A portrait of Colleen Keating.
Courtesy of Planet Fitness
Planet Fitness announced Tuesday that Colleen Keating will take over as the fitness club’s new CEO, effective June 10.
Craig Benson, who has been serving as interim CEO since the departure of Chris Rondeau in September, will remain on the board.
The announcement comes after months of searching, and some analysts are calling it positive for the stock, despite shares falling about 3% after the announcement.
Piper Sandler analyst Korinne Wolfmeyer said the news is “the first catalyst of many” for the stock.
“Planet Fitness now has someone who can fully lead the New Growth Model changes, who can instill confidence in the potential price changes and can help put together a plan for the upcoming CFO search,” Wolfmeyer said in a note. . “We view all of these as positive drivers for upside earnings and valuation appreciation for PLNT.”
Wolfmeyer rates the stock as overweight with a price target of $80. The stock was trading for about $60 a share on Tuesday.
Keating has 30 years of experience in large-scale business and franchise management, as well as leadership in global consumer-facing businesses in hospitality, real estate, operations and franchise management.
As of 2020, she serves as the CEO of FirstKey Homes. He previously held leading roles in InterContinental Hotel Group and Starwood Hotels & Resorts Worldwide Inc.
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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 see Keating as an unconventional but solid choice to lead Planet Fitness as it navigates franchisee tensions 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 align better with members’ gender identity,” 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 departure in February and will step down on September 1.
“Colleen’s deep business knowledge, strategic mindset and understanding of large-scale franchise businesses and consumer-facing brands made her a standout among the candidates considered,” said Stephen Spinelli, chairman of the fitness club’s board of directors. . “We are confident that Colleen is an exceptional leader with the desired skills, experience and culture-first mindset necessary to accelerate Planet Fitness’ next phase of growth.”
Shares of Planet Fitness are down about 17% this year and have been volatile since Rondeau announced he would step down after 10 years in the role.
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.