- Planet Fitness’ CEO has been dramatically ousted, though he remains a member of the board
- The announcement comes after the company’s president left in May after only a few months into the role
- Planet Fitness shares have plummeted 20% since the news broke
’Tis the season for significant leadership changes, apparently. Gym chain Planet Fitness has seen a change of the guard with its CEO, Chris Rondeau, unexpectedly ousted from the top job.
An interim CEO has been appointed, but the damage is done for investors who don’t like to see prudent succession plans in place. Here’s everything you need to know about Planet Fitness’s sudden leadership switchover and the market reaction.
What’s happened with the Planet Fitness CEO?
Popular international gym chain Planet Fitness has seen its CEO suddenly depart from the company. Chris Rondeau has been in charge of the company since 2013. Director Craig Benson will serve as an interim CEO while the board finds someone else.
Rondeau will continue to serve as a member of the board and will be eligible for re-election next year. The move comes as Planet Fitness’s president, Edward Hymes, left in May after spending only a few months at the company.
Rondeau worked his way up in the company from a front desk position nearly 30 years ago, so the lack of elaboration around his leaving has left investors concerned about the company’s future.
A statement from Planet Fitness said the board had decided to “transition to new leadership, resulting in the departure of Chris Rondeau,” with Planet Fitness board chairman Stephen Spinelli commenting, “As we enter the next chapter of Planet Fitness’ journey, the board felt that now was the right time to transition leadership”. It’s pretty vague, if you ask us.
In a statement, Rondeau said he’s “grateful for and look forward to supporting the management team in an advisory capacity, and I have confidence in the long-term potential of Planet Fitness.”
How did Wall Street take the news?
It’s fair to say that Wall Street isn’t a big fan of surprises, so an abrupt CEO departure wasn’t taken very well. Shares in Planet Fitness finished the week 15.9% lower on Friday, hitting a 52-week low of $49.91.
To make things worse, the stock has fallen further this week by 6.8% to $46.30. That’s left Planet Fitness’ share price in the uncomfortable position of plummeting 40% since the start of the year.
Under Rondeau’s tenure as CEO, the stock has typically performed well. Planet Fitness began trading in 2015 and in that time has seen a 274% growth before the news about Rondeau’s departure. In comparison, the S&P 500 has gained 116% in the same time.
The bottom line
Planet Fitness has hit a rough patch, with unexpected departures and some dodgy financials in the latest earnings report. But it’s nothing the gym chain can’t deal with internally, and the hunt for a new CEO begins. Investors will be interested to hear about the ‘new direction’ the company referenced — and how soon that translates into profits.