Life Time & Planet Fitness Earnings Reveal a ‘K-Shaped’ Economy

A Two-Tiered Recovery: Life Time and Planet Fitness Reflect Diverging Consumer Spending

The latest earnings reports from Life Time Group Holdings and Planet Fitness paint a complex picture of the American consumer, revealing a widening gap between those who continue to spend freely and those facing increasing financial strain. Both companies reported overall growth in 2025, but their differing outlooks for 2026 underscore what economists are calling a “K-shaped” economic recovery – one where high-income households are thriving while lower and middle-income groups lag behind. This divergence is particularly visible within the fitness industry, where consumers are making distinct choices about where and how they invest in their health and wellness.

Life Time, catering to a more affluent clientele, saw its total revenue rise 12.3% year-over-year in the fourth quarter to $745.1 million. This growth was fueled by higher membership dues – increased by roughly $10 to $30 per member last year – and increased spending on premium services like personal training, spa treatments, and food and beverage options. Planet Fitness, focused on value and accessibility, also experienced growth, adding 1.1 million new members in 2025. However, its 2026 outlook, projecting slower revenue growth of 9% and weaker same-store sales, raised concerns among investors.

The Affluent Consumer: Life Time’s Upscale Strategy

Life Time’s success is rooted in its strategy of offering a comprehensive wellness experience. The company operates large-format fitness clubs equipped with amenities like pools, spas, and cafes, positioning itself as a lifestyle destination rather than just a gym. This approach resonates with higher-income consumers who are less sensitive to price increases and more willing to spend on premium services. CFO Erik Weaver attributed the revenue increase to “continued execution in our centers,” highlighting the success of this strategy.

A significant portion of Life Time’s revenue growth is now coming from in-center spending, which reached over $191 million in the fourth quarter. This indicates that members are actively utilizing and valuing the additional services offered, treating the club as an integral part of their lifestyle. Average revenue per center membership rose to $882, a 10.8% increase. CEO Bahram Akradi described the membership model as “super engaged” rather than one characterized by infrequent apply.

Despite having a smaller footprint than Planet Fitness, Life Time generates significantly more revenue per location, a clear indication of the higher spending power of its customer base. Mizuho analyst John Baumgartner noted that the company’s model proved resilient throughout a challenging 2025, with downside risks limited by its focus on high-income households and differentiated club activities. Life Time Group Holdings’ results suggest that affluent consumers remain relatively insulated from broader economic pressures and continue to prioritize discretionary wellness spending.

Planet Fitness: Value Proposition Tested

Planet Fitness, known for its low-cost membership model and non-intimidating environment, also experienced positive growth in 2025. The company added 1.1 million new members, demonstrating continued demand for affordable fitness options. However, investors reacted negatively to the company’s 2026 outlook, which fell short of Wall Street expectations. The projected revenue growth of 9% and same-store sales growth of 4% to 5% raised concerns about slowing demand among its core customer base.

Planet Fitness attributes some of the slowdown to external factors, such as storms and cold weather in January, which impacted join trends and led to a slightly higher cancellation rate. CFO Jay Stasz emphasized that attrition trends are now returning to normal levels. The company is also testing price hikes in some markets, with plans for a full rollout in summer 2026, and investing in new amenities like red light therapy and additional classes to attract younger members and increase revenue per member.

However, some analysts remain skeptical. Stifel analyst Chris Cull described the gap between Planet Fitness’ results and Wall Street expectations as “frustrating,” questioning whether the 2026 guidance is conservative or if the long-term targets are unrealistic. Planet Fitness’ softened outlook suggests some uncertainty about the continued spending capacity of its price-sensitive customers.

The K-Shaped Economy in Action

The contrasting performances of Life Time and Planet Fitness provide a microcosm of the broader “K-shaped” economic recovery. Higher-income consumers, as demonstrated by Life Time’s results, continue to absorb price increases and spend on premium experiences. Meanwhile, Planet Fitness’ experience suggests that even though price-sensitive customers remain engaged, their willingness to spend is more limited.

This trend isn’t isolated to the fitness industry. Similar patterns are emerging across various sectors. Airlines are investing in luxury offerings to cater to high-income travelers, while quick-food companies are leaning on value meals to attract more budget-conscious customers. This broader shift in consumer spending highlights the growing divide between those who are thriving and those who are struggling in the current economic climate.

Implications for the Fitness Industry and Beyond

The diverging paths of Life Time and Planet Fitness raise questions about the future of the fitness industry and the broader consumer landscape. Planet Fitness’ performance in the coming quarters will be closely watched as an indicator of how much discretionary spending capacity remains for lower- and middle-income consumers. William Blair analyst Sharon Zackfia lowered her firm’s projections for Planet Fitness’ 2026 member growth to 800,000 from 1 million, citing projected weakness in the first quarter, which typically accounts for 60% of full-year sign-ups. Despite this adjustment, the firm remains optimistic about the company’s long-term outlook, citing its industry-leading low-price/non-intimidating club format.

For now, the fitness industry is offering a clear signal: consumer spending remains strong but it is increasingly divided. The ability of companies to cater to different segments of the market and adapt to changing consumer preferences will be crucial for success in the years ahead.

Looking Ahead: Monitoring Consumer Resilience

The coming months will be critical for assessing the sustainability of these trends. Investors will be closely monitoring Planet Fitness’ performance, particularly its ability to maintain membership growth and successfully implement its planned price increases and amenity upgrades. Life Time will be watched for any signs of slowing demand among its affluent customer base. The diverging fortunes of these two gym operators serve as a stark reminder of the uneven nature of the current economic recovery and the challenges facing consumers across different income levels.