Planet Fitness (PLNT) 7 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 Planet Fitness Earnings Call. [Operator Instructions]. I would now like to turn the call over to Stacy Caravella, Vice President of Investor Relations.

begin. may You

and operator, everyone. Thank good you, morning,

live appointed on Officer, remarks. call Colleen call Also all us our be webcast be They questions is November Officer, session will Executive Chief joining following newly for Stasz, replay. Jay the Fitness' available Planet is effective Keating; will Today's recorded and Fitzgerald. on XX. Speaking Tom today's CFO during and Q&A for Financial Chief prepared the being

Colleen, I'd in Before to the also I over to on during included turn that everyone statements applies made language our like the call. comments call remind release the to forward-looking our earnings

Our of corresponding measures. our on non-GAAP GAAP any financial release measures the be reconciliation their with mentioned found with investor website can on along call

over will Colleen. turn call I the to Now

thank and strength Thank to I'm Call. everyone, morning to our you, QX us talk with this for business. thrilled Fitness Planet for you the and about you, of results Stacy, our the Earnings be speaking here joining quarterly

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making on forward by Chief to encouraged we in brand the the in Officer, providing future. update an our search strategy, Lastly, progress look and a we're for Marketing we're ongoing

on their Planet value walls engagement. Fitness club. membership technology the most enhancing content fitness us members the imperative, second deliver app through to fitness workouts to whether of that want beyond program. wellness know clubs, experience the advantage even journey when using and of experience. or to the opportunity of one members Store. support of Now We the value to drive not downloaded is and This our member X goes that's the PF our We're a they're enhance Planet and to gives on our member Fitness taking Perks discounts great App on app their our doing the in PF

saved to through beyond the Year-to-date, of total a redemption reduce program. enhance value approximately more potentially million discounts an partners have proposition and relevant Perks and with with can Deals average our the per members $XX member help than experience of churn. $X our club

estate. app. implementing that to just significant and and experience on meet imperative, We're modernizing us information of have their updating in This something member collect in So grow as basis. enhancing give and place optimizing our AUVs. to Many way, experiences the in us confident being to PF This system-wide but consumer. sight also further uniform offerings we're today rolling in to enable the feedback a our refining strategic across member be also about what product club feedback format. we our today's value more third consumers our while know franchisees to it about capital our now of our P&Ls clubs. analyze franchisees' we've there's our mindful improve faster a system because standardized always our this of based we're that obligations. of will the not out a we to respond feedback line needs This better way our done to putting on member consumer systems continue potential a offerings experience leads We're will our We're to is

Preserving operating remains our important an aspect model efficient business. of our

consumer showed moved X and cardio clubs reequipped reequips as program of a our span today, for to we This saves franchisees' more based trends in gym. large we the our this of balanced today's new our how we've don't preference strength strength. a We they on a they of standard ago, equipment XXX rolled observed it about need for our and clubs. additional XXXX. footprint from of it's example, equipment on so members while money years another in using did industry pieces to for existing cardio that with roughly member, standard to out becomes a equipment For more relevant as feel cardio strength and well pieces clubs to graduate in new the collaboration builds was and add franchisees, like In making before XX. builds

observed through existing which our clubs or franchisees. full optimize year expectations also address strength drive outlook. wait working QX club, and voluntary in for a our our how to greatly members grab area equipment the our an the of was with the the less exceeded pieces to place Tom space, when will this space open floor. from of X,XXX equipment sales uptake in by guidance. the of XX% clubs This than what some need a and the provides to included in we club other our do their our additional move franchisees in our equipment The club cardio have by up workout opt-in will and up the year speaking visiting places at the of area frees managers. within on floor than work out to end We're removing More this clubs allowing additional equipment floor beyond impacts space utilized in more will XX-minute

able format quickly any we to to cost This example pivot were a of make is franchisees. not our does a great add that optimization

Finally, is growth. imperative fourth accelerating club new our

sight the We to we economics have everything responsibility a put do. in club line of

line is goal while system Our on top and the cost to turn to up reduced enhancing bottom the drive growth. enable capital the line afterburners to our

already critical strong the card the enhance classic pieces what place two growth joined returns. level Fitness, were to and new club price. were model Planet to Before I in decision increase The

that new important from the first growth QX were also Clubs discussing QX benefits had to in been cost several price underwent that it's this opened built were replacement the quarters an now, and that see we've note or QX cycle increase. model for equipment the While added the the to benefit of initiative. clubs in

