stock slid Friday after the fitness chain announced the departure of CEO Chris Rondeau and named a new interim CEO, effective immediately.
board decided to “transition to new leadership, resulting in the departure of Chris Rondeau,” the company said in a news release Friday. The former CEO, who had been at the helm since January 2013, will continue to serve as a member of the board and will be nominated for re-election next year, the company said.
Director Craig Benson will serve as interim CEO while the board searches for a permanent candidate.
“As we enter the next chapter of Planet Fitness’ journey, the board felt that now was the right time to transition leadership,” Chairman Stephen Spinelli said in the release.
In a research report Friday, William Blair analysts shared their view on the timing of the news.
“While the catalyst for the shift in leadership is uncertain, with the release indicating the change is not the result of any material or unexpected financial events, it is also abrupt and does not appear planned, as the company canceled two planned investor conference presentations this week and the decision was characterized as the board’s and not Rondeau’s,” analysts wrote.
Planet Fitness confirmed in an email to Barron’s that it didn’t attend the conferences.
“While the leadership transition is unnerving, we continue to believe Planet is capable of healthy EPS growth even in a slower expansion scenario given its unique value-oriented, high-volume model and reiterate our Outperform rating,” they added.
The stock dived 14% to $51.23, putting it track for its lowest close since Aug. 7, 2020, when it closed at $50.94, according to Dow Jones Market Data.
During Rondeau’s reign, the stock performed quite well. It began trading in 2015, and through Thursday’s close it posted a price return of 274% over this time, while the
In the more immediate past, however, the stock has hit a rocky patch. Earlier this year, the company posted a disappointing first-quarter earnings report and its President Edward Hymes left effective May 31, only months after joining the company.
Planet Fitness rebounded to report better-than-expected second-quarter earnings but the shares remain down 34% this year.
Write to Emily Dattilo at [email protected]