Inclusive gym franchise company (NYSE: PLNT) announced better-than-expected revenue in Q1 CY2026, with sales up 21.9% year on year to $337.2 million. Its non-GAAP profit of $0.74 per share was 17.6% above analysts’ consensus estimates.

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"In the first quarter, our top and bottom line results exceeded expectations. However, 2026 is off to a slower than expected start from a net member growth perspective as we faced internal and external headwinds during our peak sign-up period. As a result, we are sharpening our marketing to prioritize capturing demand and driving net member growth. Additionally, we are pausing the planned national Black Card price increase pending a broader pricing review," said Colleen Keating, Chief Executive Officer.

Company Overview

Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE: PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Planet Fitness grew its sales at a 28.8% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Planet Fitness’s recent performance shows its demand has slowed as its annualized revenue growth of 12.3% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. Note that COVID hurt Planet Fitness’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.

We can dig further into the company’s revenue dynamics by analyzing its same-store sales, which show how much revenue its established locations generate. Over the last two years, Planet Fitness’s same-store sales averaged 5.5% year-on-year growth. Because this number is lower than its revenue growth, we can see the opening of new locations is boosting the company’s top-line performance.

This quarter, Planet Fitness reported robust year-on-year revenue growth of 21.9%, and its $337.2 million of revenue topped Wall Street estimates by 12.4%.

Looking ahead, sell-side analysts expect revenue to grow 7.5% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Planet Fitness’s operating margin has been trending up over the last 12 months and averaged 29% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports paltry profitability for a consumer discretionary business.

This quarter, Planet Fitness generated an operating margin profit margin of 29.3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Planet Fitness’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q1, Planet Fitness reported adjusted EPS of $0.74, up from $0.59 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Planet Fitness’s full-year EPS of $3.23 to grow 9.8%.

Key Takeaways from Planet Fitness’s Q1 Results

We were impressed by how significantly Planet Fitness blew past analysts’ revenue expectations this quarter. We were also glad its adjusted operating income outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. Investors were likely hoping for more, and shares traded down 22.7% to $49.39 immediately following the results.

Is Planet Fitness an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).