On August 9, 2024, Soho House & Co Inc (NYSE: SHCO) released its 8-K filing for the second quarter ended June 30, 2024. Soho House & Co Inc is a membership platform of physical and digital spaces that connects a vibrant, diverse group of members from across the world. The company offers lease agreement Houses, hotels, restaurants, studios, spas, and other properties, with the majority of its revenue generated from the North America segment.
Performance Overview
Soho House & Co Inc reported total revenues of $305.1 million for Q2 2024, surpassing the analyst estimate of $302.87 million and reflecting a 5.6% year-over-year growth. However, the company posted a net loss attributable to SHCO of $33.9 million or $0.17 per share, missing the estimated earnings per share (EPS) of -$0.11. The net loss was predominantly impacted by $27 million higher non-cash foreign exchange (FX) losses.
Membership and Revenue Growth
Membership continues to be a strong driver for Soho House & Co Inc, with total members growing to 264,540 in Q2 2024, up from 261,571 in Q1 2024 and representing a 6.6% year-over-year increase. Soho House members specifically grew to 204,028 from 198,021 in Q1 2024, marking a 16% year-over-year growth. The membership waitlist now sits at approximately 111,000, an all-time high.
Membership revenues increased by 16.1% year-over-year to $103.6 million, accounting for 33.9% of total revenues. In-House revenues also saw a slight increase to $128.4 million, up $2.9 million year-over-year, although Revenue Per Available Room (RevPAR) remained flat on a like-for-like basis.
Financial Achievements and Challenges
Despite the net loss, Soho House & Co Inc achieved an Adjusted EBITDA of $33.3 million, up $1.6 million from Q2 2023. The Adjusted EBITDA margin remained steady at 11%. The company also opened Soho House Sao Paulo and Scorpios Bodrum during the quarter, contributing to its expanding global footprint.
"Our second quarter results reflect the strong appeal of Soho House globally, with Soho House membership growing 16% year-on-year and our waitlist increasing to approximately 111,000. We opened Soho House Sao Paulo with great feedback from members, and have continued to see significant demand for other recent openings including Mexico City and Portland. These positive membership trends have led us to raise our outlook for membership for the full year,” said Andrew Carnie, CEO of Soho House & Co.
Income Statement Highlights
| For the 13 Weeks Ended | June 30, 2024 | July 2, 2023 |
|---|---|---|
| Total revenues | $305,146 | $288,923 |
| Membership revenues | $103,584 | $89,193 |
| In-House revenues | $128,352 | $125,480 |
| Net income (loss) attributable to SHCO | $(33,869) | $(2,644) |
| Adjusted EBITDA | $33,349 | $31,756 |
| Basic and diluted income (loss) per share | $(0.17) | $(0.01) |
Balance Sheet and Cash Flow
As of June 30, 2024, Soho House & Co Inc had cash and cash equivalents and restricted cash totaling $154 million. The company repurchased 891,045 shares for $5 million during the second quarter.
Analysis and Outlook
Soho House & Co Inc's performance in Q2 2024 highlights the company's strong membership growth and revenue increase, driven by its expanding global presence and high member retention rates. However, the higher non-cash FX losses have impacted the net income, posing a challenge for the company. The steady growth in Adjusted EBITDA and the opening of new Houses indicate a positive outlook for the company's future performance.
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Explore the complete 8-K earnings release (here) from Soho House & Co Inc for further details.
