New marketing tactics and a bigger focus on strength training equipment have analysts bullish on Planet Fitness’ future despite some headwinds
Planet Fitness’ strategy under new CEO Colleen Keating is starting to take shape, and at least some analysts are confident the low-price gym giant will be able to reassert its dominance in 2025, buoyed by a revamped marketing plan and a shift to more strength training equipment.
In an equity research report published Friday, analysts from TD Cowen expressed optimism in Planet Fitness’ future under Keating, who took over in April at a pivotal time for the high-value, low-price (HVLP) gym brand.
The analysts said they met with Planet Fitness’ executive team including Keating, chief financial officer Jay Stasz, retiring CFO Tom Fitzgerald, and vice president of investor relations Stacey Caravella, and that the meeting “re-affirmed our confidence” in the gym brand’s stock as a “buy” for 2025.
“We expect changes around marketing, messaging, box lay outs, and franchise economics to reaccelerate openings, members, and comps growth,” the analysts wrote. “Progress will take time, but we expect a better 1Q, and are encouraged by the price transition.”
Keating’s first big move as Planet Fitness CEO came in May, when the HVLP gym giant raised the price of its Classic Card membership from $10 per month to $15, its first price hike in nearly 30 years.
Planet Fitness is still the largest gym chain in the United States with over 2,000 locations and around 20 million members, including a sizable Gen Z contingent. However, the brand is facing increased competition from low-price gyms including Crunch Fitness, EōS Fitness, Chuze Fitness and Vasa Fitness, which have won over a certain portion of the fitness population by offering amenities like group fitness classes, recovery services and premium strength training equipment at price points at or near Planet’s $15/month offering.
Marketing to Gym-Goers
To fend off competition from those brands, Keating has made revamping Planet Fitness’ marketing strategy a top priority. This includes focusing on fitness over fluff, and positioning Planet as a brand for serious gym buffs.
“We’re beginning the shift to communicating the high value of a Planet Fitness membership versus primarily focusing on our low price and using our marketing to demonstrate the breadth of high-quality top-tier equipment in our club,” Keating explained during a Q3 earnings call last month.
TD Cowen analysts noted that Planet Fitness execs are aligned on delivering a marketing message that’s focused on “getting people off the couch” and into the gym. In line with Keating’s comments, the brand will also focus on “dispelling the perception members can’t advance their fitness journey at its gyms,” the analysts wrote.
New marketing tactics include touting the quality of Planet Fitness’ workout equipment, especially its strength training offerings. In a recent social media campaign, the brand compared its dumbbells to those of an “overpriced competitor gym,” noting that both pieces of equipment weigh the same and will get you the same results, but a Planet Fitness membership is cheaper.
Similar marketing initiatives will be implemented this month and over the first quarter of 2025 across social media and on TV, the analysts said. They caution, however, that Planet Fitness is still searching for a new chief marketing officer, who will want to “put their stamp on the business,” so the brand’s marketing strategy could evolve.
Strength Training Shift
To match its new marketing ethos, Planet Fitness is also changing the look and feel inside of its gyms, notably by embracing strength training and cutting down on cardio. TD Cowen analysts noted that the brand is tweaking the layouts of its gym floors to include “a better mix of on-trend equipment.”
According to the report, Planet Fitness gyms around the country are gradually adding more strength training equipment, including free weights, and removing some cardio machines, eyeing a 50/50 split between the two modalities. That move follows industry trends as gym-goers, especially young people and women, flock to strength training.
“This should improve the member experience by increasing equipment relevance and reducing wait times,” the analysts wrote.
In the long term, Planet Fitness execs are also looking to improve franchise economics to drive more gym openings in the years ahead. That includes lowering build-out costs for new gyms by around 10%, making it cheaper for franchisees to buy and maintain equipment, and increasing revenue through the Classic Card price increase, per the TD Cowen report.
Overall, the report is positive on Planet Fitness’ outlook ahead of a pivotal January – the brand’s first with its new $15/month pricing structure. TD Cowen predicts that Planet will add around 1.1 million net members in the first quarter of 2025.
“We expect a strong 1Q, but net member growth could look different from prior years as it will be the first 1Q with a higher price point,” the analysts wrote.
