Can PLNT's Buybacks Sustain Higher EPS Growth Despite Margin Pressure?

Planet Fitness, Inc. PLNT raised its 2026 adjusted earnings per share growth outlook to approximately 6% from 4% after share repurchases reduced the expected share count.

The revision improves the per-share picture even as adjusted net income expectations weakened. That split makes the durability of buyback-driven EPS growth central to the investment debate.

PLNT Raises Its 2026 EPS Growth Outlook

Management now expects adjusted net income per share to grow approximately 6% in 2026, up from 4%. The revised view assumes adjusted diluted weighted-average shares outstanding of approximately 77 million, down from 79 million previously.

The change reflects the lower share count rather than a stronger adjusted net income forecast. Higher interest expense is partly offsetting the benefit, so the improved per-share outlook does not signal a comparable improvement in total earnings.

Planet Fitness, Inc. Price and Consensus

Planet Fitness, Inc. price-consensus-chart | Planet Fitness, Inc. Quote

Planet Fitness Buybacks Lower the Share Count

Planet Fitness repurchased and retired approximately 4 million Class A shares for $200 million in the second quarter at an average price of $50.44. Year-to-date repurchases reached $250 million.

Another $250 million remained under the $500 million authorization. That leaves room for additional repurchases, although future activity must fit alongside other cash needs.

PLNT's Net Income Outlook Still Weakens

Adjusted net income is now expected to decline approximately 3% in 2026, versus the prior expectation for a 2% decrease. Management still projects revenue growth of approximately 7% and adjusted EBITDA growth of approximately 6%.

The second quarter showed a similar gap. Adjusted EBITDA increased 3.5% to $152.8 million, while adjusted net income fell to $68.4 million from $72.6 million a year earlier. Per-share accretion is therefore doing more work than total adjusted earnings growth.

Planet Fitness Margins Show the Earnings Trade-Off

Adjusted EBITDA margin narrowed to 41.8% from 43.3% in the second quarter. Franchise margin fell to 67.6% from 72.3%, corporate-owned club margin slipped to 40% from 40.7% and equipment margin declined to 28.4% from 32.1%.

Interest expense rose to $33.4 million from $26.2 million. Full-year interest expense is now expected to be approximately $115 million, up $4 million from prior guidance after PLNT used a $75 million variable funding note draw alongside cash on hand for repurchases.

Life Time Group Holdings, Inc. LTH reported second-quarter revenue growth of 13.7% and adjusted EBITDA growth of 16.8%, showing stronger operating expansion elsewhere in fitness. Xponential Fitness, Inc. XPOF reported a 13% revenue decline and a 22% adjusted EBITDA decrease, illustrating the industry's uneven earnings backdrop.

PLNT's Cash Flow Must Support Competing Priorities

Net cash provided by operating activities increased to $193.4 million in the first half of 2026 from $177.9 million a year earlier. Cash, restricted cash and marketable securities totaled $544.4 million at June 30.

Planet Fitness still expects 180-190 system-wide club openings and 150-160 equipment placements in 2026, with much of the remaining activity weighted toward the fourth quarter. It also plans to repay the $75 million variable funding note by year-end.

Planet Fitness Signals Keep Expectations Measured

Buybacks can continue to support earnings per share if PLNT keeps reducing its share count, but weaker adjusted net income, narrower margins and higher financing costs make the quality of that growth mixed. The key issue is whether operating earnings can eventually carry more of the load.

Planet Fitness currently carries a Zacks Rank #3 (Hold). It has a Value Score of B and VGM Score of B, along with a Growth Score of C and Momentum Score of C. Because the Style Scores complement the Zacks Rank, this combination supports a measured interpretation rather than a stronger buy signal.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research