Planet Fitness CEO: Gen Z gym memberships are ‘off the charts’
As Americans shake off pandemic trends and return to the gym, fitness chains like Planet Fitness (PLNT) are seeing increased membership sign-ups — particularly from one demographic.
"The boomers and the Gen Xers are just a little slower to come back," Planet Fitness CEO Chris Rondeau told Yahoo Finance Live (video above). "Millennials are great."
"But Gen Zs," he added, "have gone off the charts. I mean, they've been joining about 150% of normal pre-COVID ever since we started opening our doors, and they continue, which is really great to see."
The rapid increase in memberships among younger consumers has been driven by the gym's targeted programs and connective fitness apps, according to Rondeau.
He explained that apps with workout content have been giving gym-goers the ability to learn exercises on their own and perfect their forms — an attractive proposition for those just starting to lift weights.
"What's interesting with the Gen Z population, I remember when I was in high school, my form was horrible," Rondeau said. "Their form is unbelievable, and it's because they can teach themselves."
The Planet Fitness app offers content like this, and it also engages customers by letting them pay their bills and check how busy the gym is. There are other perks, too, such as discounts for beloved Gen Z brands like Crocs.
Furthermore, the gym chain offers a free teen summer membership, which brought in 3 million teenagers who logged 14 million workouts this summer. That was compared to only 1 million teen workouts logged in 2019, indicating younger members are showing a higher propensity to work out.
And Rondeau mentioned there's another positive side effect of the teen program for Planet Fitness: Parents who drop their kids off at the gym have been more willing to sign up for memberships themselves.
‘Returning to normal’
Overall, Planet Fitness has come out of the pandemic with an all-time high level of memberships at 16.5 million members.
Although the company fared better than many other gyms — boasting zero closures — the past couple of years have been difficult as shutdowns and restrictions during the pandemic hindered people from going to the gym.
“The last two years have been a little tough," Rondeau said. "This year has been really good. I’m happy with what I’m seeing. We added over a million members in the first quarter and 300,000 net members in the second quarter."
The company's second-quarter earnings matched Wall Street analyst expectations due to recent tailwinds. Revenue for the quarter hit $224.4 million, below estimates but a 63.5% increase from a year ago.
Planet Fitness said it saw a return to pre-pandemic member levels, stating that 34% of franchises are at or above that level now with more stores steadily making it back to that level. Same-store sales growth was up 13% in the second quarter as well.
Stores “just want to see that memberships come in, and they've seen that,” Rondeau said. “And the marketing is working. And members are coming through the front door again.”
And as the pandemic wanes, Rondeau is seeing signs that Americans are finding more reasons to work out.
"I think people have begun to see that fitness is not just about waistline and going to the beach," Rondeau said. "It really isn't. It's really what happens on the inside, right? Mental health, good for your heart, clears your mind, reduces stress, helps you sleep better — and I think people are really realizing now, especially with what's going on in the world, what we all went through with COVID, that that's really what matters."
Ethan is a writer for Yahoo Finance.
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