Personal Finance

Why Planet Fitness, Inc. Climbed 12% in August

Woman and man running on a treadmill in a fitness gym

What happened

Shares of Planet Fitness (NYSE: PLNT) , one of the largest and fastest-growing fitness-center operators in the United States, climbed 12% in August, according to data provided by S&P Global Market Intelligence . The stock's rise was, most likely, driven primarily by solid second-quarter results and an analyst's 12-month price-target increase for the stock.

For its second quarter, Planet Fitness reported revenue of $107.3 million and adjusted earnings per share of $0.22. These figures were up 17% and 29% year over year, respectively, exceeding analysts' consensus estimates for the quarter.

Woman and man running on a treadmill in a fitness gym

Image source: Getty Images.

After Planet Fitness reported its second-quarter results, Roth Capital analyst Dave King said strong membership growth and margin improvement led him to increase his price target on the stock from $23 to $27.

So what

Planet Fitness's nice year-over-year rise in revenue was helped during the quarter by impressive same-store sales growth of 9%. The rise in same-store sales extended a trend of growth in the key metric, marking the company's 42nd consecutive quarter of same-store sales growth.

Thanks to growth in its high-margin franchise segment, Planet Fitness' earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 30% year over year.

Now what

After the better-than-expected results, management increased its guidance for full-year results. Planet Fitness now expects full-year 2017 revenue between $409 million and $415 million, up from a previous guidance range of $405 million to $415 million. Similarly, management now expects same-store sales growth of 8% to 9% during this period, up from a previous expectation of 7% to 8%.

CEO Christopher Rondeau was optimistic in looking ahead:

I am confident that our compelling concept and powerful brand recognition combined with unmatched systemwide leadership and resources will allow us to capitalize on opportunities that drive long-term value for our shareholders.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Planet Fitness. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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