Planet Fitness (PLNT) Q3 2026 earnings review
Planet Fitness lifts its sales plan, but franchisees build less
Planet Fitness beat its cautious sales plan at older gyms, but franchisees slowed new gym builds and membership stood still. Third-quarter revenue at the fitness chain and franchisor rose 9%, or 6% by our math excluding a pass-through advertising fee hike, as same-club sales edged up 1.5% and replacement machine orders carried the equipment unit. Chief executive Colleen Keating raised the full-year sales outlook, yet net profit excluding one-offs fell 8% on higher interest bills while total membership stayed at 21.5 million for a second quarter.
| Revenue (excluding ad-fund pass-through) | $360.0M (+6.2% ex-ad fund) +9.0% headline from a year ago |
|---|---|
| System-wide same-club sales | +1.5% +6.9% a year ago; FY outlook raised to 1.5%–2% |
| Profit per share, excluding one-offs | $0.83 (+3.8%) net profit excluding one-offs fell 7.6% |
| Franchisee new equipment placements plan | Cut to 135–140 previously 150–160 for FY26 |
⚖️ Verdict: 🔴 Bearish
The story got worse because independent franchisees are building fewer gyms than planned, weakening the unit-growth engine that was supposed to carry the company while member growth is stalled. Management cut its full-year target for franchisee equipment placements by about 10% and only raised its club-opening target by counting 25 gyms it just bought in Portugal, which means underlying openings fell by 15 to 20 clubs by our math. One positive: the chain entered Portugal for $115 million and started a review to sell US company-owned gyms to franchisees.
The question now is whether the new marketing campaign and $10 promotional rate can restart member growth without cutting what each member pays. Either the January sign-up season brings in new members while keeping Black Card upgrades steady, or discounted sign-ups lower average dues just as last year's equipment boom fades. First-quarter membership additions and same-club sales will settle it.
🐂 Bull Case
Same-Club Sales Beat a Cautious Plan
Planet Fitness, the gym chain and franchisor, entered the second half with a full-year outlook that pointed to flat or negative same-club sales, by our math. Same-club sales measure monthly dues at gyms open more than a year. In the third quarter, system-wide same-club sales rose 1.5%, topping that implied range against a 6.9% gain a year ago.
Chief executive Colleen Keating said the chain "delivered same club sales growth ahead of our expectations" and lifted the full-year same-club target to 1.5% to 2%, up from 1%. That beat proves the prior outlook was cautious rather than proving member sign-ups have recovered, because total membership stayed at 21.5 million for a second straight quarter.
What to watch: fourth-quarter same-club sales, where the updated full-year target points to about 0.3% growth by our math. A result above 1% would show dues per member can hold up even before the January sign-up season.
Portugal Deal and Club Review Shift Capital
Planet Fitness runs about 10% of its gyms itself and franchises the rest to independent owners. Its strategy is to buy or build gyms in new markets, prove the model, and later sell those locations to franchisees so it can reuse the cash. This quarter the company advanced both ends of that plan.
In the fourth quarter it closed the purchase of Be-Fit, a Portuguese chain of 25 gyms with about 80,000 members, for roughly $114.8 million (€102.5 million). Keating said the deal gives the brand an "established national presence" in its second European country and should add to earnings in 2027. Separately, the board began a "strategic review of refranchising opportunities of its domestic corporate-owned clubs" to free up cash.
What to watch: the number of US corporate gyms put up for sale and the cash proceeds named on the fourth-quarter call. Selling US gyms would recoup the $112 million cash paid at closing for Portugal.
Positives this quarter didn't test
Three operating drivers got no new numbers in the earnings release because their metrics live on the conference call or in the quarterly filing.
- Black Card membership share: the share of members on the higher-priced $24.99 tier stood at 68% last quarter; the call remarks will show if it rose again.
- Marketing and app relaunch: the redesigned mobile app, automated ad tool, and 100-day retention programme launched in September; first-quarter sign-ups are the first real test.
- Spa and recovery equipment: franchisees have been adding red-light and wellness amenities; the call will show how many clubs added them beyond the 100-club test.
🐻 Bear Case
Franchisees Slow New Gym Openings and Orders
Planet Fitness relies on independent franchisees to open roughly 90% of its new gyms and buy the exercise machines inside them. On the headline, the company raised its full-year target for system-wide new club openings to 190 to 195 locations, up from 180 to 190.
