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Planet Fitness (NYSE:PLNT) moved higher in afternoon trading on Tuesday after Baird tipped that the gym club operator is expanding a pricing pilot to multiple states. Earlier this summer, Planet Fitness (PLNT) began testing a $15 per month no-commitment/White Card everyday pricing plan, while keeping a $10 per month plan with a 12-month commitment in place.
Analyst Jonathan Komp said the firm was encouraged by the expansion of the pilot and thinks PLNT is unlikely to be undercut by competitors. A strategic pricing action on a large scale is seen as a meaningful lever to raise confidence in Planet Fitness’ 2024-2025 unit development forecast and the Outperform-rated stock in general.
During PLNT’s recent earnings call (transcript), Chief Financial Officer Tom Fitzgerald said the gym club giant is looking at ways to capture more of the $15 per month pricing during the non-promotional periods, but still have a $10 price during the sale period. Crucially, the exercise chain still feels “really good” about demand despite the macroeconomic backdrop.
Shares of Planet Fitness (PLNT) were up 1.80% at 2:05 p.m. The stock is down more than 20% on a year-to-date basis, despite showing strong revenue growth.