Experience Amazing at your Lexus dealer.
>> LIZ: IT’S STILL KIND OF A
JUMP BALL FOR THE FUTURE OF
FITNESS.
THE PLAYERS ON THE COURT,
WORKOUT FROM HOME SUPERSTAR
PELOTON, BUT IF YOU LOOK WHAT
IT’S DONE, YOU CAN SEE THAT ONE
YEAR AGO, SINCE THEN, THE STOCK
HAS MOVED HIGHER BY ABOUT 24.9%.
NOW IN THE PAST 52 WEEKS,
DESPITE MASSIVE GAINS IN THE
EARLY DAYS OF THE PANDEMIC
VERSUS BRICK AND MORTAR GYM
GIANT, IT IS GETTING BEATEN OUT
BY PLANET FITNESS, UP 28% YEAR
OVER YEAR.
AS AMERICANS LOOK AT THEIR
SITUATION AND SAY YOU KNOW WHAT,
I’M SO OVER MY LIVING ROOM.
I’M JOGGING BACK TO THE GYM.
WE ARE NOW FACED WITH THE DELTA
VARIANT NOW IN PLAY.
COULD THIS FIGHT FOR THE FUTURE
FITNESS TURN UPSIDE DOWN ONCE
AGAIN?
LET’S BRING IN CLASS PASS, A
SERVICE THAT’S BEEN HELPING FILL
EMPTY SPOTS IN GYM AND WORKOUT
STUDIOS AND CLASSES SINCE 2013.
IT’S A HUGE BUSINESS.
IT’S ALSO HELPED PEOPLE
TRANSITION TO AT-HOME WORKOUTS
DURING THE LOCKDOWNS.
THE CEO HERE NOW IN A FOX
BUSINESS EXCLUSIVE TO HELP US I
GUESS PLAY REFEREE IN THIS
BATTLE.
FRITZ, YOUR COMPANY COULD REALLY
TIP THE SCALES HERE.
TELL US WHAT YOU ARE SEEING WHEN
IT COMES TO FILLING EMPTY SPOTS
IN GROUP FITNESS CLASSES RIGHT
NOW.
>> THE LAST FEW MONTHS HAVE BEEN
SUPER PROMISING.
OBVIOUSLY, YOU KNOW, WHERE THE
OUTBREAK IS HIRE OR WHERE A
VACCINATION UP TAKE IS LOWER,
THERE’S A LITTLE BIT LESS
ENTHUSIASM, BUT ONCE OUR
CUSTOMERS GO BACK TO ONE WORKOUT
AT A STUDIO OR A GYM, THEY GO
BACK ACTUALLY AT 10% MORE THAN
THEY WERE PRE-PANDEMIC.
WE’RE SEEING REALLY STRONG
REBOUNDS.
THE LAST TIME WE SPOKE, THE VAST
MAJORITY OF OUR CUSTOMERS HAD
FROZEN THEIR CLASS PASS
MEMBERSHIPS.
NOW, OVER 90% ARE ACTIVE
SUBSCRIBERS.
THEY ARE GOING BACK TO CLASS.
SO, YOU KNOW, REALLY I THINK IT
IS JUST A MATTER OF TIME.
WHAT WE’RE SEEING IS THAT THE
DEMAND IS THERE, AND IT’S
INCREDIBLY RESILIENT.
WHEN OUTBREAKS GET REALLY HIGH,
AT THE HYPER LOCAL LEVEL, YOU
SEE MORE HESITATION, AND -- BUT
AS VACCINATIONS CONTINUE TO GET
HIGH, AND OUR MEMBERSHIP IS
INCREDIBLY HIGHLY VACCINATED, WE
ARE SEEING THAT COMFORT TO GET
BACK TO CLASS AND GET BACK TO IN
PERSON EXPERIENCES WITH NINE OUT
OF TEN OF THE TOP EXPERIENCES ON
CLASS PASS BEING FOR IN-PERSON
EXPERIENCES AND APPOINTMENTS.
>> LIZ: YOU GUYS WORK WITH A LOT
OF DIFFERENT STUDIOS EVERYTHING
FROM CYCLE BAR TO RUMBLE TO BOOT
CAMPS, ARE THERE SPECIFIC AREAS
OF THE COUNTRY OR SPECIFIC TYPES
OFS ARE -- SPECIFIC TYPES OF
CLASSES ARE PEOPLE ARE MORE
COMFORTABLE TO START TO TRICKLE
BACK INTO THE CLASSES AND GET A
FULL-FLEDGED WORKOUT?
>> THAT’S A GREAT QUESTION.
