Planet Fitness (NYSE:PLNT) shares plunged Friday after news the company's board ousted veteran Chris Rondeau from his post as chief executive.
Shares of the fitness center operator and franchisor plunged 15% on the news.
Planet Fitness said Craig Benson, a member of the company's board, has been appointed Interim Chief Executive Officer, effective immediately.
Rondeau will continue to serve as a member of the board and will be nominated for re-election at PLNT's 2024 annual meeting, while the company added in its statement that Rondeau will continue to serve in an advisory role to help ensure a smooth transition.
"As we enter the next chapter of Planet Fitness' journey, the Board felt that now was the right time to transition leadership," said Stephen Spinelli, Jr., chairman of the Planet Fitness board.
The company said it is searching for its next CEO both internally and externally.
The CEO's departure is a sudden move, and it is not yet clear what triggered the decision. However, following the announcement, TD Cowen analysts downgraded PLNT to Market Perform, with a price target of $55, down from $72 per share.
The analysts said PLNT is the fitness industry's leader, but they now expect shares to remain range-bound until a new CEO is named and an updated growth strategy is adopted. "The departure increases uncertainty around franchise health, opening outlook, and competitive position," they wrote.