in the prior-year period. Net income attributable to the company also climbed to $51.6 million, up from $41.9 million a year ago.
CEO Colleen Keating acknowledged on the earnings call that the company is facing both internal and external headwinds. Net membership additions exceeded 700,000 during the typically busy first quarter, but Keating expressed dissatisfaction with the pace of growth, citing a noticeable slowdown in March and early April. She noted that recent marketing campaigns have attracted more fitness-focused customers but may have alienated the beginner and casual gym-goers who form Planet Fitness's core demographic. As a result, the company plans to reset its marketing strategy to better capture demand.
The Black Card membership tier, which commands a higher price, has also been a point of concern. Keating stated that management is avoiding introducing a "price headwind" while membership growth is still regaining momentum. Previous experiments with Black Card price increases had dampened new sign-ups, according to the CEO.
Management attributed the challenges to a combination of factors, including adverse weather conditions, increased competition in the South Central and Southeast regions, and ongoing consumer headwinds. Interim CFO Thomas Fitzgerald noted that January member churn spiked, partly due to marketing that included "cancel anytime" language. After adjusting that messaging, attrition rates improved but remained above last year's levels.
Wall Street reacted swiftly. BofA Securities downgraded Planet Fitness from Buy to Neutral, slashing its price target from $110 to $59, citing disappointing sign-up numbers, unfavorable weather, and heightened competition. TD Cowen also downgraded the stock from Buy to Hold, reducing its price target from $90 to $50. Analyst Max Rakhlenko advised Planet Fitness to sharpen its value proposition as it navigates shifting demand and increased rivalry, also warning that competitive pressures at the local level could escalate nationally.
William Blair highlighted the emergence of high-volume, low-price gyms such as Crunch Fitness, EoS Fitness, and VASA Fitness, which are attracting private capital as they scale. These competitors offer basic memberships priced between $15 and $30 per month, directly challenging Planet Fitness's value proposition. While Planet Fitness acknowledges competitive pressure in certain markets, it has not named specific rivals.
Despite the headwinds, Planet Fitness maintains a significant size advantage. As of March 31, membership stood at approximately 21.5 million across 2,909 clubs. The company reaffirmed its plan to open 180 to 190 new clubs this year and repurchased $50 million worth of shares during the quarter.
However, the marketing reset and the pause on Black Card price increases could pressure revenue and franchise returns if not executed effectively. William Blair warned that delays in pricing adjustments might crimp club returns and threaten franchised growth targets for 2027. TD Cowen cautioned that if mature gyms begin losing members, the entire system could come under strain. Planet Fitness has withdrawn its previous three-year forecast, signaling a shift in focus toward re-engaging the value-conscious newcomers that have long been the company's foundation.