ON THE GENRE SIDE, CLASSES THAT
REQUIRE SPECIALIZED EQUIPMENT,
INSTEAD OF SOMETHING YOU CAN DO
IN YOUR LIVING ROOM HAVE EXTRA
ADDED APPEAL.
THE ONES THAT REQUIRE A GROUP,
IMMERSEIVE SENSE OF COMMUNITY,
THINGS THAT HAVE INSTRUCTOR.
80% SAY THEY PUSH THEMSELVES
HARDER IN CLASS THAN WORKING OUT
IN ALONE.
75% PREFER THE INSTRUCTOR AND
ENCOURAGEMENT AND
ACCOUNTABILITY.
TWO THIRDS SAY ACCESS TO THE
EQUIPMENT, THE SPECIALIZED GEAR
YOU GET FROM OUR PARTNERS,
THINGS LIKE PILATES, BOXING,
ROWING, THAT’S REALLY HARD TO DO
AT HOME AND HARD TO HAVE A
BUNCH -- A LOT OF PEOPLE HAVE A
PELOTON.
IT IS KIND OF HARD TO START
HAVING, YOU KNOW, YOUR OWN
STUDIO WITH MANY DIFFERENT TYPES
OF THINGS.
>> LIZ: FRITZ, YOU’RE WORKING
WITH THE DEPARTMENT OF TOURISM
IN SINGAPORE.
YOU GUYS ARE GLOBAL AT THIS
POINT.
SINGAPORE WAS PARTICULARLY VERY
STRICT WHEN IT CAME TO THINGS
LIKE VACCINATION, MASKING, ETC.,
AND LOCKDOWNS.
WHAT ARE YOU HEARING OVERALL
ABOUT COVID AND ABOUT
VACCINATIONS WHEN IT COMES TO
REQUIREMENTS AT THESE CLASSES?
>> SUPER INTERESTING QUESTION.
SO YEAH, FIRST OF ALL, WE’RE
REALLY EXCITED TO BE PARTNERING
WITH THE SINGAPORE TOURISM
BOARD.
ANYTHING THAT ENCOURAGES PEOPLE
TO GET BACK TO THESE LOCAL
EXPERIENCES AND DRIVE MORE
REVENUE TO THESE LOCAL
BUSINESSES THAT HAVE BEEN
SUFFERING IS A MASSIVE WIN.
SINGAPORE AND A LOT OF EAST
ASIAN COUNTRIES HAVE DONE A
PRETTY GOOD JOB.
THEY HAVE TAKEN A MORE HARD CORE
APPROACH AS YOU ALLUDED WITH
LOCKDOWNS AND REQUIREMENTS.
AND THE STATS THAT WE HAVE IS
THE GOOD NEWS IS OUR CUSTOMERS,
THEY WANT TO GO BACK TO IN
PERSON.
CERTAINLY THERE’S A HUGE DIGITAL
BUSINESS.
WE HAVE DIGITAL, YOU KNOW, STUFF
AS WELL.
YOU ALLUDED TO PELOTON, AWESOME
BUSINESS.
OUR CUSTOMER IS DIFFERENT.
THEY REALLY PREFER THESE
IN-PERSON EXPERIENCES, AND THEY
GO RIGHT BACK.
THEY ARE ALSO HEAVILY
VACCINATED.
OVER 91% OF OUR CUSTOMERS ARE
FULLY VACCINATED.
A FEW PERCENT MORE ARE PARTIALLY
OR IN THE PROCESS OF GETTING
FULLY VACCINATED.
37% OF THOSE CUSTOMERS WILL ONLY
GO BACK IF THERE’S VACCINE
REQUIREMENTS.
I WILL SAY THERE’S LESS
ENTHUSIASM FOR MASKING.
YOU KNOW, 27% SAY THEY WON’T
ATTEND A CLASS IF THERE’S MASK
REQUIREMENTS.
SO, YOU KNOW, THERE’S DIFFERENT
RESTRICTIONS WHICH HAVE
DIFFERENT EFFECTS.
I THINK WE FEEL PRETTY GOOD THAT
WHEN OUR PARTNERS DECIDE TO CALL
FOR A VACCINE MANDATE, THAT’S
GOOD FOR THE INDUSTRY REGARDLESS
OF ONE’S, YOU KNOW, POLITICAL
BELIEFS OR WHATEVER.
THAT’S WHAT CUSTOMERS WANT AND
THAT WILL MAKE THEM FEEL SAFE
WORKING OUT.
>> LIZ: YEAH, I FOR ONE IS DYING
TO GET BACK TO BARRY’S BOOT CAMP