The Gym Group PLC's (LSE:GYM) latest trading update has reinforced the investment case that the low-cost operator is emerging from a difficult consumer backdrop with momentum, scale and renewed financial flexibility.
The group said full-year earnings are now expected to come in slightly above the top end of market forecasts, helped by tighter control of costs such as utilities and business rates, alongside steady like-for-like growth.
Revenue rose 8% to £244.9 million, with like-for-like sales up 3%, a pace maintained from the first half and driven largely by pricing rather than volume.
Membership continued to edge higher. Average members increased 4% to 945,000, while average revenue per member per month rose 4% to £21.60. That pricing uplift, delivered without a hit to demand, points to what analysts see as a clear value gap versus competitors in a still price-sensitive market.
Crucially, the group also lifted its ambition on expansion. Sixteen sites were opened during the year, in line with guidance, but management now plans to accelerate openings to around 20 in 2026 and roughly 75 over the next three years.
A new £10 million share buyback adds to the sense of balance sheet comfort.
Deutsche raised its target price to 210p, arguing Gym Group remains one of the few consumer-facing businesses with visible compounding potential.
Jefferies also reiterated a 'buy' rating, saying upgraded guidance, faster openings and capital returns should support a re-rating from current valuation levels.
The shares were up 1.5% at 163.46p.