By Isnaini Azizah 
The latest quarterly earnings reports from Life Time Group Holdings and Planet Fitness have provided a stark window into the bifurcated state of the American consumer. While both fitness giants reported strong headline growth, their underlying metrics and forward-looking guidance paint a picture of an economy moving in two different directions. This phenomenon, often referred to by economists as a "K-shaped" recovery or economy, describes a landscape where high-income households continue to flourish and spend aggressively, while lower- and middle-income tiers face mounting pressure, leading to more cautious discretionary choices.
For investors and analysts, the fitness industry serves as a high-fidelity barometer for consumer health. Because gym memberships are recurring but technically discretionary, they are often among the first items to be scrutinized when a household budget tightens. However, the definition of "discretionary" appears to be evolving differently across the socio-economic spectrum. For the affluent, health and wellness have transitioned from a luxury to a non-negotiable lifestyle component. For the price-sensitive, the gym remains a value-driven utility that must compete with the rising costs of groceries, rent, and utilities.
Life Time: The Resiliency of Premium Wellness
Life Time Group Holdings, which positions itself as a "luxury athletic country club" rather than a traditional gym, reported fourth-quarter results that exceeded expectations and signaled robust health among its target demographic. The company’s total revenue surged 12.3% year-over-year to $745.1 million, a testament to the spending power of its affluent membership base. Unlike budget-friendly competitors, Life Time operates sprawling, high-end facilities that feature indoor and outdoor pools, tennis and pickleball courts, expansive co-working spaces, and full-service spas and cafes.
The company’s ability to push through significant price increases without seeing a drop in retention is perhaps the most telling indicator of its customers’ financial insulation. Over the past year, Life Time increased its monthly dues by roughly $10 to $30 per member. In many industries, such a sharp hike would trigger a wave of cancellations. Instead, Life Time saw membership levels and engagement metrics continue to climb. CFO Erik Weaver attributed this success to "continued execution in our centers," noting that members are not only paying higher base fees but are also spending more once they walk through the doors.
In-center revenue, which includes spending at the LifeCafe, LifeSpa, and on personal training sessions, reached a staggering $191 million in the fourth quarter. The average revenue per center membership rose 10.8% to $882. This "lifestyle destination" model creates a sticky ecosystem where the club becomes a central hub for the member’s social and professional life. CEO Bahram Akradi emphasized that the company is moving away from the "non-use" membership model—where gyms profit from people who pay but never show up—toward a "high-engagement" model. When members utilize the club for multiple hours a day for various needs, the perceived value remains high even as prices rise.
Mizuho analyst John Baumgartner noted that Life Time’s model proved its resilience throughout a "macro-challenged 2025." He suggested that the downside risks for the company are limited because its membership skew favors high-income households who view wellness as a top priority. This segment of the population has benefited from a strong stock market and rising home equity, allowing them to absorb inflationary pressures that have crippled the purchasing power of others.
Planet Fitness: The Struggle of the Value-Conscious Consumer
On the other side of the "K" is Planet Fitness, the industry leader in the high-volume, low-price (HVLP) segment. On the surface, Planet Fitness’ numbers looked impressive: the company added 1.1 million new members in 2025 and reported double-digit revenue growth. However, the stock market’s reaction was decidedly negative, driven by a 2026 outlook that suggested a cooling of the red-hot growth the company enjoyed during the post-pandemic fitness boom.
Planet Fitness projected fiscal 2026 revenue growth of approximately 9%, with same-store sales expected to land between 4% and 5%. These figures fell short of Wall Street’s more ambitious targets, sparking concerns that the "value" consumer is finally hitting a wall. CFO Jay Stasz pointed to external factors, such as extreme winter weather in January, as a primary reason for a temporary dip in join trends and a slightly higher-than-expected cancellation rate. While the company maintains that attrition trends are returning to normal, the sensitivity of its member base to economic and environmental factors is a sharp contrast to Life Time’s stability.
