Planet Fitness has admitted that one of its gyms caused a media firestorm by allowing transgender customers to shave in the women’s locker room, resulting in a “pretty significant” drop in memberships, the company said. plans to increase prices by 50%.
Management on Thursday lowered its sales and profit forecasts, citing in part the March 11 incident at Planet Fitness in Fairbanks, Alaska. The incident went viral after member Patricia Silva posted a video of herself confronting a transgender customer, sparking outrage.
“The first half of March was pretty good,” Chief Financial Officer Tom Fitzgerald said Thursday after announcing that first-quarter sales were lower than expected.
“Then, as social media became abuzz with our policy issues, we definitely saw a change in results in late March. Participation and cancellations were affected quite significantly.”
DA Davidson analyst Linda Bolton Weiser said the company ended the quarter with 19.6 million members, an 8% increase from a year earlier and below internal expectations. Bolton Weiser said in her research note that traffic to the company’s website also fell by double digits.
“I hope that Planet Fitness members around the world continue to cancel their memberships until this woke organization makes the choice to care enough about women’s rights and children and remove men from women’s locker rooms. ,” Silva told the Post on Friday.
Planet Fitness said it expects sales to increase 4% to 6% this year, up from previous expectations of 6% to 7%. Profits are now expected to increase by 7% to 9%, compared with previous expectations of 10% to 11%.
Craig Benson, interim chief executive officer of the nation’s largest gym chain, which operates 2,500 stores, echoed the finance chief’s sentiments.
“Media mentions of the incident peaked in mid-March, and we believe this contributed to the softening in participation numbers and the slight increase in cancellations for the remainder of the month,” Benson said.
He added: “The good news is that while attendance is picking up, cancellations are still rising.”
Still, the company, known for its low $10 membership fees, announced it would raise the price to $15 for new members starting in the summer. This is the first price increase since 1998. Planet Fitness had been experimenting with price increases in some markets before the uproar.
Mr. Fitzgerald, who is retiring in August, said: “As the price increases only apply to new Classic Cardmembers, it will take some time for store-level margin expansion to benefit from the price changes.” Stated.
Silva sparked backlash after taking a photo of a transgender customer in the women’s locker room. She later posted a video in which she said a young girl sat on a bench wrapped in a towel and appeared anxious or “scared” while a transgender customer shaved.
In response, Planet Fitness revoked Silva’s membership the following day for violating the gym’s policy against taking photos inside the gym. Meanwhile, the company assigned an employee to escort transgender customers to the women’s locker room.
The company’s 10-year-old policy allows members and guests to use facilities that are “best suited to their honest and self-declared gender identity,” the company said.
The decision sparked a nationwide backlash, with the company reportedly receiving dozens of bomb threats across the country. Amid calls for a boycott, the company’s market value has fallen by more than $400 million.
Benson said Thursday that his company’s policies are no different than other gyms, including the YMCA.
Benson will be replaced as new CEO next month by Colleen Keating, who required employees to undergo “unconscious bias training” and championed “hiring through a DEI lens” at her previous company. to take office.
Longtime CEO Chris Londreau was suddenly fired in September. He resigned from the board in February after the company cut 9% of its workforce.