While build for meaningful continuing cost ways the we look our club to franchisees. are new changes, enhance to reduce economics the these are to further for

opportunity Looking we ahead, both to across existing the new a have domestically markets tremendous grow country. and in

opportunity. Our for footprint target XX,XXX same on work Fitness. for further is populated less to square U.S. Planet locations the traditional primarily X,XXX our of continue long-term At clubs which areas, our in foot domestic time, smaller the infill would on and based clubs we

achieve in and to We grow scale, can also have density we strategic markets leadership. where market plans internationally

our to search in and about we're making appropriate. newer continue presence updates will progress Australia. markets Mexico, provide We're Officer such a Chief excited as in our will build also when and the We Development Spain for

our In positioning some an closing, Planet during to there our our recent laid the Fitness. marketing redefine showed and plans to brand works at out and joins. in with growth palpable of brand drive peak was We for promise enthusiasm early the franchisee continued conference,

We experience and tech some enhancements including our for member of to mindful to initiatives tools and today's offering stay churn, being also enhance horizon, product costs. build relevant and reduce the cool we on while commitment our our member reiterated refining shared to

our system spirit excitement the our progress and across on in updates and by forward look discussing to our of outlook our invigorated February. on call are XXXX We

Tom. Now over to it I will turn

Thanks, Colleen.

model Before address I franchise I'd flow. to ability get like results, our free its the to significant our third quarter cash and to asset-light generate power of

to QX. XXXX, million leverage enhance best Our quarter, completed agreement of we can to model shareholder have our following $X.X balance we the sheet via than in that billion enables continuously Since million returned recently, cash $XXX debt assess shareholders us and we more during to into entered how share securitized we use the repurchase repurchases. share our a $XXX Most our transaction accelerated value.

Today, fixed our continue We model the At the rate sets place. $XXX where net leverage debt enhance authorization We take franchise growth went ASR share the economics value. ratio into the about agreement, we up new repurchase billion and believe last our of a five securitized blended of strong is million year of of was X.Xx of conclusion it club rate have to X.X%. us despite at to a our debt $X.X advantage upside. tranches of combination asset-light long-term of opportunities and approximately shareholder

our to results. quarter third Now

and All otherwise our unless noted. of comparing my to will QX performance regarding QX XXXX year, last be quarter comments of

club being to our rate opened membership X.X% are increased club the balance sales Card member third We XX. QX compared new net with X.X%. XX.X%. corporate X.X% We clubs was Approximately same quarter. same growth. XX members delivered by of XX% club Black of driven X.X% comp same compared and system-wide our Franchisee growth growth increase in sales sales to the increased of

noted QX in better than from price Colleen expected slightly to classic of our $XX what consistent we with in the June. increasing As late $XX after earlier, are results and card the

testing Our expectations our across several extensive of were on increase the markets. based price

year. given in of a not growth Now net of typically, any third quarter the member there's lot

membership in and in With the Black classic on than the expected decline a QX, by card card more classic rate we Card higher offset slight June, price increase was mix. improvement in which

was The million royalties, total compared primarily segments. segment increases national quarter, revenue franchise $XXX.X and in was ad revenue. growth in fund driven and the due X.X% corporate-owned franchise the new revenue million. was across revenue increase clubs increase third The to by to $XXX.X For

club revenue average For new the Equipment driven third sales XX.X% the and fees was was quarter, X.X%. well club from as clubs. annual increase royalty The corporate-owned growth as in rate X.X%, up primarily X.X%. by in segment revenue same decreased other segment

more was club as franchise to due versus primarily well equipment cardio. which sales to strength driven new placements new equipment shift revenue e-owned clubs, was to The lower as the from decrease fewer by

last on overall As quarter, club we shift noted per a the down basis. in equipment brings sales equipment the mix the

reminder, XX a to completed neutral. last dollars we We XX this as new Now profit quarter club our compared year. are placements keeping

for of replacement quarter, the XX%. equipment to For compared equipment XX% total accounted revenue

primarily to revenue, to of cost Our decrease million $XX.X which relates XX%. million, equipment cost the $XX.X sales of clubs was compared franchisee-owned to a of

