Planet Fitness Finally Made Canceling Easier. Why Its CEO Thinks That Could Help Growth

Making it easier to cancel gym memberships will—in time—bring in more customers, Planet Fitness says.

As of May, customers at all Planet Fitness (PLNT) locations have been able to cancel their subscriptions online, CEO Colleen Keating said on a conference call Wednesday. The company is seeing a “slight elevation” in canceled plans, but the churn may level off in three months based on prior experience, Keating said. 

“We believe this is the right thing to do—both to support our members and their experience, and as the industry leader,” she said, according to a transcript made available by AlphaSense.

“Allowing members to more easily manage their membership will only benefit us when they think about rejoining a club in the future,” she said, telling investors that gyms are poised to grow because younger generations are particularly focused on fitness. 

Planet Fitness voluntarily implemented a so-called “click-to-cancel” policy. A federal rule would have required gyms, media companies, retailers, and other types of businesses to make it easier to cancel memberships online, but an appeals court blocked the move in July.

The New Hampshire-based company narrowed its outlook for same-club sales through the full fiscal year, now anticipating a 6% increase, compared to 5% to 6% growth previously. The adjustment reflects membership churn and the volatile economy, CFO Jay Stasz said.

Planet Fitness reported quarterly revenues and profits that rose from a year ago and exceeded Wall Street analysts’ expectations, but shares finished Wednesday down some some 3%. Still, the stock has climbed about 7% since the start of the year.