Why Members' Club Operator Soho House's Shares Are Plunging Today

Soho House & Co Inc SHCO reported third-quarter FY23 sales growth of 13.1% year-on-year to $301 million, missing the analyst consensus estimate of $306.256 million.

Membership revenues of $93.3 million increased by 31.3% year-over-year, accounting for 31.0% of total revenues.

In-House revenues increased 6.3% to $115.3 million, and Revenue Per Available Room (RevPAR) grew 6% year-over-year on a like-for-like basis.

Total Members in the third quarter grew by 20.8% Y/Y to 255,252. Soho House Members climbed 21.3% Y/Y to 184,542.

The operating loss for the quarter was $(20.4) million compared to a loss of $(70.6) million last year.

Adjusted EBITDA more than doubled to $42.1 million with an adjusted EBITA margin of 14%.

EPS of $(0.22) missed the consensus estimate of $(0.10).

The company held $163 million in cash and equivalents as of September 30, 2023.

The company appointed Tom Collins, previously Soho House & Co.'s UK, Europe and Asia Managing Director, as its Chief Operating Officer effective November 1, 2023.

Outlook: Shoho narrowed its FY23 revenue forecast to $1.13 billion - $1.16 billion (previously $1.12 billion - $1.19 billion) versus the consensus of $1.17 billion.

The company sees FY23 membership revenue of $361 million - $366 million (previously $360 million - $367 million).

SHCO expects Adjusted EBITDA of $130 million - $135 million (previously $126 million - $134 million).

The company expects year-end 2024 membership guidance to exceed 210,000 Soho House members.

Price Action: SHCO shares are trading lower by 14.17% at $6.99 in on the last check Friday.