Soho House & Co Inc. (NYSE: SHCO) (“SHCO,” “Company,” “we”
or “our”), a global membership platform that connects a vibrant,
diverse, and global group of members, today announced results for
the second quarter ended June 30, 2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240808439259/en/
Soho House São Paulo. Photo: Christopher
Sturman (Photo: Business Wire)
Second Quarter 2024
Highlights
- Total Members in the second quarter 2024 grew to 264,540 from
261,571 in first quarter 2024 and by 6.6% year-over-year
- Soho House Members grew to 204,028 from 198,021 in first
quarter 2024, and 16% year-over-year
- SHCO Membership waitlist now sits at approximately 111,000, an
all-time high
- Total revenues of $305.1 million, 5.6% year-over-year
growth
- Membership revenues grew to $103.6 million, a 16.1% increase
year-over-year, accounting for 33.9% of Total revenues
- In-House revenues of $128.4 million, up $2.9 million
year-over-year
- Revenue Per Available Room (“RevPAR”) was flat year-over-year
on a like-for-like basis
- Net loss attributable to Soho House & Co Inc. was $33.9
million or $0.17 per share, predominantly impacted year-over-year
by $27m higher non-cash FX losses
- Adjusted EBITDA was $33.3 million, up $1.6 million from second
quarter 2023
- Opened Soho House Sao Paulo and Scorpios Bodrum in the
quarter
"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.
“Total revenues grew 6% in the second quarter, with underlying
In-House trends improving versus the first quarter. Our strategic
focus on operational efficiencies and delivering the best member
experience also drove strong Adjusted EBITDA growth.”
“I’d like to thank our teams for their passion and hard work,
and members around the world for their continued loyalty.”
Summary of Financial Results for the
Quarter Ended June 30, 2024
For the 13 Weeks Ended
(in thousands, except shares and per
share amount unless otherwise noted)
June 30, 2024
July 2, 2023
(Unaudited)
Total revenues
$
305,146
$
288,923
Membership revenues
103,584
89,193
In-House revenues
128,352
125,480
Other revenues
73,210
74,250
Operating income (loss)
(11,368
)
19,594
House-Level Contribution(1)
59,572
53,242
House-Level Contribution margin (%)(1)
27
%
26
%
Other Contribution(1)
14,290
17,102
Other contribution margin (%)(1)
17
%
21
%
Net income (loss) attributable to SHCO
(33,869
)
(2,644
)
Adjusted EBITDA(1)
33,349
31,756
Adjusted EBITDA margin (%)(1)
11
%
11
%
Weighted average Class A and Class B
Shares outstanding (basic)
196,258,003
195,662,198
Basic and diluted income (loss) per
share
$
(0.17
)
$
(0.01
)
(1)
See “Non-GAAP Financial Measures” for
reconciliations of Non-GAAP measures to GAAP measures.
The following selected items listed below are not added back in
Adjusted EBITDA:
For the 13 Weeks Ended
(in thousands)
June 30, 2024
July 2, 2023
(Unaudited)
Pre-opening expenses
5,652
$
4,206
Non-cash rent
4,118
2,105
Deferred registration fees, net
(465
)
(465
)
We delivered the following highlights
against our strategic priorities in the second
quarter
1. Grow and Enhance Membership
- Membership continues to reach new highs benefiting from a
record waitlist and continued high retention rates
- Soho House members grew to 204,028 from 198,021 in first
quarter 2024, and 16% YoY
- Focused rollout of initiatives continue to improve member
experience and service in our Houses, as illustrated by higher
member satisfaction scores
- Opened Soho House Sao Paulo and Scorpios Bodrum in June and
announced four upcoming Houses across Europe and Asia
2. Operational Excellence to Drive Profitability
- We achieved second quarter 2024 Adjusted EBITDA of $33.3
million, with Adjusted EBITDA margins of 11%
- Like-for-like Food & Beverage margins at our Houses
improved compared to the second quarter 2023, despite cost
inflation
- Further streamlined corporate support functions
Membership Summary for the Quarter
Ended June 30, 2024
As of
June 30, 2024
July 2, 2023
(Unaudited)
Total Members
264,540
248,071
Soho House
204,028
176,305
Frozen Members
10,203
3,411
Soho Friends
54,192
65,718
Soho Works
6,320
6,048
SH APP Active Users
209,732
182,502
As of
June 30, 2024
July 2, 2023
(Unaudited)
Number of Soho Houses
44
41
The Americas
17
14
United Kingdom
13
13
Europe/RoW
14
14
Number of Soho House Members
204,028
176,305
The Americas
76,826
64,163
United Kingdom
72,543
65,591
Europe/RoW
43,538
38,116
All Other
11,121
8,435
Number of Other Members
60,512
71,766
The Americas
16,338
19,707
United Kingdom
36,232
43,029
Europe/RoW
7,942
9,030
Number of Total Members
264,540
248,071
Number of Active App Users
209,732
182,502
Memberships
- Total Members grew to 264,540 from 261,571 in first
quarter 2024 and by 6.6% year-over-year