shift $X.X million to $XX.X was to million. the rate SG&A to million National for was XX.X% $XX.X I $X.X was XX.X%. compared mix described. Net quarter EBITDA margin for net Cost club revenue, million, revenue advertising than EBITDA at increased $XX.X included million $X.XX. adjusted expense income million, decreased Adjusted million was segment expenses. operation fund compared higher just which million. CEO and Adjusted adjustment income Club per expenses SG&A compared to $XX.X equipment million. $XX.X $XXX.X of transition-related which $XX.X million, the $XX.X our million adjusted adjusted $XXX.X $XX.X million was was relates adjusted transition-related share was due margin a million $XX.X a net million diluted EBITDA income with expenses, of was and to compared from $XX.X to which to corporate-owned for primarily CEO includes

EBITDA franchise million, Equipment million, XX.X%. and margin $XX.X adjusted segment, EBITDA margin XX%. Corporate and By $XX.X club was EBITDA was EBITDA adjusted adjusted XX.X%. million, EBITDA was EBITDA margin adjusted was $XX.X adjusted and adjusted was was The

to the turning balance sheet. Now

in restricted of shares period. retired the of we of compared XXXX, $XX.X QX securities XX, year-to-date retired $XXX.X December which September and $X As approximately total cash, respectively, each approximately million settlement final cash, included XXXX, ASR. upon the XX, million $XX.X $XXX.X on XXXX, equivalents marketable In and of million cash of million million we in had to total

Finally, our XXX growth as as We're placements our XXX club between well outlook between targets for franchise clubs. in to corporate both and and new XXX XXXX. clips, new continue locations reiterating includes equipment and and which new expect franchise XXX

discuss months X% for our range With the same remaining Now tightening outlook X only to X% I'll X%. sales in revisions. to year, from to we're our growth club X%

as of QX. are franchisees clubs that placing additional strength purchased noted, equipment Colleen pieces during in Keating Now our we

million additional in quarter revenue fourth expect result. to We approximately the our $XX Equipment as a an segment

EBITDA sales XXXX, to the to X%. previously the reequipped net investments the of QX couple grow X% Adjusted SG&A. Additionally, repurchased flow to to shares shares XX% in our revenue this grow the from to million, up for of for in share to inclusive to adjusted approximately X% X% on XX.X based a to diluted the year. from growth represent in successful over adjusted X%, drives grow XXXX and adjusted set percentage part the the in X% make X% up the in results. decision through XX% range, made X% We've to and range, from the which will weighted a which X% to income was as range, up X%, of ourselves of increase approximately per earnings from XX% X% outstanding ASR will segment equipment X% range, targets agreement. expect average to X%. X% to to up and of also diluted the following up we to Therefore, revenue now fiscal that full year

financing with our of expect expense XXXX costs debt transaction. interest write-off of associated to continue refinancing also We the million, $XX deferred approximately net excluding

be we up D&A approximately expect approximately XX%. to XX% Lastly, CapEx now to and be up

also and over CFO been these interactions miss think your I've investors calls to analysts alongside all analysts a Finally, good. career shareholders but much will work can't Planet of for I to and to brand here. our has X I with so but that as better and a working thank well, end does privilege my way team. dedicated of Fitness the passionate with at such than It and so a does I'd who the a my like interacted years and serve

that a see years are here believe I'm and the as for come. for to value excited more stakeholders to and now I'm working we've I the the from on, and call to the I'll shareholders, which done Colleen all proud of to results Colleen. franchisees back the will team our even our work team the initiatives turn create growth value deliver for

me to XXXX. search entire the of his we been for he joined Planet Club. I'll team, to Tom his behalf Tom smooth am turn has all up thank extending to company to the and ensure since joins and the the call every and operator retirement is Tom best a as process On incredibly in day Fitness wish joining a back him Planet Saturday date now the appreciative remaining want CFO company, the partner I open to since to and with transition. Fitness I great for it the contributions as working the I Q&A. of Jay dedication for throughout

[Operator Instructions].

the of BMO Our Siegel first with line Simeon question from comes Capital Markets.

