A portrait of Colleen Keating.
Courtesy of Planet Fitness
Planet Fitness announced Tuesday that Colleen Keating will take over as the gym's new executive director effective June 10.
Craig Benson, who has served as interim CEO since Chris Rondeau's departure in September, will remain on the board of directors.
The announcement comes after months of searching, and is seen as positive for the stock by some analysts, even though shares fell about 3% after the announcement.
Piper Sandler analyst Korinne Wolfmeyer said the news is “the first catalyst of several” for the stock.
“Planet Fitness now has someone who can fully lead the New Growth Model changes, who can instill confidence in potential pricing changes, and can help lay out a plan for the upcoming CFO search,” Wolfmeyer said in a note. “All of which we view as positive drivers of PLNT's earnings growth and valuation appreciation.”
Wolfmeyer rates the stock overweight with a price target of $80. The stock was trading at about $60 a share on Tuesday.
Keating has 30 years of experience in large-scale operations and franchise management, as well as leadership in global consumer-facing operations in hospitality, real estate, operations and franchise management.
As of 2020, she serves as CEO of FirstKey Homes. She previously held leadership positions at InterContinental Hotel Group and Starwood Hotels & Resorts Worldwide Inc.
UCG | Universal Image Group | fake images
Keating joins Planet Fitness as the company faces headwinds, including the growing popularity of weight-loss drugs like Ozempic and Wegovy, as well as controversy surrounding its locker room policy.
“We view Keating as an unconventional but solid choice to lead Planet Fitness as it navigates tensions between franchisees and a recent social media controversy over the safety of women's locker rooms in light of Planet's stated policy of using locker rooms. that best align with members' gender identities,” William Blair analyst Sharon Zackfia said in a note.
William Blair has an “outperform” rating on Planet Fitness stock.
Keating will also play an important role in the company's search for a new chief financial officer. The company's current chief financial officer, Tom Fitzgerald, announced his retirement in February and will step down on September 1.
“Colleen's deep operational knowledge, strategic mindset and understanding of large-scale franchise operations and consumer-oriented brands made her stand out among the candidates considered,” said Stephen Spinelli, chairman of the gym's board of directors. “We are confident that Colleen is an exceptional leader with the skills, experience and cultural mindset necessary to accelerate Planet Fitness' next phase of growth.”
Shares of Planet Fitness have fallen about 17% this year and have been volatile since Rondeau announced he was stepping down after 10 years on the job.
Planet Fitness will hold its annual general meeting on April 30 and report first-quarter earnings on May 9.
Correction: Planet Fitness will report first-quarter earnings on May 9. An earlier version of this story misstated the date.
