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Planet Fitness shares fall as company announces new CEO, even as analysts see upside


A portrait of Colleen Keating.

Courtesy of Planet Fitness

Planet Fitness announced Tuesday that Colleen Keating will take over as the fitness club’s new CEO, effective June 10.

Craig Benson, who has served as interim CEO since the departure of Chris Rondeau in September, will remain a member of the board of directors.

The announcement comes after months of research, and some analysts are calling it a positive for the stock, despite a drop of more than 3% following the announcement.

Korinne Wolfmeyer, an analyst at Piper Sandler, said the news was “the first catalyst of several” for the stock.

“Planet Fitness now has someone who can fully lead changes to the new growth model, who can instill confidence in potential pricing changes, and who can help develop a plan for the next CFO search,” said Wolfmeyer in a note. “This we see as a positive driver of earnings growth and PLNT valuation appreciation.”

Wolfmeyer rates the stock overweight with a price target of $80. The stock was trading at around $60 per share on Tuesday.

Keating has 30 years of experience in large-scale operations and franchise management, as well as leadership in global consumer operations in the areas of hospitality, real estate, operations and management franchises.

Since 2020, she has served as CEO of FirstKey Homes. She previously held management positions at InterContinental Hotel Group and Starwood Hotels & Resorts Worldwide Inc.

UCG | Universal Images Group | Getty Images

Keating joins Planet Fitness as the company faces headwinds, including the growing popularity of weight-loss drugs like Ozempic and Wegovy, as well as controversy surrounding its locker room policy.

“We view Keating as an unconventional but strong choice to lead Planet Fitness as he navigates franchisee tensions and a recent social media controversy regarding the security of women’s locker rooms, in light of the stated policy of Planet aiming to use locker rooms that best match members’ gender identity,” Sharon Zackfia, an analyst at William Blair, said in a note.

William Blair has an “outperform” rating on Planet Fitness stock.

Keating will also play a significant role in the company’s search for a new CFO. The company’s current CFO, Tom Fitzgerald, announced his retirement in February and will leave his role on September 1.

“Colleen’s deep operational knowledge, strategic mindset and understanding of large-scale franchise operations and consumer-facing brands made her stand out among the candidates considered,” said Stephen Spinelli, Chairman of the Board of Directors. of the fitness club. “We are confident that Colleen is an exceptional leader with the skills, experience and culture-focused mindset needed to accelerate Planet Fitness’ next phase of growth.”

Planet Fitness shares have fallen about 17% this year and have been volatile since Rondeau announced he would step down after 10 years in the role.

Planet Fitness will hold its annual general meeting on April 30 and release its first quarter results on May 9.

Correction: Planet Fitness will release its first quarter results on May 9. A previous version of this story misstated the date.


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