How the ‘K-shaped’ economy is showing up at two big U.S. gyms

Two of the largest U.S. gymnasium operators delivered the similar headline of their newest earnings reviews: robust progress.

However beneath the floor, Life Time Group Holdings and Planet Health instructed very totally different tales about the American client. They highlighted a widening divide between higher-income households that proceed to spend freely and extra price-sensitive customers who’re starting to point out indicators of pressure.

Each corporations reported double-digit share income progress, rising memberships and increasing footprints in 2025. Their respective outlooks for 2026, nonetheless, level to a “Ok-shaped” economy, a time period used to explain a cut up in spending developments between greater and lower-income teams. Here is what we realized.

Life Time’s earnings bolstered that prosperous Individuals are nonetheless shelling out, particularly on their well being and wellness.

In the fourth quarter, the firm’s whole income rose 12.3% yr over yr to $745.1 million. CFO Erik Weaver attributed the improve to “continued execution in our facilities,” together with greater common dues and stronger utilization of in-center companies.

The corporate, which operates large-format health golf equipment with facilities like swimming pools, spas and cafes, elevated membership dues final yr by roughly $10 to $30 per member. The change didn’t sluggish demand — membership and engagement have continued to climb.

A rising share of Life Time’s income is coming from in-center spending, which topped $191 million in the fourth quarter. Members are taking full benefit of further private coaching, spa providers and meals and beverage as they deal with the area as a way of life vacation spot.

Common income per middle membership was $882, up 10.8%. 

“It is a brilliant engaged membership mannequin as an alternative of a non-use membership mannequin,” stated Life Time Group Holdings CEO Bahram Akradi. “We’re mainly working at optimum ranges of that proper now.”

Regardless of having far fewer places than Planet Health, the firm generates considerably extra income, underscoring the greater spending energy of its buyer base.

“The mannequin proved its resilience all through a macro-challenged 2025 during which in-center income grew,” stated Mizuho analyst John Baumgartner. “And see draw back dangers restricted by a memberships skew favoring high-income households and differentiated membership actions.”

The outcomes recommend higher-income customers stay comparatively insulated from broader financial pressures and proceed prioritizing discretionary wellness spending.

Planet Health additionally reported robust progress, including 1.1 million new members in 2025 and delivering double-digit share income positive aspects.

Buyers, nonetheless, targeted on its outlook, which fell wanting Wall Road expectations. The corporate projected slower fiscal 2026 income progress of 9% and weaker same-store gross sales than anticipated at 4% to five%, which raised demand considerations.

Nevertheless, Planet Health remained constructive about progress, saying the anticipated pullback in membership was momentary.

“Our be a part of developments have been impacted by the storms and chilly climate in late January throughout a lot of our markets, and we skilled a barely greater cancel fee final month than anticipated,” stated Planet Health CFO Jay Stasz. “Notably, latest attrition developments are returning in step with our expectations.”

Planet Health has additionally been testing value hikes in some markets, which it expects to totally roll out in summer season 2026. It is also investing in new facilities like pink gentle remedy and extra courses to extend income per member and appeal to youthful members.

That technique may assist long-term progress, however some analysts are skeptical, saying the “steerage hole” between Planet Health’ outcomes and Wall Road expectations is notably irritating.

“The corporate now faces a credibility hurdle,” stated Stifel analyst Chris Cull. “Is 2026 steerage conservative, or are the out-year targets unrealistic? Till the firm supplies a clearer path to acceleration, we anticipate the inventory will probably churn.”

A softened 2026 outlook prompt some uncertainty about how a lot additional its core prospects can stretch their spending.

Collectively the outcomes spotlight a broader shift in the U.S. economy.

Increased-income customers, mirrored in Life Time’s efficiency, proceed to soak up value will increase and spend on premium experiences. In the meantime, Planet Health recommend although price-sensitive prospects are engaged, they’re extra reluctant to spend.

That is not an issue distinctive to health and has appeared throughout industries. Airways are racing to construct out luxurious choices as higher-income vacationers proceed to spend. In the meantime, fast-food corporations are leaning on worth meals to draw extra price-sensitive prospects, reinforcing the concept of a Ok-shaped economy.

Planet Health’ efficiency in the coming quarters may function an indicator of how a lot discretionary spending capability stays for lower- and middle-income customers.

William Blair analyst Sharon Zackfia lowered her agency’s projections for Planet Health’ 2026 member progress to 800,000 from 1 million given projected weak point in the first quarter, which usually accounts for 60% of full-year sign-ups. Nonetheless, the steerage didn’t dampen the agency’s optimism about the firm.

“We reiterate our Outperform score and proceed to view the model’s long-term outlook as sturdy given its industry-leading low-price/non-intimidating membership format,” stated Zackfia.

For now the health {industry} is providing a transparent sign: Client spending stays robust, however is more and more divided.