Congrats nice on Really Welcome, to the Jay. momentum. ongoing see.

forward the then you then willing you. thanks to then, And in the Any percentage Card. you classic much. perhaps too just for hope on I on opportunity price Looking Maybe the Colleen. see hear wishes any on to look maybe color broader what further to card gym opportunity And chapter. can to your there adds again customer Black next currently working at returning about us can potential gross members. might as you and the members. Great are members, then the impact reactivated sending everything franchisee on share of speak miss you'd Tom, share higher the lapsed maybe be with also don't to you best response just you color and

members. members. past X% were quarter -- members build was and about the returning more bit returning typically X/X we Planet differentiated Yes. think this is our back had I'll and experience see provide second a the former higher. joins invite do proportion members. such on This why quarter and of We opportunity? that of And our the kind about I start that continue our that with joints of to at returning We see of unique see our welcoming think a we offering members Again, high them we was, rejoining. we the market and to past

remarks, quite my members attractive in goers format in other member to our that evolving of or we're that focused the clubs past. folks who and also we're making so been to touched I on have returning clubs experience sure gym And our who've we're and

I So for new then $XX the our just new was accretive it point threshold. again, see when mark increase And franchisees new AUVs timing response before price a at mentioned, we openings not members existing from that's to Again, our years an greater pricing our clubs XX today we quarter represents their of quite to And momentum. I to majority minimum years as my our opportunity and adjust the from have we as as than us price and in [indiscernible]. even ago. our a $XX XX-month the front the price response think, of of remarks, joints favorable more established that mentioned at thought quarter was that an the next yet for kind the than see And in supportive, quite and not club value I market to franchisees. we right and ago, been the has I'll QX, XX give part was highest of pricing into join kind we the strong get seed

comes Your Blair. the question William Sharon next Zackfia from of line with

referred Tom. was the can't or I it to to. vacation follow up, And club never-ending to the wanted whatever way, I going by guess I wait

is a Saturday. day Every

that Every is I a wait put Saturday, on LinkedIn. can't to

to year-over-year. big that jump. So in investments SG&A talked those as quantify the some for what to on a more you're fourth seeing get think And in the guidance quarter, 'XX? obviously, be investments fourth really There's you I growth got SG&A, to towards about increase that in new of revenue quarter? kind looking you Can the on are

Yes, add. will maybe start and I'll Colleen

focused QX. marketing as the investments she's don't position here the guidance. the had since behind IT that we of that the of what know, brand, discussed make So give brand's we to some well to has strong he looked Colleen We that as as arrived, quarterly is, But set Sharon, some on strategic you activity into to we the I really in say evolving would that team sure lot wanted initiatives be a and year. a investing were as up XXXX coming at

So we to a conservative as prudent how term think term. I we thought where might the touch given but it terms make well about wanted of long about were it, and we was were sure the we in I thought near be thinking

And spend? to for element is an there that SG&A the anything incremental efforts is stimulate franchise Or not of development? there

of member the than you growth other with No, always helps aspect it, as know.

And next the question with Baird. Komp comes from line Jonathan of

it's Colleen, mentioned. quickly so system the you on and move the of the see to equipment interesting equipment shift strength the

we should especially on more Just time or line could what priorities think expect, the other as about you coming up QX around about strategic you a little bit or period the laid marketing. out, you all-important maybe phasing talk

more phasing of context some any of around Just initiatives? other the

Yes.

and testing think for a marketing already work the it stretch some lot YPF drives And relates and through messaging and to bringing a important messaging. lot the customer of we're calling also help home will consumer coming of that data down to marketing, that of join. messaging, and we compelling brand QX. the think to marketing inform know we're balance with I we're positioning launch the is positioning, with brand of new strike the we'll positioning our that we've bit as our that marrying a brand and developing brand We've and which I of started and used the on insights creative that

call YPF that So we now.

and highlighting format, that and while we evolution marketing of in that our the in positioning communicated brand offer messaging. also making mix sure well the communication from both and price also use we'll that's So our the value strength the

touched a right excellent say progress making roles candidates. the Blue I an on say recruitment heavily team, I'd the there. Blue got really the on we're in couple that's of CMO the making I'd it, all and So building of Ribbon team, I strong of sure that we've new I'm very it the sure slates of have Ribbon and the We're making urgency. and underpinning team, leaning our CDO. call

