Planet Fitness, Inc. (NYSE:PLNT) Q3 2019 Earnings Conference Call - Final Transcript

Good evening. My name is Denise, and I'll be your conference operator today. At this time, I would like to welcome everyone to Planet Fitness Third Quarter 2018 Earnings Call. [Operator Closing Remarks] After the speakers' remarks, there will be a question-and-answer session. [Operator Closing Remarks]

I would now like to hand the call over to Brendon Frey. Please go ahead.

Thank you for joining us today to discuss Planet Fitness' third quarter 2019 earnings results.

On today's call are Chris Rondeau, Chief Executive Officer; and Dorvin Lively, President and Chief Financial Officer. A copy of today's press release is available on the Investor Relations section of Planet Fitness' website at planetfitness.com.

I would like to remind you that certain statements we will make in this presentation are forward-looking statements. These forward-looking statements reflect Planet Fitness' judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting Planet Fitness' business. Accordingly, you should not place undue reliance on these forward-looking statements.

For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements included in our third quarter 2019 earnings release, which was furnished to the SEC today on Form 8-K as well as our filings with the SEC referenced in that disclaimer. We do not undertake any obligation to update or alter any forward-looking statements whether as a result of new information, future events or otherwise.

In addition, the company may refer to certain adjusted non-GAAP metrics on this call. Explanation of these metrics can be found in the earnings release filed earlier today.

With that, I'll turn the call over to Chris Rondeau, Chief Executive Officer of Planet Fitness. Chris?

Thank you, Brendon, and thank you everyone for joining us today. We delivered another quarter of solid results highlighted by system-wide same store sales growth of 7.9%, on top of a 9.7% gain a year ago, and adjusted earnings per share of $0.36 versus $0.28 last year, an increase of 29%. The majority of our system-wide sales growth in Q3 approximately 35% was driven by net member growth as casual and first-time gym users continue to be attracted to our brand and welcoming non-intimidating fitness concept.

Compared to the industry, our growth is remarkable. According to IHRSA, the International Health, Racquet & Sportsclub Association, the U.S. fitness industry opened roughly 1,100 new locations and added 1.6 million members in 2018. And that same year, Planet Fitness opened 211 new stores and added 1.8 million members. We accounted for roughly 20% of the industry unit growth and more than 100% of the volume growth.

Taking Planet Fitness out of the industry, the U.S. industry grew by over 800 stores, but membership declined by about 200,000. Reinforcing the other fitness concepts are trading amongst themselves and with new store openings, they are sharing a smaller piece of the