Soho House & (US:SHCO)2024-05-10 17:10Financial Data and Key Metrics Changes - Total revenues for Q1 2024 grew 3% year-on-year to $263 million, driven by a 20% increase in membership revenues, which accounted for 38% of total revenue [21][19][25] - Adjusted EBITDA for Q1 was $19.3 million, slightly lower year-on-year, but higher than market expectations [15][27] - Cash and cash equivalents at the end of the quarter were $145 million, with net debt at $664 million, reflecting a reduction in net debt to EBITDA ratio from approximately 7x to 5x year-on-year [28][29] Business Line Data and Key Metrics Changes - Membership growth was significant, with over 4,000 new members added in the quarter, totaling 198,000 members, a 17% year-on-year increase [14][21] - In-house revenues decreased by $6 million year-on-year to $110 million, while other revenues fell by $3 million to $53 million [19][25] - House level contribution increased by 6% year-on-year, with house level margins rising to 25% [25] Market Data and Key Metrics Changes - RevPAR declined by 3% in the quarter, with U.S. leisure RevPAR estimated to be down approximately 4% [26] - The waitlist for membership grew to over 102,000, marking a 15% increase year-on-year, indicating strong demand [21] Company Strategy and Development Direction - The company is focused on enhancing membership value and operational excellence, with initiatives aimed at improving member experience and driving profitability [22][31] - New openings are progressing well, with strong demand noted in markets like Portland and Sao Paulo [23][24] - The company is investing in existing houses and launching new services, such as a gym in London [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving consumer behavior, noting that footfall trends are better than general market conditions, despite cautious spending [36] - The company anticipates stronger EBITDA performance as it moves into seasonally stronger quarters [15][27] Other Important Information - The company published its 2023 ESG report, highlighting sustainability efforts and social impact initiatives [31] - A new HR system is being rolled out globally to improve operational efficiency [24] Q&A Session Summary Question: Can you elaborate on the consumer behavior trends? - Management noted that while footfall is up, spending is down as members are being more cautious. However, trends have improved sequentially throughout the year [36] Question: Are there geographic differences in consumer behavior? - Management indicated no significant differences across regions, with consistent performance noted globally [37] Question: Can you provide details on in-house spending improvements? - In-house spending showed improvement from high-single digits down in January to low-single digits by April [41] Question: What insights have member surveys provided regarding spending? - Surveys indicated positive feedback overall, with a focus on improving member experience rather than addressing specific spending concerns [43] Question: Is there a regional improvement in member satisfaction scores? - North America showed marked improvement in member satisfaction, attributed to leadership changes and improvement initiatives [46] Question: What is the status of the Soho Friends membership base? - The decline in Soho Friends membership is a result of a strategic de-emphasis on that segment, focusing more on core Soho House members [47]