So you now And are the that's me talk a and the already execution that on things focus between about heard year-end. experience. member affecting

franchisees. remarks, So the received way member getting it economic plan as unit in from experience standpoint about of that and that been ability a really the as franchisees being mentioned to culminate in increasing support the joins, experience quite our the our optimization, enhancing, format favorable I are accretive encouraging. accelerate those again, in also really that for economics, from -- to an accelerated has standpoint optimization, membership a growth. delivering growth, that's right, And the endeavor And things and and that my I in mindful floor also our enhancing that's driving think, franchisee operating member we've it's cost

on forward That's to look great. We'll progress fronts. those

need Just about one last an talk follow-up short-term visibility looks just maybe in year. bit pace then on units. around opening Could QX little you a the QX, like you it from of the uptick

directional XXXX on system, confidence given are given then to too the international. for economics it's the other here. as up we opening new morale on any of But know given that just floor forward? pace the I or early there. openings the So we And think visibility that initiatives, is understand the and look Should builds just color

Tom. it's that. John, I'll take

last north XXX. We've done So were in in well was it QX, it more right, than done we've but below historically. it back what than of we is XXXX, to more think of still I year you're weighted was QX, terms

this bit for the that. openings implied year. point, But So we from a your is it's little that up to still last year have below

reaffirming confident what feel to good And we said team XXXX And why wanting understand the would means our we we felt lands with it where in terms a where we that about you're that's appreciate rigorously of be. I floor. franchisees. So tracks that and being

we growth as unit about come we've in of all new terms in around beyond, I create -- domestically classic well the growth months the to to and our ends we'll we in growth, But the certainly think, on momentum Colleen the accelerate internationally. as we'll in have new and XXXX that the XXXX card strategic feel whether certainly place to to model call. that that the elements Jay, units, next the but that, last number Colleen place and the get put we and up new to what in of initiatives activity all place here pricing well in XX think put right good both being we

with And your Krotthapalli from line Rahul next JPMorgan. question of the comes

detailed than question. have the Tom, a I for miss think. And definitely update you X-part Thanks more you Colleen would I'll Keating.

think taking came more lot retail the were seen The store are first is advantage accelerate And I of one system's like to on this year? used a than a to ability the boxes, supply of recently follow-up. and gym? you store closures directionally have of supply market, almost that see X,XXX be franchises for how into this give can for Planet Fitness any will repurposing more into the I if next a us openings confidence And

Yes. build I'll that. and maybe can on start, Tom

are for and and to there said there'll work recent opportunity read north I Planet a that be that an And partnership do of I think see this study closures our with Fitness year, in closures you're franchisees. last about we year. as X,XXX X,XXX right.

team on opportunity new to a develop there's estate of where real club. with brokers partnering may have to an availability on to sight and line Our be becoming regular available with then our space basis that a very is engaged where franchisees

you're and So we're I on, seeing market specific. know the think same We trends. spot that's

other even about every to and a thing, our resilience the about market, it periods but the COVID for our you for the lot global talked municipalities some clubs have really a of a in did think flows. once-in-a-lifetime closed closure through and coming an of where pandemic, of It's for is reasons. coming bit, our not were and have think business it in we've online extended of permanent about one talk cash more durability but during little opportunity club space When there's financial we I time, not

us to make to available. very resilience when landlords our I developers fulfill and our and attractive the because speaks to think terms. that their absolutely of confidence lease in of becomes ability space should business

a that see certainly we tailwind. as So potential

franchisees? the you what this activated on some we seen rolled the the have should you of rolling we And across how the feature the percentage past the recently. given think new out we California and clubs click-to-cancel And Perfect. follow-up remind states Can saw before. have today with is in guys trends churn FTC, the some us of of about trends the and Tennessee update

Tom and start maybe if then I'll Yes, can on build it.

initial today, in our where in of them. it in of is year. is available seen membership we've clubs clubs -- that, the across -- have they cases, to XX% corporate roughly our So is generally a rather. about all place And there's cancel to in have where or small and click-to-cancel click available estate, had have a spike What churn a there's some geographies for

the churn rate. to to corporate churn churn to There had the do the that. of XX. particularly one in really remained most of cancel for elevated. that it's the as said, state returned rate again, That's to place that's about exception of And click want clubs, Tom, our again, and normal But -- estate. you Tennessee, one rate then state they've where is has a across anything? normal back moderates I to And out in However, add we've year. moderated

