Planet Fitness shares fall as company announces new CEO

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

Craig Benson, who has been serving as interim CEO since the departure of Chris Rondeau in September, will remain on the board of directors.

The announcement comes after months of searching, and some analysts are calling it a positive for the stock, despite shares falling about 3% following the announcement.

Piper Sandler analyst Korinne Wolfmeyer said the news is “the first catalyst of several” for the stock.

“Planet Fitness now has someone who can fully lead the New Growth Model changes, who can instill confidence in potential pricing changes, and can help lay out a plan for the upcoming CFO search,” Wolfmeyer said in a note. “All of which we view as positive drivers of earnings upside and valuation appreciation for PLNT.”

Wolfmeyer rates the stock as overweight with an $80 price target. The stock was trading for roughly $60 a share on Tuesday.

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

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

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 yet solid choice to lead Planet Fitness as it navigates franchisee tensions and a recent social media controversy about the safety of women’s locker rooms in light of Planet’s stated policy to use locker rooms that best align with members’ gender identities,” said William Blair analyst Sharon Zackfia in a note.

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

Keating will also play a significant part in the company’s search for a new chief financial officer. The company’s current CFO, Tom Fitzgerald, announced his retirement in February and will step down 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 fitness club’s board of directors. “We are confident that Colleen is an exceptional leader with the desired skills, experience and culture-first mindset necessary to accelerate Planet Fitness’s next phase of growth.”

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

Planet Fitness will hold its annual general meeting on April 30 and report first-quarter earnings on May 9.

Correction: Planet Fitness will report first-quarter earnings on May 9. A previous version of this story misstated the date.