MW How Planet Fitness lost its way in the increasingly competitive gym market

By Claudia Assis

Planet Fitness acknowledged marketing missteps and showed slower growth in the crucial first few months of the year

Planet Fitness added about 700,000 members in the first quarter, fewer than in the first quarter of 2025.

Nothing seems to be going Planet Fitness's way these days.

For one, the budget gym operator (PLNT) is facing growing competition from companies such as private-equity-backed Crunch Fitness that are vying for a piece of the discount gym market. The pressure has been especially acute in the Southern U.S. region.

Planet Fitness has also made some marketing missteps, which hampered growth in the critical early months of the year. The company's recent marketing largely landed well with more fitness-minded people but not so much with beginners or casual gym goers, who are traditionally in the company's "sweet spot," CEO Colleen Keating said during an earnings call with analysts on Thursday.

The budget gym operator added fewer members in the March quarter than it did a year earlier, and now it's postponing plans to charge more for some memberships. The first quarter is peak for the gym industry, as potential new members are brimming with fitness-focused New Year's resolutions.

Finally, Keating acknowledged challenges brought upon by harsh winter weather and more cautious consumer sentiment.

Shares of Planet Fitness are down 30% so far this week, which would mark their worst weekly performance since March 2020, when they fell 37% as pandemic-era stay-at-home orders threatened gym operators.

Planet Fitness needs to make a stronger case for its value proposition, as competition will go from being a modest regional nuisance now to "a national challenge over the coming years," Cowen analyst Max Rakhlenko said.

That marketing misalignment is "fixable," analysts at UBS said. But the key question is whether tweaking that marketing message can address the gap in underlying demand. Planet Fitness said it added about 730,000 new members in the first quarter, compared with about 1 million new members in the same period a year ago.

Sharon Zackfia at William Blair pointed out that Planet Fitness's decision to postpone price increases for its Black Card membership level, plus the shortfalls in revenue and profit growth so soon after a November investor day, are likely to jeopardize management's credibility with Wall Street and raise questions about the threat posed by growing competition.

Zackfia lowered her rating on Planet Fitness's stock to the equivalent of hold, a move that analysts at BofA Securities and Cowen also made. Analysts generally see few catalysts on the horizon for the stock and think that a turnaround would be more of a long-term proposition.

Still, some are more hopeful. Jefferies analyst Randal Konik deemed Thursday's 31% stock plunge an overreaction. Shares got "nuked" as if the business model was broken, which it is not, he said.

"The narrative is the moat is eroding and the space becoming commoditized," Konik said. In reality, the new-member numbers were below last year's but still net positive, and Planet Fitness is significantly larger than competitors and grows faster than they do, he said.

The company still dominates its market the way companies like Walmart $(WMT)$, Amazon (AMZN) and McDonald's $(MCD)$ do in their own domains, but Planet Fitness shares are now priced well below those others, at levels akin to a "bankrupt retailer," Konik said.

"Missteps yes, but massively oversold," he said of the stock.

Planet Fitness on Thursday reported first-quarter adjusted earnings of 74 cents a share on revenue of $337 million, ahead of the FactSet consensus for adjusted profit of 63 cents a share on sales of $299 million. In the first quarter of 2025, it saw adjusted profit of 59 cents a share on sales of $277 million.

-Claudia Assis

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May 08, 2026 14:34 ET (18:34 GMT)

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