As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the leisure facilities industry, including Planet Fitness (NYSE:PLNT) and its peers.
Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.
The 12 leisure facilities stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 13.8% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
In light of this news, leisure facilities stocks have held steady with share prices up 3.7% on average since the latest earnings results.
Planet Fitness (NYSE:PLNT)
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE:PLNT) is a gym franchise which caters to casual fitness users by providing a friendly and inclusive atmosphere.Planet Fitness reported revenues of $300.9 million, up 5.1% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
"Since I stepped into the CEO role in June, I have become even more confident and excited about my decision to join such an iconic brand, supported by a strong foundation and team, a solid base of approximately 100 franchisees, and approximately 19.7 million members," said Colleen Keating, Chief Executive Officer.
Interestingly, the stock is up 9.6% since reporting and currently trades at $78.94.
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Best Q2: Life Time (NYSE:LTH)
With over 150 locations and gyms that include saunas and steam rooms, Life Time (NYSE:LTH) is an upscale fitness club emphasizing holistic well-being and fitness.Life Time reported revenues of $667.8 million, up 18.9% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with an impressive beat of analysts’ same-store sales and earnings estimates.
Life Time achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 24% since reporting. It currently trades at $25.80.
Weakest Q2: Vail Resorts (NYSE:MTN)
Founded by two Aspen, Colorado ski patrol guides, Vail Resorts (NYSE:MTN) is a mountain resort company offering luxury experiences in over 30 locations across the globe.Vail Resorts reported revenues of $265.4 million, down 1.6% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a miss of analysts’ skier visits and earnings estimates.
As expected, the stock is down 10.9% since the results and currently trades at $167.37.
European Wax Center (NASDAQ:EWCZ)
Founded by two siblings, European Wax Center (NASDAQ:EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.European Wax Center reported revenues of $59.87 million, up 1.3% year on year. This result lagged analysts' expectations by 2.4%. Taking a step back, it was still a very strong quarter as it produced an impressive beat of analysts’ earnings estimates.
The stock is up 2.9% since reporting and currently trades at $7.13.
Dave & Buster's (NASDAQ:PLAY)
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.Dave & Buster's reported revenues of $557.1 million, up 2.8% year on year. This number met analysts’ expectations. It was a strong quarter as it also produced an impressive beat of analysts’ earnings and operating margin estimates.
The stock is up 20.9% since reporting and currently trades at $36.10.
This content was originally published on Stock Story
