A long-awaited return to the local gym to shed the pandemic pounds appears to be playing out right now either as people get their COVID-19 vaccine or grow tired of sitting at home with the nice weather resuming.
Planet Fitness CEO Chris Rondeau — who leads the largest national gym chain in the country at more than 2,100 locations — tells Yahoo Finance Live he has continued to see sequential improvement in new member signs ups in the first quarter. The pace of cancellations has subsided, too.
"We are really happy we got through the cancellations from last year. Now people are coming back. The cancellations are normal and the joins are picking back up," Rondeau says.
Rondeau says only about 20 Planet Fitness locations are closed, half being in California and the rest in Canada. The remainder of the company's locations are open, but do have limitations on occupancy, ranging from 25% to 75%.
Shares of Planet Fitness rose 2% on Rondeau's comments.
Adds Rondeau, "I think the rest of the year we could see a stronger half than we have ever seen as people get out there and get back to the real world again."
While the largest player in the gym industry, Planet Fitness wasn't immune from the full effects of the pandemic. Its gyms were forced to close at the height of the pandemic, which pressured the company's financials and stock price.
Planet Fitness' sales fell 41% to $406.6 million in 2020. Adjusted net income plunged 97.9% to $3.1 million. The company only opened 130 new locations last year, down from its typical pace of 200 or so a year. Planet Fitness shares rose 2.6% last year, underperforming the S&P 500's 18% gain.
All eyes are now on whether Planet Fitness and its rivals (what's left of them, at least seven gym chains went bust in 2020) could sustain the budding momentum in new sign-ups as COVID-19 infections creep back up across the country.
The U.S. has seen a seven-day average of 60,425 new COVID-19 cases per day compared to mid-50,000s earlier in March, according to Centers for Disease Control and Prevention (CDC) data analyzed by Yahoo Finance. Physicians pin the blame on new variants of COVID-19 and people letting their guard down on the fight against the deadly virus.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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