I that's right. think No,

question line Stanley. the And Megan from of your Morgan with comes Clapp next

a you, Tom, question again, everyone everything. And for And said as maybe Tom. thanks, for

that franchisees I to up guide. revenue change think in take comp seem the that this seeing extra mostly here. did by does forward you're also you that But pull be the equipment guide driven maybe

could this the churn? Is if and it about card understand see penetration. comp. of driving on relates you outlook there for puts I there's just to as wanted and lot it I talk price it and a there's elasticity better the lot black what the going more drivers the what's seeing kind of following So year. a increase, Is better to been takes you're

hoping could better bit your you coming was on than outlook. just I as a So to comp the expectations what's maybe finer a give in point

thing. sure Yes,

Megan, franchisees investment and will forward. an and you're as forward, our And going equipment really part it an So made right. incremental become wasn't it was that pull of the standard package

put So they to said quite and the all-important signal strategic pieces these that our saw aligned the to quickly that and move pretty as for are that to some part more equipment QX. we're Colleen have as of encouraged, they mix of strength with

in we lion's So the that of revenue -- uptick terms right, of you're is and the share outlook. the

club the of call sales, our to end we the terms high same for tightened range in discussed remarks. In on prepared the that reasons the that we

But we about QX. saw have the get it say suffice now saw in testing. experienced testing to of acquisition the -- favorable to testing what and quarter that think side we was a and too I so also in we But don't I specific was when what elements the what here we to speak, we in saw we think little compared that than first the and Card our as stronger saw the Black we mix what in in of talk testing,

was the So and of to year, share on -- improvement us was that's allow the but lion's tighten the to for the piece. side the revenue piece but bigger the guide, really equipment a component full acquisition the

on I a churn is historically, you're black obviously And Card or cards. that flow-through for Card that penetration you've maybe card obviously Black Okay. bigger drive about better great in franchisees. talked uptick seeing white than seeing Black higher But think better is members what the you're picture, penetration

going are think talking members to that? mid-single-digit about And maybe on higher that drive you you're does Black play forward uptick I related when I into the retention to initiatives that? like guess better you churn to and the So low how guess Card how about, model about Card thinking in Black

Yes.

line I classic in few that our Card recent I've There's -- our no attrition for virtually card the attrition with in very rate. rate -- history Black years been So last here, history the difference. is

the line card price classic remained attrition speaks back I the the when in increases -- despite card classic and -- with was So think $XX. has the to that that we've taken,

online, sign way at and people for value the quite more And lions, are to online signing Black though that we've of a active this, And it's signing $XX support with the dollars higher-priced price about use so -- historically, people were our that XX when seen of for than XX vast heard I up and and now testament talked advertise keep up are still but the -- Megan, even go you've now the Card, about Card. majority using out they the marketing lions to phrase, classic value probably XX. XX, $XX.XX. the they probably plus we up more now we to different a But be used thought taking talk get us Black I'll had at they're when card X

that of it's card. Card of the such So it line very value elements to the encouraging think with membership that amenities really creates and its a class Black in retains all much

Your next Heinbockel of question John Partners. comes line with Gugenheim from the

bridging rates in the you to if more visits to about don't clubs of couch think brand Colleen, you talk engagement, people. And capacity sort know sort right, get of the Maybe increase somewhere you members. else. times. experienced more go between then particularly do how you're off the wanted per the maybe person, to busiest going start message, in Were joins fitness with of churn about right, and I serious guys new seeing that. more

Yes.

speak and marketing the first, in So club. capacity I'll the think I messaging to talk then I'll to of kind

months in consumer the inform over help we've several I first-time doing that of told the we a goer, the us brand messaging our we testing still to think the same been gym club brand tremendous we the had opportunity At no first-time our some a promise, see environment in to of an shift welcome of last goer testing that mix. gymtimidation. opportunity kind time, to consumer

