A portrait of Colleen Keating.
Courtesy of Planet Fitness
Planet Fitness announced Tuesday that Colleen Keating will take over as the fitness club’s new CEO, effective June 10.
Craig Benson, who has served as interim CEO since Chris Rondeau left in September, will remain on the board.
The announcement comes after months of searching and some analysts see it as a positive for the stock, although shares fell more than 3% following the announcement.
Korinne Wolfmeyer, an analyst at Piper Sandler, said the news was “the first catalyst of several” for the stock.
“Planet Fitness now has someone who can fully lead the changes to the new growth model, provide confidence in possible pricing changes and help develop a plan for the upcoming CFO search,” Wolfmeyer said in a note. “We see all of these as positive drivers of earnings growth and valuation growth for PLNT.”
Wolfmeyer rates the stock overweight with a price target of $80. On Tuesday, the stock was trading at about $60 per share.
Keating has 30 years of experience in large-scale operations and franchise management, as well as leadership roles in global consumer-focused operations in hospitality, real estate, operations and franchise management.
She has been CEO of FirstKey Homes since 2020. She previously held management positions at InterContinental Hotels Group and Starwood Hotels & Resorts Worldwide Inc.
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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 over its locker room policies.
“We view Keating as an unconventional but solid choice to lead Planet Fitness as the company navigates tensions among franchisees and a recent controversy on social media over the safety of women’s locker rooms in light of Planet’s stated policy of locker room closures “Users that best fit members’ gender identities,” William Blair analyst Sharon Zackfia said in a note.
William Blair gave Planet Fitness shares an “outperform” rating.
Keating will also play an important role in the company’s search for a new chief financial officer. The company’s current CFO, Tom Fitzgerald, announced his resignation in February and will step down on September 1.
“Colleen’s deep operational knowledge, strategic mindset and understanding of large franchises and consumer-focused brands made her a standout candidate among those considered,” said Stephen Spinelli, the fitness club’s chief executive officer. “We are confident that Colleen is an exceptional leader with the desired skills, experience and culture-focused mindset needed to accelerate Planet Fitness’ next phase of growth.”
Shares of Planet Fitness have fallen about 17% this year and have been volatile since Rondeau announced he was stepping down after 10 years on the job.
Planet Fitness will hold its annual meeting on April 30 and report first quarter results on May 2.
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2024-04-16 17:52:45
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