Another CEO change.
On Friday, the Board of Planet Fitness (PLNT). announced 30-year veteran of the company and the decision to “move to new leadership” due to the departure of CEO Chris Rondeau.
“As we enter the next phase of Planet Fitness’s journey, the board feels now is the right time to transition to leadership,” board chairman Stephen Spinelli Jr. said in the release.
As the company searches for new leadership, six-year board member Craig Benson has been named interim CEO. Benson previously served as governor of New Hampshire and is a Planet Fitness and Dunkin’ Donuts franchisee. The company said it is considering internal and external candidates.
Planet Fitness is the latest company to shake up the C-suite, and it’s something Wall Street isn’t taking lightly. On Friday, Planet Fitness stock fell as much as 16 percent, hitting a 52-week low. The stock was also a bullish sign on Yahoo Finance.
Planet Fitness did not immediately respond to Yahoo Finance’s request for comment.
While the exact reason for Rondeau’s sudden departure has not been revealed, during his ten-year tenure, Rondeau is credited with growing the fitness center’s membership more than five and a half times to 18.4 million members and more than quadrupling its footprint. 2,400 stores.
It quintupled revenue from $200 million in 2013 to $1 billion this year and took the company public in 2015, William Blair analyst Sharon Zakfia said in a note. Since the company’s IPO, shares have more than tripled.
In the release, Rondeau called his career at Planet Fitness an “incredible journey” and thanked the staff, franchisees and members. He will continue to serve as a member of the Board and will be nominated for re-election at the Company’s 2024 Annual Meeting.
Wall Street was shocked by the rise of Rondeau
The sudden change in the C-suite appeared to surprise Wall Street.
“The cause of the leadership change is uncertain,” said Zakfia, an analyst at William Blair. The decision was sudden and unplanned, as the company canceled two scheduled investor conference presentations this week and the decision was made by the board, not Rondeau.
Who the board might tap as the next CEO – that’s not clear.
“We don’t know of an internal successor and instead we suspect the board will be looking for an experienced outside candidate who is a strong franchisee,” Zakfia added.
Zakfia also mentioned an opportunity that could be a major focus for the next CEO: “Key unlocking will enable clubs to reduce cost engineering and improve returns and encourage further expansion.”
Stifel analyst Chris Okul struck a similar tone.
“Although the timing of the announcement is surprising, we believe that the leadership transition will set the stage for a faster pace of change, certain elements of the model – such as increasing the price of the classic membership package – can now be put on the table for consideration,” said Okul.
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Brooke DiPalma is a Yahoo Finance reporter. Follow her on Twitter at @Brooke DePalma Or email her at [email protected].
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