Release Date: December 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Membership revenues increased by 17% year-on-year, reflecting strong demand and growth in membership.
- Total revenues grew 14% year-on-year to $333 million, driven by increases in recurring membership revenues and other revenues.
- Adjusted EBITDA grew 38% year-on-year to $48 million, indicating improved profitability.
- Net income turned positive in the quarter, up from a negative $49 million in the third quarter of the previous year.
- The company continues to expand its global presence with new house openings, contributing to membership growth and enhanced member experiences.
Negative Points
- The company lowered its total revenue guidance to the low end of the previous range due to weaker-than-expected demand in food and beverage and accommodation revenue.
- Adjusted EBITDA guidance was cut to approximately $140 million, down from the previous range of $157 million to $165 million.
- The company faced operational challenges, including costs associated with ERP implementation and restructuring, impacting short-term financial performance.
- North America experienced weaker like-for-like sales growth, particularly in October, due to macroeconomic factors.
- The company had to revise prior financial statements due to misstatements from historical costs and revenue accounting errors.
Q & A Highlights
Q: Can you elaborate on the guidance change and the factors contributing to the $21 million reduction in EBITDA?
A: Thomas Allen, CFO: We are lowering total revenue guidance due to weaker-than-expected demand in food and beverage and accommodation revenue. About half of the EBITDA guidance change is due to unique factors that we do not expect to recur, such as flooding impacts and restructuring costs. The other half is related to ongoing costs associated with our Finance ERP and other financial consulting expenses.
Q: Could you provide more details on the geographical differences in like-for-like sales trends, particularly the weakness in October and improvement in November?
A: Andrew Carnie, CEO: In October, we saw a slowdown in the UK and the US due to macro events like the UK budget and US elections. However, both regions bounced back in November. Europe remained consistent, and Asia performed well. The weakness was primarily in the UK and USA.
Q: What is the strategy behind the opening of Mews House, and do you see opportunities for more elevated tiers of houses or memberships?
A: Andrew Carnie, CEO: Mews House has been a success, offering a more elevated experience in design and menu. We are considering expanding this concept to other locations, such as New York, and have plans for a similar venue in Ibiza next summer.
Q: Can you provide any updates or timelines regarding the strategic alternatives and the third-party consortium offer?
A: Thomas Allen, CFO: We are unable to comment on the offer or provide further details at this time, as it is a Board decision.
Q: Have you observed any positive trends in bookings or demand post-election, particularly in the US?
A: Andrew Carnie, CEO: Yes, we have seen an uptick in demand, especially for Q1 bookings, which look very strong. This indicates a positive outlook for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
