In this clip from "3-Minute Stock Updates" on Motley Fool Live, recorded on July 29, Motley Fool contributors Toby Bordelon and Ryan Henderson discuss gym chain Planet Fitness' (PLNT 0.65%) recent development deal in New Zealand, and whether the company's international expansion could drive future growth.
Toby Bordelon: Do you think the international expansion could be a growth driver of Planet Fitness going forward, did they go beyond this or is this maybe a one-off thing here?
Ryan Henderson: I think they can. Well, I think New Zealand itself might not have a large enough population to be just a huge growth driver and move the needle for them but I think international, overall can. I think Australia points to that, at least their success there.
The other thing I'll say is that while I think this strategy works everywhere and I think it has a customer demographic everywhere, I don't necessarily think you need this. I don't think you need international expansion to make this a successful investment. They say they think they can reach 4,000 stores in the U.S. alone. Prior to COVID, they had 53 consecutive quarters of systemwide same-store sales growth. You combine domestic store expansion, which is basically doubling store expansion in the U.S., plus consistent same-store sales growth. I think you've got a blueprint for good returns there. Assuming they're able to keep profit margins pretty steady.
