Business
Life Time, Planet Fitness earnings show K-shaped economy
Two of the largest U.S. gym operators delivered the same headline in their latest earnings reports: strong growth.
But beneath the surface, Life Time Group Holdings and Planet Fitness told very different stories about the American consumer. They highlighted a widening divide between higher-income households that continue to spend freely and more price-sensitive consumers who are beginning to show signs of strain.
The Planet Fitness logo is seen on the outside of its gym at the Loyal Plaza in Loyalsock Township, Pennsylvania.
Paul Weaver | Lightrocket | Getty Images
Both companies reported double-digit percentage revenue growth, rising memberships and expanding footprints in 2025. Their respective outlooks for 2026, however, point to a “K-shaped” economy, a term used to describe a split in spending trends between higher and lower-income groups. Here’s what we learned.
Life Time: Affluent consumers keep spending
Life Time’s earnings reinforced that affluent Americans are still shelling out, especially on their health and wellness.
In the fourth quarter, the company’s total revenue rose 12.3% year over year to $745.1 million. CFO Erik Weaver attributed the increase to “continued execution in our centers,” including higher average dues and stronger utilization of in-center businesses.
The company, which operates large-format fitness clubs with amenities like pools, spas and cafes, increased membership dues last year by roughly $10 to $30 per member. The change did not slow demand — membership and engagement have continued to climb.
A growing share of Life Time’s revenue is coming from in-center spending, which topped $191 million in the fourth quarter. Members are taking full advantage of additional personal training, spa services and food and beverage as they treat the space as a lifestyle destination.
Average revenue per center membership was $882, up 10.8%.
“It’s a super engaged membership model instead of a non-use membership model,” said Life Time Group Holdings CEO Bahram Akradi. “We are basically operating at optimal levels of that right now.”
Despite having far fewer locations than Planet Fitness, the company generates significantly more revenue, underscoring the higher spending power of its customer base.
“The model proved its resilience throughout a macro-challenged 2025 in which in-center revenue grew,” said Mizuho analyst John Baumgartner. “And see downside risks limited by a memberships skew favoring high-income households and differentiated club activities.”
The results suggest higher-income consumers remain relatively insulated from broader economic pressures and continue prioritizing discretionary wellness spending.
Planet Fitness: Sales grow, but outlook disappoints
The strength area of the new Planet Fitness at 226 Harvard Avenue in Allston.
Pat Greenhouse | Boston Globe | Getty Images
Planet Fitness also reported strong growth, adding 1.1 million new members in 2025 and delivering double-digit percentage revenue gains.
Investors, however, focused on its outlook, which fell short of Wall Street expectations. The company projected slower fiscal 2026 revenue growth of 9% and weaker same-store sales than expected at 4% to 5%, which raised demand concerns.
However, Planet Fitness remained positive about growth, saying the anticipated pullback in membership was temporary.
“Our join trends were impacted by the storms and cold weather in late January across many of our markets, and we experienced a slightly higher cancel rate last month than anticipated,” said Planet Fitness CFO Jay Stasz. “Notably, recent attrition trends are returning in line with our expectations.”
Planet Fitness has also been testing price hikes in some markets, which it expects to fully roll out in summer 2026. It’s also investing in new amenities like red light therapy and additional classes to increase revenue per member and attract younger members.
That strategy could support long-term growth, but some analysts are skeptical, saying the “guidance gap” between Planet Fitness’ results and Wall Street expectations is particularly frustrating.
“The company now faces a credibility hurdle,” said Stifel analyst Chris Cull. “Is 2026 guidance conservative, or are the out-year targets unrealistic? Until the company provides a clearer path to acceleration, we expect the stock will likely churn.”
A softened 2026 outlook suggested some uncertainty about how much further its core customers can stretch their spending.
The widening consumer divide
Together the results highlight a broader shift in the U.S. economy.
Higher-income consumers, reflected in Life Time’s performance, continue to absorb price increases and spend on premium experiences. Meanwhile, Planet Fitness suggest even though price-sensitive customers are engaged, they’re more reluctant to spend.
That’s not a problem unique to fitness and has appeared across industries. Airlines are racing to build out luxury offerings as higher-income travelers continue to spend. Meanwhile, fast-food companies are leaning on value meals to attract more price-sensitive customers, reinforcing the idea of a K-shaped economy.
