Soho House Shares Gain As Q2 Earnings Exceed Estimates Helped By Strong Membership Revenues

Soho House & Co Inc SHCO reported second-quarter FY23 sales growth of 18.5% year-on-year to $288.92 million, beating the analyst consensus of $285.18 million.

Membership revenues increased 35.4% to $89.2 million, accounting for 30.9% of total revenues. In-House revenues grew 14.4% to $125.5 million.

Total members climbed 28.3% Y/Y to 248,071. SHCO membership waitlist sits at an all-time high of approximately 95,000.

Operating income for the quarter totaled $19.6 million with an operating margin of 6.7%.

Adjusted EBITDA increased 106.4% to $31.7 million, and the margin expanded 500 basis points to 11%.

EPS of $(0.01) beat the analyst consensus of $(0.12).

Soho held $177 million in cash and equivalents as of July 2, 2023.

The company plans to open new Soho Houses in Mexico City, Portland, and Sao Paulo through the end of the year, while Manchester has been delayed until 2024.

Outlook: Soho narrowed its FY23 revenue outlook from $1.1 billion - $1.2 billion to $1.12 billion - $1.19 billion versus the consensus of $1.17 billion.

It raised adjusted EBITDA guidance from $122 million - $132 million to $126 million - $134 million.

Price Action: SHCO shares are trading higher by 15.4% at $7.07 on the last check Friday.