The footnote cuts against that raise: the new target is the first one "which includes the acquisition of Be-Fit" and its 25 existing gyms in Portugal. Stripping out those 25 bought gyms, underlying new openings fell to 165 to 170 by our math, a cut of 15 to 20 clubs. At the same time, the company cut its outlook for new equipment placements in franchisee gyms from 150 to 160 down to 135 to 140, after placing machines in 21 new franchisee gyms this quarter versus 27 a year ago.
What to watch: fourth-quarter franchisee equipment placements, which by our math must reach 80 to 85 to hit the lowered plan, compared with 96 in last year's fourth quarter. Another shortfall would show franchisees are delaying builds into 2027.
Ad-Fund Pass-Through and Replacements Carry Revenue
Total revenue rose 9.0% from a year ago to $360.0 million, but two low-margin or temporary items did most of the work. Starting in 2026, franchisees raised their contribution to the National Advertising Fund (NAF), the pool of money spent on national commercials, from 2% of sales to 3%. Because Planet Fitness records every dollar collected as revenue and every dollar spent as an identical expense, the change adds revenue with zero profit.
- Revenue excluding the ad fund: up 6.2% from a year ago by our math, 2.8 percentage points below the 9.0% headline.
- Operating margin: fell 4.2 percentage points to 28.2%, as ad-fund expense rose 2.4 percentage points of revenue and last year included a $6.4 million club-sale gain.
- Equipment revenue: up $8.8 million (11.1%), driven by $9.6 million more in replacement machines for older gyms while sales to new gyms fell $0.8 million.
What to watch: fourth-quarter revenue, where the raised 8% full-year outlook still implies a 2.3% drop from a year ago by our math, or a 5.4% drop excluding the ad fund, as the chain laps last year's record equipment quarter.
Flat Membership and Higher Debt Weigh on Profit
Planet Fitness ended September with approximately 21.5 million members, unchanged from both March and June. While the third quarter is seasonally slow for gym sign-ups, the member count has now gone six months without growing, leaving price mix and new gyms as the only drivers of dues.
Meanwhile, borrowing costs are taking a larger bite out of earnings. Gross interest expense rose 29.6% from a year ago to $34.1 million, and the $75.0 million credit line drawn in the second quarter to buy back shares remains on the balance sheet alongside $2.47 billion of other debt. As a result, net income excluding one-offs fell 7.6% to $61.9 million, and only a 10.7% drop in diluted shares kept profit per share excluding one-offs up 3.8% at $0.83. The board still approved a new $500 million buyback plan.
What to watch: whether management pays off the $75.0 million credit line by December as previously planned, especially after spending $112.0 million in cash to close the Portugal acquisition in the fourth quarter.
Risks this quarter didn't answer
Four standing risks around pricing, competition, and franchisee health received no new data in the earnings release.
- National $10 Classic Card promotion: no numbers on how many people joined on the discounted lifetime rate or whether they traded down from the $24.99 Black Card.
- Gross member sign-ups and cancellations: total membership stayed at 21.5 million, but the release does not split out how many joined versus cancelled.
- Regional price gaps: no update on South Central and Southeast markets where rival gyms charge less than the standard $15 Classic rate.
- Franchisee loans and credit reserves: the nine-month cash flow statement shows $20.6 million lent to a related party, and the credit-loss reserve on held-to-maturity investments ticked up $0.5 million to $26.0 million; the quarterly filing notes will give the details.
💲 Other KPIs
Free cash flow — operating cash left after paying for buildings and gym equipment — dropped 62.6% from a year ago to $28.9 million in the third quarter, by our math from the nine-month cash flow statement. Capital spending jumped 48.8% in the quarter to $81.5 million as the chain built 8 corporate gyms and upgraded existing locations.
Deferred revenue — cash collected up front for annual membership and franchise fees before the service is provided — rose 12.7% from December to $99.4 million. Equipment deposits from franchisees waiting for fourth-quarter machine deliveries more than doubled from December's $10.2 million to $23.0 million, backing the seasonal fourth-quarter installation wave.
Profit before interest, taxes, and depreciation at company-run gyms edged down 0.4% from a year ago, even as segment sales rose 3.5% to $142.7 million on a 1.8% same-club sales gain. Operating costs at newly opened gyms ($1.9 million) and the August 2025 sale of eight California gyms ($1.0 million) offset gains at older locations.
🔮 Guidance
Raised. The full-year target moved up by three-quarters of a point at the middle of the range after three straight quarters above 1%. By our math, with the first three quarters averaging 2.2%, the new range leaves roughly 0.3% same-club sales growth for the fourth quarter against a 5.7% gain a year ago. That keeps the fourth quarter positive after the company cut this target from 4%–5% in the spring.