So lunks. endeavoring be for again, a we're club not to it's -- -- we're still

we on today. of meet broad think is endeavoring fitness a a journey. of their different bit base XX% they're that the And needs at members We the wherever to are

news look gym and joins and as are kind We and their the millennials the can't something Zs of fitness about health part they've lifestyle. know that well-being, and our Gen to strength. have go grown a You parents of up importance proportion reading at without feed the of largest their of

base. the equipment about consumer XX% is attractive be in today. fitness to wellness bit want a to educated the So sure broader more to that of format the the mix and is us enabling make and that club we and

shift even we're how members the and relates with are in clubs, spending it better in things I've our one talking we our to achieve to of clubs is capacity of circuit to in our optimization inside as the workout clubs. utilizing think capacity, managers our build opening I then at And looking understanding our club that that of up and floor in things XX-minute looking one that's I our with the time experienced format space spoke achieve and the the with for that the with instance, today's enabling complement they're member in, increasing strength to

So we optimization. format capacity think our with we're building

might the club. we X,XXX members in -- add so. to given members John. pre-COVID, about period, over in or a on that XX-day today, came club And Yes. And I and XX% any use per -- had about of have that, we just the those did

our across XX% come Now who have country, of times. They a XX,XXX clubs in a the often Xx, well a clubs we including them. quite in that you the have some we period. little a in But of few XX-day folks X-plus more over know, have it members use as corporate

club -- alleviate some capacity Club still and corporate to the issue. franchisee or build to gets a to needs XX,XXX, they're another about once So it

on still, not there's even the across and early a of peak capacity lot system. our particularly macro the part, week where QX, is a of for periods there's of during in the part issue the average, room So -- most

and utilization Pass, even was utilization don't was month clubs but of I and XX% it is most month it approach really School done, March, Summer in was High peak peak there a capacity. March think of study around available the

see on headroom got capacity. So generally, we we've

test, there And in black until -- has the was it increase to now? white worked card think card or then through you the its way keep the pricing Card kind to fair still the Black system Tesla. want Is I follow-up of it quick right? it's say

based What John. to plays today. card we've that the in of $XX. We'd Yes, with see classic sit run we we'd period growth that now to at through where like it membership told on is out franchisees important run in how like that the test the price to QX

-- to QX as with our it run in test, often. factor they is So and I to you let through important think, or longer, know, run it

doing. that's we're what So

Raymond your question James. from of Joe Altobello And next the with comes line

be. might I looking and you did answered, asked that about might have and want club Colleen, you're ask impactful guys wasn't additional think, you those reduce I of the for I cost, Are contemplating that? to for mentioned ways build sure most any franchisees. model economic So to other but changes been to how

increase. Yes. it. is the I'll can on class One, on course, Tom a and build touch it, We've made of price of changes. card of couple

However, new the longer strength. by shift life with growth on the we model, cardio the reducing from strength, anticipated reduction about is cycle longer cardio in strength fact build equipment the in cardio equipment, mix with of for and reequip life cost to The both about XX%. equipment cycle that XX% the of the

we're unit look denigration experience. cost, reduce accretive time, economics. ways All we can build any club the at front-end the the same At the to in of are without member those the cost to continuing of

We desk. a desk front continuing than most front of format signing we're need joins for a accommodate that got we've people now More to at online the to are are format, of desk at our example, desk don't smaller XX% look online. front up big front joins today. our So

So that example. reduces cost, no the denigration about experience. but one member is it to That's

costs build-out continuing at our ways to franchisees. to to find look So enhance for economics the

because from have transactions to our in model the in is invest think attractive. the I where are franchisees system in testament returns Joe, to And the the are other we outside coming people still

So affected.

Absolutely.

versus a follow little insight up and higher time of how went done plastic sales expectations bit October versus card? us of the give sale. around this Could given that, that into year a Just the you you've maybe on other mentioned you

our our take sales. It's Yes, I'll go lot the into combined. in Joe. it's don't is comments it just of typically -- keeping we in that, the because a quarter on we're detail quarter, given But

Cowen. and next with of line Max TD Rakhlenko question from comes your the

come ICR, us Tom, Congrats January. join on at you're to want if in quarter. always welcome you the nice And

you, All Max. right. Thank

just think the about remind and members? terms the looks Card what outlook gen to modeling You in conservative price then that think do you the well? we increase, us now? Class of you is you And low how should But go can how about one last of as split separately, talk waterfall for with when like from just between new And price mix just that question. mid-single-digit lift the

Yes.

