PLNT Q2 Deep Dive: Black Card Penetration and Member Experience Redefine Growth Path

Inclusive gym franchise company (NYSE:PLNT) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 13.3% year on year to $340.9 million. Its non-GAAP profit of $0.86 per share was 8.7% above analysts’ consensus estimates.

Is now the time to buy PLNT? Find out in our full research report (it’s free).

StockStory’s Take

Planet Fitness reported better-than-expected Q2 results, with management crediting strong Black Card membership growth and higher systemwide same-store sales for the outperformance. CEO Colleen Keating highlighted the company's ongoing focus on expanding its value proposition through strategic marketing campaigns and a more balanced mix of cardio and strength equipment. However, the market's negative response reflected investor concerns about the impact of the nationwide rollout of online cancellation, which led to a modest increase in member attrition. CFO Jay Stasz acknowledged this elevated churn was “slightly higher than initially modeled” but emphasized it was incorporated into the company’s outlook.

Looking ahead, Planet Fitness’s full-year outlook reflects management’s confidence in sustained demand from younger demographics and continued Black Card penetration, though guidance remains cautious due to persistent macroeconomic uncertainty and anticipated normalization of member attrition. Management is monitoring the potential timing for a Black Card price increase, with Keating stating, “We want to take a minute and get on the other side of [the online cancellation rollout] before we make an absolute decision on the timing of the Black Card price increase.” The company’s strategy also includes refining its club format and introducing new amenities to enhance member value and support future unit growth.

Key Insights from Management’s Remarks

Management attributed Q2 performance to growth in high-value membership tiers, ongoing club optimization, and targeted marketing to younger consumers, while addressing operational changes like online cancellation and asset-light expansion.

• Black Card membership momentum: Black Card penetration reached 65.8% of total membership, up over 300 basis points year-on-year. Management attributed this to the perceived value of the $10 price gap between Classic and Black Card tiers, with the latter offering additional amenities and flexibility. The company is evaluating a future price increase for the Black Card but will wait until the impact of online cancellation stabilizes.
• Club format optimization: Over 70% of clubs have transitioned to a more balanced mix of cardio and strength equipment, responding to member preferences for strength training and functional fitness. Keating explained that this shift, including the introduction of more stair climbers and plate-loaded equipment, is resulting in higher club utilization and improved member engagement.
• Targeted Gen Z engagement: Initiatives like the High School Summer Pass, which allows teens free summer access, have led to increased participation and utilization, supporting growth among Gen Z members—the fastest-growing segment. Keating noted, “Utilization and participation are both up markedly this year versus last.”
• Online cancellation rollout: The nationwide introduction of online membership cancellation increased member attrition, especially in the months immediately following rollout. Stasz stated this was “tens of basis points higher than originally thought,” and expects attrition to moderate after approximately 12 weeks based on past pilot programs.
• Asset-light shift and club sale: The sale of eight corporate-owned California clubs to a franchisee supports Planet Fitness’s strategy to remain highly franchised and recycle capital to more densely concentrated regions, aligning with the company’s long-term focus on efficient growth and operational leverage.

Drivers of Future Performance

Planet Fitness expects forward growth to be driven by continued Black Card penetration, club expansion, and engagement with younger members, tempered by macroeconomic uncertainty and near-term churn normalization.

• Black Card price strategy: Management is considering a price increase for the Black Card tier, after first monitoring the attrition impact from the online cancellation rollout. Keating indicated the company will wait for churn to stabilize before implementing changes, aiming to maintain perceived value for both new and existing members.
• Club expansion and format innovation: The company’s growth outlook is supported by plans to open 160-170 new clubs this year and further optimize club formats. Management believes that a balanced mix of strength and cardio equipment, along with reduced build costs and smaller footprints, will improve unit economics and accelerate future growth.
• Gen Z and Gen Alpha focus: Management views the growing health consciousness of Gen Z and the upcoming Gen Alpha demographic as major drivers of long-term membership growth. Programs tailored to these groups, such as the High School Summer Pass, are expected to boost engagement and conversion rates, supporting sustained demand even in a competitive industry landscape.

Catalysts in Upcoming Quarters

Going forward, the StockStory team will watch (1) whether churn rates from the online cancellation rollout return to historic norms, (2) ongoing increases in Black Card penetration and any resulting price adjustments, and (3) the pace of new club openings—particularly as the company tests smaller formats and expands internationally. The impact of Gen Z-focused marketing and the introduction of new amenities will be additional indicators of execution.

Planet Fitness currently trades at $105.62, down from $109.42 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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