Planet Fitness (PLNT) is making a major change that it hasn’t made in 26 years, and customers may not be too happy about it. The company announced during a recent earnings call that it will be hiking the price for its cheapest membership by $5 after piloting the change in different markets and hinted that more price increases may be on the way.
“For the past several months, we have had three different groups of stores testing three different prices for our Classic Card membership,” said Planet Fitness Chief Financial Officer Tom Fitzgerald during a May 9 earnings call. “Based on those test results, we have decided to increase the price from $10 to $15 to further enhance the average unit volumes for our stores.”
Related: Planet Fitness partners with major rap artist crowned as ‘Mother Fitness’
The price increase will go into effect this summer and will affect only new members who join after the change takes place. Those who are currently Classic Card members will still be charged $10 monthly for the duration of their membership.
Planet Fitness also indicated during the earnings call that its Black Card membership, which is currently $24.99 a month, may also soon be subject to a price increase.
“We continue to test different promotional strategies, as I believe a good portion of our focus on innovation includes exploring pricing and amenities,” said Craig Benson, interim CEO of Planet Fitness, during the call. “To that end, we'll be starting Black Card price tests around the time the system migrates to the new Classic Card price.”
The company believes that price increases won’t have a “huge impact” on membership cancellations since it only affects new members. During the call, Bensoon also stated that the price increase shouldn’t come as a “shock.”
“We've seen in every industry, people moving price,” said Benson. “So it is not going to come as a shock to anybody that we are moving a price that's been in effect for a long, long time, 25 years.”
Planet Fitness appears to be doing well in the revenue department as its total revenue increased by 11.6% year-over-year, according to its first-quarter earnings report for 2024. But the company is $600 million in debt, which it claims is due by September 2025.
The company is also recovering from the negative effects related to an incident on March 11 at one of its gyms in Alaska where a woman took to social media to reveal that there was a “man in the women’s locker room” who she claimed identified as a woman. She was banned from Planet Fitness after she took a photo of him shaving in the locker room.
“Our gender identity non-discrimination policy states that members and guests may use the gym facilities that best align with their sincere, self-reported gender identity,” said Planet Fitness in a statement to CBS in March. “The member who posted on social media violated our mobile device policy that prohibits taking photos of individuals in the locker room, which resulted in their membership being terminated.”
Related: WeightWatchers makes a controversial move after Oprah’s weight loss revelation
Now, Planet Fitness has revealed that this incident has negatively impacted its membership joins and cancellations as it faced backlash for its nondiscrimination policy.
“Media mentions relating to the incident peaked in the middle of March, which we believe contributes some of the softness we saw in joins for the balance of the month as well as some increase in cancels,” said Benson during the earnings call. “This policy has been in place for more than a decade and is not dissimilar from other industry peers, including longtime brands such as the YMCA.”
More Retail:
- Walgreens limits purchases of a viral candy product
- Target faces disturbing lawsuit for allegedly putting shoppers at risk
- Amazon is giving up on allowing customers this one privilege
Related: Veteran fund manager picks favorite stocks for 2024
