Planet Fitness shares sink 15% after board ousts CEO in shocking move

Chris Rondeau, CEO of Planet Health

Adam Jeffery | CNBC

In a transfer that surprised buyers and staff alike, Planet Health ousted firm veteran Chris Rondeau from his put up as CEO, the exercise chain mentioned Friday in a press launch.

The inventory dropped 15% within the wake of the announcement, hitting a 52 week low.

Planet Health mentioned it’s looking for its subsequent chief each internally and externally. Craig Benson, the previous governor of New Hampshire and a member of the corporate’s board, will function the interim CEO. He is a franchisee of each Planet Health and Dunkin’ Donuts and has been on Planet’s board for six years.

Rondeau’s departure seems sudden, and it isn’t clear what triggered the choice, particularly after a stronger-than-expected second quarter earnings report final month. Some employees near Rondeau discovered about his departure across the time the information was introduced publicly, leaving them shocked, in line with an individual conversant in the matter.

In a analysis word, William Blair analyst Sharon Zackfia referred to as the information “abrupt” and mentioned it did not “seem deliberate” as a result of the corporate canceled two deliberate investor convention displays this week.

“The choice was characterised because the board’s and never Rondeau’s,” Zackfia wrote.

Planet Health declined additional remark. Rondeau could not be reached.

Rondeau is a longtime veteran of the corporate, working his manner up from a entrance desk place almost 30 years in the past on the fitness center’s first location in Dover, New Hampshire, when it was owned by founders Michael and Marc Grondahl. Rondeau has served as CEO since 2013 and beforehand held the function of chief working officer. He’ll proceed as a member as of the board of administrators and can keep on in an advisory function “to assist guarantee a clean transition,” the corporate mentioned.

“My 30-year profession at Planet Health has been an unimaginable trip, and it has been an honor to steer this Firm and serve our staff, franchisees and members, all of whom have performed a key function in our large progress and success,” Rondeau mentioned in a press release. “I’m grateful for and look ahead to supporting the administration workforce in an advisory capability, and trust within the long-term potential of Planet Health.”

Throughout his time as CEO, Rondeau led Planet Health’s IPO and tripled its membership base from about 700 to about 2,400 places. When he began within the place, the corporate was doing about $200 million in annual income and is now projected to do greater than $1 billion this 12 months, Zackfia mentioned.

“As we enter the following chapter of Planet Health’ journey, the Board felt that now was the precise time to transition management,” Planet Health Chairman Stephen Spinelli Jr. mentioned in a press launch. “In in the present day’s evolving surroundings, Planet Health is continuous to boost our aggressive benefit, capitalize on our measurement and scale, and drive additional shareholder worth.”

The corporate’s inventory is down about 34% this 12 months, giving it a market worth of about $4.47 billion.

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