Planet Fitness, a well-known fitness club chain, announced on Tuesday that Colleen Keating will assume the role of CEO starting June 10. This decision follows an extensive months-long search after the departure of former CEO Chris Rondeau in September. The announcement was met with mixed reactions as the company’s stock experienced a 3% dip immediately following the news.
Colleen Keating brings a wealth of expertise and a diverse background to her new leadership role. With an impressive tenure spanning over 30 years in franchise management, her experience covers a wide range of consumer-facing operations in sectors such as hospitality and real estate. Before her upcoming role at Planet Fitness, Keating held the position of CEO at FirstKey Homes since 2020. Additionally, she has held leadership roles at major hospitality organizations including InterContinental Hotels Group and Starwood Hotels & Resorts Worldwide Inc.
Despite the initial downturn in stock price, some financial analysts are expressing a positive outlook regarding Keating’s appointment. Korinne Wolfmeyer of Piper Sandler views the new CEO as a key catalyst for future growth. Wolfmeyer suggests that Keating’s leadership is poised to drive significant transformations within the company’s New Growth Model, instill confidence in potential pricing strategies, and facilitate the search for a new Chief Financial Officer (CFO). She believes these strategic moves will serve as positive drivers that could significantly enhance the company’s earnings and overall valuation. Wolfmeyer has thus rated the stock as overweight, setting a target price of $80, despite its current trading price of around $60.
Planet Fitness is facing several challenges during this transitional period, including the rising popularity of weight loss medications such as Ozempic and Wegovy, and contentious debates surrounding its locker room policies. These policies have ignited controversy concerning the safety of women’s locker rooms, owing to Planet Fitness’s inclusive policy allowing members to use locker rooms that correspond with their gender identity.
Sharon Zackfia, an analyst at William Blair, noted that although Keating may seem like an unconventional choice, her extensive background makes her a formidable leader capable of navigating Planet Fitness through these ongoing franchisee tensions and societal debates.
Furthermore, with the impending retirement of the current CFO, Tom Fitzgerald, on September 1, Keating will play an instrumental role in the selection of his successor. The company values Keating’s deep operational insights and strategic mindset, which are seen as vital for steering its next phase of growth. Stephen Spinelli, chairman of the board, has expressed his confidence in Keating’s exceptional leadership qualities, highlighting her alignment with the company’s culture and ability to accelerate Planet Fitness’s development initiatives.
Colleen Keating’s appointment comes at a critical juncture when Planet Fitness has experienced a 17% decline in its stock value this year, marking a period of volatility since Rondeau’s decision to step down after a decade at the helm. The fitness chain eagerly anticipates its annual general meeting on April 30 and is gearing up to release its first-quarter earnings on May 9.
Under Keating’s leadership, Planet Fitness is poised to revamp its strategic approach and rebuild investor confidence. Her vast experience in managing large-scale operations and her progressive leadership style are anticipated to be critical in propelling the company forward in an increasingly competitive and rapidly evolving fitness industry landscape.