The company is currently in a delicate transition period. For decades, Planet Fitness was famous for its $10-a-month base membership. However, as operating costs for franchisees have risen, the company has begun testing a price increase to $15 in several markets, with a full rollout expected by the summer of 2026. This move is a necessity for margin protection but carries the risk of alienating a customer base that is already feeling the pinch of a three-year inflationary cycle. To justify the higher costs, Planet Fitness is investing in "New Member Wellness" initiatives, including red-light therapy, cryotherapy, and enhanced small-group training.
Stifel analyst Chris Cull highlighted a "credibility hurdle" facing the company. Investors are questioning whether the 2026 guidance is intentionally conservative or if the company’s long-term targets are becoming unrealistic in a cooling economy. Until Planet Fitness can demonstrate that it can successfully raise prices without losing its "Judgement Free Zone" appeal to the masses, its stock may continue to face volatility.
The Macroeconomic Context: A Wider Divide
The divergence between Life Time and Planet Fitness is not an isolated incident; it is a reflection of a broader structural shift in the American economy. Across various sectors, companies are finding that the "middle" is disappearing, leaving a market split between premium luxury and aggressive value.
In the travel industry, airlines like Delta and United are reporting record-breaking demand for first-class and "premium economy" cabins. High-income travelers are willing to pay thousands of dollars for extra comfort, seemingly unaffected by higher ticket prices. Conversely, low-cost carriers are struggling with overcapacity and a price-sensitive consumer who is increasingly looking for the absolute lowest fare or opting to stay home.
The restaurant industry shows a similar split. Fast-food giants like McDonald’s, Burger King, and Wendy’s have been forced to launch aggressive "value meals" to lure back lower-income diners who had begun to find fast food too expensive. Meanwhile, high-end dining establishments and "experiential" restaurant groups continue to see strong bookings and high average checks.
This K-shaped reality is driven by several factors. While the labor market has remained relatively strong, wage growth for lower-income workers has struggled to keep pace with the cumulative inflation of the last few years. Additionally, the expiration of pandemic-era savings and the return of student loan payments have hit middle- and lower-income households harder. In contrast, the top 10% to 20% of earners have seen their net worth swell due to the appreciation of assets like housing and equities, creating a "wealth effect" that fuels continued discretionary spending.
Strategic Divergence and the Path to 2026
As we look toward the remainder of 2025 and into 2026, the two gym operators are doubling down on their respective ends of the K-shape. Life Time is focusing on geographic expansion into affluent suburbs and high-end urban developments, betting that its "all-in-one" lifestyle offering will continue to capture a larger share of the affluent wallet. By integrating co-working (Life Time Work) and even luxury residential units (Life Time Living) into its ecosystem, the company is making itself an indispensable part of its members’ lives.
Planet Fitness, meanwhile, is leaning into the "Gen Z" demographic and the "wellness-for-all" movement. Its "High School Summer Pass" program has been a successful funnel for bringing in younger members, who the company hopes will become lifelong subscribers. The challenge for Planet Fitness will be managing its franchisee relationships. Franchisees are facing higher construction costs for new clubs and higher interest rates on the debt used to fund them. If same-store sales growth remains in the 4% to 5% range, the pace of new club openings—a key driver of corporate revenue—could slow down.
William Blair analyst Sharon Zackfia remains optimistic about Planet Fitness’ long-term prospects, citing its "industry-leading low-price/non-intimidating club format" as a structural advantage. Even if member growth slows to 800,000 annually from the previously projected 1 million, the brand’s massive scale provides a defensive moat that smaller regional players cannot match.
Conclusion: A Signal for the Broader Market
The story of Life Time and Planet Fitness is a microcosm of the current American experience. It suggests that while the "aggregate" economy looks stable, the individual experiences of consumers are radically different depending on their income bracket. For Life Time, the wind is at its back, supported by a demographic that views health as the ultimate status symbol. For Planet Fitness, the path is more arduous, requiring a careful balancing act between price hikes and volume growth.
As 2026 approaches, the fitness industry will continue to serve as a vital indicator. If Planet Fitness manages to successfully transition its base to a $15 price point without a mass exodus, it will signal that the lower-income consumer still has some resilience left. If Life Time’s in-center spending begins to plateau, it may be the first sign that even the wealthy are starting to feel the chill of a prolonged high-interest-rate environment. For now, the signal is clear: the U.S. consumer is not a monolith, and the "K" is only widening.