- Total Soho House Members grew to 204,028 from 198,021 in
first quarter 2024, driven by continued high retention rates,
alongside membership intakes in both new and existing Houses
- Frozen Members was 10,203 at the end of second quarter
2024
- Other Memberships including Soho Friends and Soho Works
was 60,512 members, a decrease of 3,038 from the end of the first
quarter 2024
Financing
- SHCO ended second quarter 2024 with Cash and cash equivalents
and Restricted cash of $154 million
- The Company repurchased 891,045 shares for $5 million during
the second quarter 2024
Updated Fiscal 2024 Guidance
The following forward-looking statements reflect our current
expectations as of today, August 09, 2024:
Old Fiscal 2024
Guidance
New Fiscal 2024
Guidance
Total Soho House Members
>210,000
>212,000
Membership revenues
$405m – $415m
$410m – $420m
Total revenues*
$1,200m – $1,250m
$1,200m – $1,250m
Adjusted EBITDA**
$157m – $165m
$157m – $165m
*Assumes no material year-over-year FX
impact, reflecting bank estimates
**Without adding back pre-opening costs,
non-cash rent and deferred registration fees of ~$25-30m combined
for fiscal 2024 as a whole
Conference Call and Webcast:
A conference call and live webcast will be hosted to discuss
these results on Friday, August 09, 2024 at 9am EST / 2pm BST.
A live broadcast and accompanying presentation will be available
at www.sohohouseco.com.
To listen to the live conference call via telephone, please
dial:
USA
New York (646) 307 1951 USA & Canada Toll-Free (888) 500
3691
UK
London +44 (0)20 8610 3526 UK Toll-Free +44 (0)800 524 4258
Conference ID 14378 A replay of the webcast will be available on
our website following the call for up to 90 days.
Non-GAAP Financial Measures
This presentation contains certain financial measures, including
Adjusted EBITDA, House-Level Contribution and Margin, Other
Contribution and Margin, Net Debt and certain financial measures
presented on a Constant Currency basis that are not required by, or
presented in accordance with, accounting principles generally
accepted in the United States of America (‘GAAP’). We refer to
these measures as ‘non-GAAP financial measures.’ We use these
non-GAAP financial measures when planning, monitoring and
evaluating our performance. While we believe that these non-GAAP
financial measures are useful in evaluating our business, this
information should be considered as supplemental in nature and is
not meant as a substitute for revenues or net income (loss), in
each case as recognized in accordance with GAAP. In addition, other
companies may calculate one or more of these measures differently,
which reduces the usefulness of any such measure as a comparative
measure. See below for a definition of these non-GAAP financial
measures and a reconciliation to the most directly comparable GAAP
financial measures.
We provide earnings guidance using both GAAP and non-GAAP
financial measures. A reconciliation of the Company’s Adjusted
EBITDA guidance to the most directly comparable GAAP financial
measure cannot be provided without unreasonable efforts and is not
provided herein because of the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliations, including adjustments that are made for future
changes in foreign exchange and the other adjustments reflected in
our reconciliation of historical non-GAAP financial measures, the
amounts of which, could be material.
The information in this presentation should be read in
conjunction with our Annual and Quarterly Reports on Form 10-K and
Form 10-Q and other information that we file with the SEC. The
reconciliations of non-GAAP financial measures are an integral part
of the information presented herein. You can access these documents
on our website, www.sohohouseco.com, free of charge, as well as any
amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act, as soon as reasonably
practicable after such material is electronically filed with, or
furnished to, the SEC. The information contained on our website is
not incorporated by reference into, and should not be considered a
part of, this presentation.
In addition, the SEC maintains a website that contains reports,
proxy and information statements, and other information regarding
issuers, including the Company, that file electronically with the
SEC at www.sec.gov.
The non-GAAP financial measures we use herein are defined by us
as follows:
ADJUSTED EBITDA. Adjusted EBITDA is a supplemental
measure of our performance. Adjusted EBITDA is defined as Net
income (loss) before Depreciation and amortization, Interest
expense, net, Income tax (expense) benefit, adjusted to take
account of the impact of certain non-cash and other items that we
do not consider in our evaluation of ongoing operating performance.