Planet Fitness’ performance in the coming quarters could serve as an indicator of how much discretionary spending capacity remains for lower- and middle-income consumers.
William Blair analyst Sharon Zackfia lowered her firm’s projections for Planet Fitness’ 2026 member growth to 800,000 from 1 million given projected weakness in the first quarter, which typically accounts for 60% of full-year sign-ups. Still, the guidance did not dampen the firm’s optimism about the company.
“We reiterate our Outperform rating and continue to view the brand’s long-term outlook as robust given its industry-leading low-price/non-intimidating club format,” said Zackfia.
For now the fitness industry is offering a clear signal: Consumer spending remains strong, but is increasingly divided.
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Trump threatens Iran’s power plants if strait not open. (0:17) GameStop earnings draw focus as Cohen touts Berkshire style. (1:17) California jury finds Elon Musk misled Twitter investors. (2:15)
The following is an abridged transcript:
It’s a light week for economic data and earnings, meaning sentiment will remain closely tied to the conflict with Iran — and what it means for oil and interest rates.
President Donald Trump said Saturday the U.S. would “obliterate” Iran’s power plants if the Strait of Hormuz is not reopened within 48 hours.
Prediction markets are signaling skepticism.
On Polymarket, traders assign just a 30% chance that traffic returns to normal by the end of April.
Kalshi contracts imply a more gradual reopening, with about a 39% probability by May 15, rising to 53% by June 1 and 59% by July 1.
The strait handles about 20% of global oil shipments.
WTI crude (CL1:COM) (USO) briefly moved back above $100/bbl in weekend trading on IG Index before easing. On the Hyperliquid blockchain, oil was trading around $98/bbl.
With oil putting upward pressure on inflation, expectations for Fed rate cuts this year have largely evaporated. Fed funds futures now indicate nearly a one-in-three chance that rates are higher at year-end.
On the earnings front, GameStop (GME) is likely the headline name among a light reporting slate.
There’s limited analyst coverage, so no formal consensus, but the holiday quarter update carries added weight after CEO Ryan Cohen floated ambitions to turn the retailer into a Berkshire (BRK.A) (BRK.B)-style investment platform.
Cohen has discussed acquiring an undervalued, high-quality public consumer company run by what he calls a “sleepy” management team. Any detail on deal size, timing, financing or potential targets would move sentiment — though management hasn’t held an earnings call in more than two years.
Seeking Alpha analyst Bernard Zambonin said he expects the results to offer little in the way of core fundamentals. However, backing from high-profile investors like Michael Burry continues to support the stock’s momentum and reinforces its appeal to those who view GameStop less as a retailer and more as an investment vehicle.
Also on the calendar:
Chewy (CHWY), PDD (PDD) and Beyond Meat (BYND) report Wednesday, followed by Pony AI (PONY) on Thursday.
BYD (BYDDF) and Carnival (CCL) report Friday.
In the news this weekend, a California jury found that Tesla (TSLA) CEO Elon Musk defrauded Twitter investors through certain public statements about the company’s user metrics, ruling that his comments were materially false or misleading.
The case centered on Musk’s May 13 and May 17 tweets in 2022 — including one that said the deal was “temporarily on hold” pending confirmation that bots accounted for about 5% of users, as disclosed in SEC filings.
Lawyers for the plaintiffs said total damages could reach as much as $2.6B — a small fraction of Musk’s net worth.
And OpenAI (OPENAI) is planning a major hiring push.
According to the Financial Times, the company aims to nearly double its workforce to about 8,000 employees by the end of 2026, up from roughly 4,500 today, as it seeks to narrow the gap with Anthropic (ANTHRO).
Most of the hires would focus on product development, engineering, research and sales. OpenAI is also expanding its “technical ambassadorship” initiative — specialists who help enterprise clients make better use of its tools.
And for income investors, Broadcom (AVGO) goes ex-dividend on Monday, with a payout date of March 31.
Dividend heavyweight Altria (MO) and Seagate (STX) go ex-dividend on Wednesday. Altria pays on April 30, while Seagate pays out on March 25.
Dick’s Sporting Goods (DKS) goes ex-dividend on Friday, with an April 10 payout date.
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