Number 196: Wild Ride


Navigating shifts in demand and economic uncertainty, the fitness industry is always on the move.

Today, we break down recent developments, earnings calls and strategic initiatives across the industry.

Highs and lows

After the death of gyms and the gold rush of home workouts, all signs pointed to the return of in-person exercise.

But, while some brick-and-mortar brands are resuming operations, other big names are closing studios. Meanwhile, in the face of declining sales, digital and connected fitness companies have suffered significant layoffs.

Yet despite the ups and downs, the industry as a whole is enjoying a resurgence.

  • By 2025, the global fitness and exercise market will exceed $1.2 billion.
  • Since this June, monthly visits to gyms in the United States exceed foot traffic in 2019.
  • This year, the US boutique studio category is expected to hit $22.1 billion, surpassing pre-pandemic levels.

Gain territory

Planet Fitness. Reaching 16.5 million members, the budget gym chain saw system-wide sales exceed $1 billion in the second quarter.

It should be noted that Gen Z is the fastest growing demographic among Planet Fitness members – 15% of all US school-aged teens are enrolled in its free summer pass program or are paying members.

Outlook: Despite recession-related concerns, CEO Chris Rondeau believes Planet Fitness will thrive, noting that the company added 1.1 million members and doubled its number of locations during the 2007-2009 financial crisis.

Lifetime. Seeing $1.8 billion in revenue in 2022, upscale health club operator Life Time reported growth in memberships and sales in the second quarter.

Continuing its vision of the Athletic Country Club – think gym, pools, sports fields, cafe, etc. – the company invests in new programs, including workouts for members over 55, hires hundreds of personal trainers and gets into pickleball. .

Outlook: Citing the macroeconomic situation, Life Time cut its forecast for the full year and raised prices. But CEO Bahram Akradi remains confident in the company’s ‘healthy living and healthy ageing’ approach.

Xponential Fitness. Entering its eighth consecutive quarter of growth, Xponential reported sales and membership gains in the second quarter.

Through a series of acquisitions, product initiatives and signed franchise deals, the boutique studio franchisor has been able to weather the pandemic, accelerating once restrictions are lifted.

Specifically, the all-access XPASS, digital offering, and the company’s growing B2B efforts have elevated the brand. International expansion, including studios in Australia and New Zealand, will help it reach over 500 new locations this year.

Outlook: According to CEO Anthony Geisler, the economy won’t slow Xpo down. Instead, Geisler said most members have household incomes over $130,000 and “don’t view fitness as a discretionary expense.”

miss the mark

While gyms are bouncing back, the recovery isn’t evenly distributed.

Soul cycle. The indoor cycling chain is closing 19 studios (~25% of its footprint) and laying off 75 employees.

According to CEO Evelyn Webster, customer behavior is changing and passengers have not returned in droves. As a result, some markets, like NYC, were oversaturated, leading to shutdowns.

After withdrawing its IPO bid in 2018, the Equinox-owned company launched its own smart bike the following year. Missing the home-training boom, Webster told Fitt Insider the company doesn’t comment on bike sales.

Outlook: As its parent company pursues a recurring public offering, SoulCycle is moving away from its mid-2000s heyday.

F45 training. Last month, the HIIT studio franchisor cut staff by 45% and saw CEO Adam Gilchrist leave.

Officially, the company has cut 2022 projections for new studio openings, revenue and EBITDA. It also presses the expansion pause and sets aside nascent concepts like FS8. Additionally, franchise development funding was withdrawn.

Outlook: Acting CEO Ben Coates said demand for F45 remains strong, but its stated goal of more than 20,000 studios worldwide seems out of reach at the moment.

Platoon. After changing CEOs, cutting nearly 3,600 jobs, outsourcing manufacturing, closing storefronts and raising the price of its Bike+ and Tread, Peloton’s restructuring isn’t over yet.

Now the company is retrofit your bikes for home assembly and could distribute its content to competing equipment brands.

Outlook: Shifting its focus from high-end hardware to upgradeable content/software, Peloton is distancing itself from the playbook it helped write. Which begs the question: where does connected fitness go from here?

Somewhere else. After lackluster profits, Beachbody and Nautilus are looking for a sustainable path. Similarly, following the layoffs, Tonal, Hydrow, iFIT and others are retooling. For its part, the Italian Technogym is staying the course, with its premium brand and its multi-channel model.

Punch : Jumping off the reopening roller coaster and into volatile economic waters, the fitness industry is still grappling with the fallout of the pandemic era.


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