Planet Fitness announced on Tuesday that Colleen Keating will become the fitness club’s new CEO starting June 10. Craig Benson, who has been the interim CEO since Chris Rondeau left in September, will continue as a member of the board of directors.
This news follows several months of searching for the right person for the role. While the announcement initially led to a 3% drop in the company’s stock, some analysts see it as a positive development.
Piper Sandler analyst Korinne Wolfmeyer sees this as the first of several positive changes for the company. She believes Keating’s leadership will bring confidence in potential pricing adjustments and help with the search for a new CFO, all of which could lead to increased earnings and higher stock value.
Wolfmeyer rates the stock as overweight with a target price of $80. On Tuesday, the stock was trading at around $60 per share.
Keating brings with her three decades of experience in managing large-scale operations and franchises, with a focus on global consumer-facing businesses in industries like hospitality, real estate, and franchise management.
She most recently served as CEO of FirstKey Homes and has held leadership positions at InterContinental Hotels Group and Starwood Hotels & Resorts Worldwide Inc.
Keating is joining Planet Fitness at a challenging time, with factors like the increasing popularity of weight loss drugs like Ozempic and Wegovy, along with controversies over its locker room policy.
According to William Blair analyst Sharon Zackfia, Keating’s appointment comes at a critical juncture for Planet Fitness, particularly as it addresses tensions among franchisees and recent social media debates about the safety of women’s locker rooms. Despite these challenges, William Blair maintains a positive outlook on Planet Fitness stock.
In addition to her role as CEO, Keating will be involved in finding a new chief financial officer. The current CFO, Tom Fitzgerald, is retiring in September.
Stephen Spinelli, chairman of Planet Fitness’s board of directors, expressed confidence in Keating’s abilities, highlighting her operational expertise and strategic vision. He believes she is well-suited to drive the company’s growth in the coming years.
The company’s stock has faced a decline of about 17% this year, with volatility increasing after the announcement of Chris Rondeau’s departure as CEO.
Planet Fitness is gearing up for its annual general meeting on April 30 and will report its first-quarter earnings on May 9.