the low we the based we testing digits. to mid-single ball Maksi, ran, So on called the

and classic And in does -- terms actual some of Black Card. mix of existing by card club that impacted the the of is

you Black higher be it's a going from coming in Black in you're Card. mix If place relatively Card if to low than have mix, different a

sort our the improve in we've COVID, clubs of rearview it the I that has COVID in is, vary worst as So of And ramps the or we as in continued of it think mirror. does new said, to there. COVID see is -- the the through further is years

sort we're of year of in So comps. in back It's first the the XX-plus that range. percent

to put base mid-single it And of in we to in after digits after then low -- sort it's after and comp so mid-teens the that. XX digits it's mid-single months. and Then that, then low then

way close. similar what the pretty it back was very darn quite had to So we before, but seen not to all where

-- And franchise XX% or there to is are That's should higher? guys about? how gravitate then right you Or cams it. we is about a just between mix lower helpful. thinking the and corporate Got the that mix preference potentially still think quickly,

Yes.

of one there. a us franchisee it. ahead it's I spot would of we or for ICR. like changed. gets other the do development clubs small on we and like or given tuck-in get think few or XX% sweet based X% in could may That the development, invite OE-bag the if how probably I hasn't is appreciate an one. on acquisition here We or see XX%, if heard or minus, Max, the get that, XX%, to plus our I a rid year, but thinking and any say you've our and move, I still that

line of with Konik comes question Your Randy from next Jefferies. the

car about you mean, price that? across I the to a you you did at so a all? your of wanted taking earnings the Have reduction, got white Netflix we all lot I I but have had get I on contemplated to a the XX it's the that like call Have of board, kind thoughts Have guys thought on of late about little apologize does. here, you morning. type policy. a membership any of thought just contemplated bit that And much. not pricing that this

start If of years. I'll an paying And joins different, And for the and we $XX. card And that's that's and a somebody of been decided the is important always we somebody has in thought that, has -- to element case a positive. that. us. Randy, it's with think few and up. us the we for we have to us $XX.XX. that not get how sustainability sales price as if That's the want classic we've rate still And think and time. Card we members, who in to had we don't that when game, it therefore, to we over think the and want with paying about them their are take club people We volume Black We're game the growth. same comes think remain

practice we I important think think we credit the get we But to where have been value last our it of on the an our have do provide. that lifelong. and more something yet over And another mean members, So some for up that for because can has growth important have is that's recently -- do our the element price flexibility past agreements component to doesn't but more think that we take more the it is years. to that we

kind guess I last here upon aspirations. international And of is the follow-up just it. Got again just expanding

more Like of Just more look you would how few about X be than here could country more global it? what's in Canada what next be Europe at beyond those story and kind of country spoke fourth already think like et expand markets out biggest years third cetera? Australia we you biggest is I do as in in those been think Mexico, markets, the why what built can and -- the of the kind that the others be to Spain, about or X there quickly? pressing

I'll that, start Randy. Yes.

how membership the when orders you've It's heard magnitude us or we So well levels the new about greater probably Mexico in they we say, Canada. done good I are think open in translates. club The than model feel U.S. of a in

don't importantly, incredible we either It's reason value. model. lot because it's of or people too it So in an access because resonates think a is locations, more it's -- countries And there's the these is the the have why price applications a simple high. no just

whether new -- it's new little little. I've we or the are what And there's successful you alter are but the to because are different, and follow the not around -- entry different, a apparel the something, food styles been country, a and to based a so tweak the probably other we it's them are pallets fits or where lot more different, very make bit model into And brands, country on brand, different. like see tastes

not. For us, it's

time matter You're on. same you're the going no you're continent a on treadmill to That zone treadmill. is or run what what in

we brands people that really model for bring country part, the and in in we've in ability those have think, most that into the to market. seen a entered. it's we've that already do the people countries are the So we market, serve And to They're translates who trying not well. every

us. So that's what's about it for exciting

we over that countries want have the are a we brand and meaningful think Australia Canada progress, as They footprint measure out impact we big and can think I countries and pace time. our now Spain. our but Mexico like to build to in

over like I Colleen the turn the would back to time, this At call Keating. CEO, to

delivering enter next opportunity on more proposition economic thank even Planet you, enthusiasm of we for shared members so Franchise the boosting you to us today. your the Fitness. value our growth. ultimately for your chapter for everyone, value for our shareholders. We're our all excited and this stakeholders. and Thank lead joining as for I'm thoughtful Well, questions focused is, for brand

conference call. This concludes today's

may disconnect. now You