TSOH Weekly Roundup (05/15/26)
Welcome to the TSOH Weekly Roundup, which is sent out each Friday at 11am ET. Each update features a Chart of the Week and a brief discussion on three news items that are relevant to the TSOH investable universe.
Chart Of The Week
From the conclusion of the Planet Fitness (PLNT) initiation (April 2026):
“While management set optimistic growth targets at the Investor Day, most notably a mid-teens adjusted EBITDA CAGR over the next three years (through FY28), they then guided to ~10% FY26 EBITDA growth in February. I find that to be a good summation of my early takeaways on Planet Fitness: they have pulled a number of levers over the past 10-15 years to drive better financials, but I suspect there’s less low hanging fruit left to be picked. The road ahead will likely feature heightened HVLP gym competition and less room to take price. If that proves accurate, I’ll be interested to see how Mr. Market responds as the financials start lagging management’s targets.”
Planet Fitness reported soft Q1 FY26 results last week, with a cut to FY26e EBITDA (from +10% to +6%) that suggests much slower growth than the aforementioned medium-term targets set at Investor Day. In response, Mr. Market continued to pressure the stock, which has declined by >50% YTD.
Three Notable Items
While my investment in Match Group was a relatively brief one, I remain interested in trying to understand what is happening in the online dating industry, most notably at Match and Bumble. This FT article focuses on CEO Spencer Rascoff’s plan to stem years of MAU and Payers pressure at Tinder.
“Rascoff said the issues at Tinder stemmed from its failure to listen to customers and to innovate after its initial success with swipe-based matching. ‘The company took off and it became so big and so profitable so quickly that Tinder didn’t build an innovation muscle that stayed attuned to consumer tastes. Meanwhile, consumer tastes changed quite a bit over the last five years, in particular among female users who no longer appreciated the kind of quick-twitch gamified swipe mechanic of Tinder,’ Rascoff added.”
“Vital Farms Falls on Plan to Wind Down Butter Business”
While management just took a hatchet to FY26 guidance, I’m personally encouraged by their decision to exit the butter business and to greatly slow their CapEx spend / volume expansion. The caution expressed in “Vital Farms: Fragility” has proven appropriate in the near term, with the stock down another >50% since it was published in early March. At this time, the conclusions I shared in that update remains an accurate summation of my views on the stock. (Note that management did start the buyback, with ~$20 million repurchased in Q1 FY26… but at an average cost of $20.0 per share.)
CEO Russell Diez-Canseco: “The anticipated changes in industry pricing and promotional dynamics in the outdoor access egg subcategory had a much greater impact on our velocities than we expected. We are acting with urgency to restore volume growth by narrowing price gaps versus other outdoor access eggs... We are streamlining our cost structure and reducing our CapEx this year to better align our operating model with the current environment. To be clear: this is a reset of the year, not a reset of ambition… We believe the core fundamentals of the Vital Farms business remain intact.”
“How AB InBev Stopped Its Three-Year Slide”
While ABI isn’t a company that I’ve initiated coverage on at TSOH, this brief article touches on the industry volume pressures and changing consumer preferences also impacting companies like Boston Beer and Brown-Forman.
“Anheuser-Busch InBev reported organic volume growth of 0.8% in Q1 FY26, the first such increase since early 2023, defying downward trends in alcohol consumption… Michelob Ultra has benefited from AB InBev’s consistent positioning of the brand as part of a healthy, active lifestyle. The company spends more marketing Michelob Ultra in the U.S. than any other product.”
TSOH Updates
Here’s the updated TSOH research list for the past six months:
Monday’s research report will be an update on Airbnb (ABNB).
Have a great weekend!
NOTE - This is not investment advice. Do your own due diligence.
I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.