Planet Fitness’ High School Summer Pass Program Causing Drop in Usage

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Planet Fitness ($NYSE:PLNT) is a chain of fitness clubs with locations across the United States. According to geolocation foot traffic data from Placer, the company saw a decline in usage during September. Club usage for Planet Fitness was noted to have decelerated to 97% of 2019 levels from 122% in August. Bank of America attributed the drop to a loss of traffic from PLNT’s High School Summer Pass, a program that allowed teens a chance to work out for free from May 16 to August 31. The program was launched in an effort to get more teens active and combat obesity, but it appears to have had the opposite effect.

With the school year now in full swing, teens are no longer able to take advantage of the free pass and are instead opting for other activities. This has resulted in a drop in traffic for Planet Fitness, at least in the short term. It remains to be seen if the program will have any long-term effects on the company’s bottom line.

Price History

Planet Fitness’ High School Summer Pass Program Causing Drop in Usage: The program, which offers unlimited access to Planet Fitness locations for high school students, has been credited with driving up membership numbers. However, usage of the passes has been declining in recent months. Planet Fitness stock opened at $61.8 on Thursday and closed at $62.2, up by 0.1% from prior closing price of 62.1.

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Based on the analysis done by the VI app, Planet Fitness is a low risk investment in terms of financial and business aspects. The company’s fundamentals reflect its long term potential. However, the app has detected 2 risk warnings in the income sheet and cashflow statement. Registering on the app would give investors more insights on these risks.

Summary

However, this has caused a drop in usage for the gym chain, as older members are complaining about the influx of teenagers. Despite the complaints, the program seems to be working well for Planet Fitness. The company has seen a surge in new memberships, and many of the teens who are using the summer passes are signing up for long-term memberships once the program ends. There are some drawbacks to the program, however. The biggest one is that it’s causing a lot of older members to cancel their memberships.

This is because the gym is becoming overcrowded and the atmosphere is becoming more juvenile. Overall, the summer pass program is a good way for Planet Fitness to attract new customers. However, the company needs to be aware of the potential negative impact it could have on its older, loyal members.