Raised. The fitness franchisor lifted its top-line growth target by one percentage point, reversing half of the two-point cut it made in the first quarter. Because revenue already grew 12.1% over the first nine months, the 8% full-year plan points to fourth-quarter revenue of about $368 million by our math — down 2.3% from last year's fourth quarter, or down 5.4% excluding the ad-fund rate increase.
Raised. Operating cash profit before interest, taxes, and depreciation is now set to grow 6.5% this year, up half a point from the prior plan after growing 8.2% over the first nine months. By our math, that leaves about $149 million for the fourth quarter, or 1.7% growth from a year ago, as fourth-quarter equipment sales face a high comparison.
Cut. The company lowered its expectation for new franchisee gym outfit orders by 17.5 locations at the middle of the range, down 10% from the 152 placements completed in 2025. With 56 placements finished through September (35 in the first half and 21 in the third quarter), the lowered plan leaves 79 to 84 placements for the fourth quarter against 96 a year ago.
Raised on the headline, cut underneath. Adding the 25 acquired Be-Fit gyms in Portugal lifted the stated range by 7.5 clubs at the middle, but excluding that purchase reduces underlying openings to 165 to 170 — down from 181 opened in 2025. With 71 gyms opened through September, the plan requires 94 to 99 fourth-quarter openings besides Be-Fit, compared with 104 last year.
Raised to the top of the prior range. Full-year capital spending is now set to rise about 15% from last year's $163.7 million, or to roughly $188 million by our math. Because the US company already spent $148.9 million over the first nine months (up 31.1%), the full-year figure implies fourth-quarter capital spending drops to about $39 million from $50.1 million a year ago.
Cut. Expected growth in non-cash wear-and-tear and intangible write-downs dropped by three percentage points, matching the slower pace of corporate equipment and club additions through the first nine months, when the line rose 5.3% to $122.0 million. The lower non-cash charge helps cushion full-year net income against higher interest bills.
Unchanged. Even with higher revenue and EBITDA targets, the plan still has full-year profit excluding one-offs falling 3% to about $250.6 million by our math, after cutting this line in both the first and second quarters. Since nine-month profit excluding one-offs is roughly flat (+0.1% at $189.8 million), the full-year target points to a 12.0% drop in the fourth quarter.
Unchanged. Profit per share excluding one-offs is still set to rise 6% for the year, entirely because share buybacks cut the average share count from 84.1 million last year to about 77.0 million. The third-quarter share count already reached 75.0 million after the latest $50.0 million buyback, leaving a small per-share cushion for the fourth quarter.
Unchanged. Net interest cost stays at the $115.0 million level set last quarter after the company drew $75.0 million on its variable funding notes. Through nine months, gross interest expense minus interest income totaled $84.4 million, leaving about $30.6 million of net interest cost for the fourth quarter versus $24.0 million in last year's fourth quarter.
❓ Key Questions
Did the $10 promotion lift sign-ups or cut prices?
Planet Fitness tested a national $10 monthly Classic Card offer in the third quarter with lifetime price protection, yet total membership stayed at 21.5 million. Management has not disclosed how many members joined on the $10 rate or how many skipped the $24.99 Black Card.
Why did franchisees delay 15 to 20 new gyms?
Cutting franchisee equipment placements from 150–160 to 135–140 while masking the drop in the club-opening target with 25 bought gyms in Portugal points to slower franchisee building. Investors need to know whether real estate delays, equipment costs, or weaker club returns caused the slip.
How many US corporate gyms could be sold?
The company owns roughly 10% of its nearly 3,000 clubs and just opened a strategic review to sell domestic corporate gyms to franchisees. Naming the number of clubs under review and the EBITDA they generate would show how much cash the review can unlock.
Will the $75M credit line be repaid this year?
Last quarter the finance chief planned to repay the $75.0 million variable funding note from cash by December. That loan was still on the balance sheet on September 30, just before Planet Fitness paid $112.0 million in cash at closing for Be-Fit in Portugal.
What are the revenue and profit numbers for Be-Fit?
Planet Fitness paid €102.5 million ($114.8 million) for 25 gyms and 80,000 members in Portugal and said the deal will add to earnings in 2027, without giving Be-Fit's annual sales, EBITDA, or the cost to convert the clubs to the Planet Fitness brand.