These other items include, but are not limited to, Gain (loss) on
sale of property and other, net, Share of loss (profit) from equity
method investments, Foreign exchange, Share of equity method
investments adjusted EBITDA, Share-based compensation expense,
impairment of intangible assets, and other applicable items. We
believe that Adjusted EBITDA is an appropriate measure of operating
performance because it eliminates the impact of expenses (income)
that do not relate to ongoing business performance.
HOUSE-LEVEL CONTRIBUTION AND MARGIN. House-Level
Contribution is defined as House Revenues less In-House operating
expenses, which includes expense items such as food and beverage
costs, labor costs, variable overheads and fixed costs, such as
rent. It does not reflect the impact of depreciation, amortization,
impairment, gain or loss on sale of property, general and
administrative expenses or other applicable items. House-Level
Contribution Margin is defined as House-Level Contribution as a
percentage of our House Revenues and is a key determinant of our
performance and profitability and our return on the investment we
make in each of our Houses. Given that all costs associated with
providing our members with the Soho House experience, including the
costs associated with maintaining our Houses and providing services
to members while in the Houses, are included in In-House operating
expenses, we use House Revenues (inclusive of House Membership
Revenues) in calculating House-Level Contribution and House-Level
Contribution Margin to assess the overall profitability of our
Houses. Accordingly, our management considers House-Level
Contribution and House-Level Contribution Margin to be an important
management measure to evaluate the performance of each House, and
growth in aggregate House-Level Contribution allows us to leverage
our general and administrative costs and improve overall
profitability.
OTHER CONTRIBUTION AND MARGIN. Other Contribution is
defined as Other revenues plus Non-House Membership Revenues less
Other operating expenses, which includes expense items not related
to the operation of Houses, such as labor costs, variable overheads
and fixed costs, such as rent. It does not reflect the impact of
depreciation, amortization, impairment, gain or loss on sale of
property, general and administrative expenses, pre-opening
expenses, foreign exchange gain/loss, Share-based compensation
expense and other applicable items. Other Contribution Margin
defined as Other Contribution as a percentage of our Other revenues
and is a key determinant of our performance and profitability and
our return on the investment in our non-House business. Our
management considers Other Contribution and Contribution Margin to
be an important management measure.
NET DEBT. Net Debt reflects the total debt, comprising
long-term debt, property mortgage loans and related party loans,
less cash, cash equivalents and restricted cash. Net Debt is an
important measure to monitor leverage and evaluate the balance
sheet. A limitation associated with using Net Debt is that it
subtracts Cash and cash equivalents and Restricted cash and
therefore may imply that there is less Company debt than the most
comparable GAAP measure indicates. Management believes that
investors may find it useful to monitor leverage and evaluate the
balance sheet.
CONSTANT CURRENCY. Some of our financial and operational
data that we disclose in this release is presented on a ‘constant
currency’ basis to isolate the effect of currency changes during
the period. Where we refer to a measure being calculated in
‘constant currency,’ we are calculating the dollar change and the
percentage change as if the exchange rate that is being used in the
current period was in effect for all prior periods presented. We
believe that this calculation provides a more meaningful indication
of actual year over year performance and eliminates any
fluctuations from currency exchange rates.
While we believe that these non-GAAP financial measures are
useful in evaluating our business, this information should be
considered as supplemental in nature and is not meant as a
substitute for revenues or net income (loss), in each case as
recognized in accordance with GAAP. In addition, other companies
may calculate one or more of these measures differently, which
reduces the usefulness of any such measure as a comparative
measure.
A reconciliation of Net income (loss) to Adjusted EBITDA for
the 13 weeks ending June 30, 2024 and July 2, 2023 is set forth
below:
For the 13 Weeks Ended
Percent Change
June 30, 2024
July 2, 2023
Actuals
Constant Currency(1)
Actuals
(Unaudited, dollar amounts in
thousands, except share and per share amounts or unless otherwise
noted)
Net income (loss)
$
(34,175
)
$
(2,287
)
n/m
n/m
Depreciation and amortization
25,381
25,249
1
%
n/m
Interest expense, net
19,989
22,027
(9
)%
(10
)%
Income tax benefit
4,441
1,349
n/m
n/m
EBITDA
15,636
46,338
(66
)%
(66
)%
(Gain) Loss on sale of property and other,
net
(109
)
92
n/m
n/m
Share of income of equity method
investments
(1,514
)
(1,587
)
5
%
5
%
Foreign exchange (gain) loss, net(2)
5,173
(21,584
)
n/m
n/m
Share of equity method investments
adjusted EBITDA
2,811
2,840
(1
)%
(2
)%
Share-based compensation expense
3,598
5,657
(36
)%
(37
)%
Expenses related to the evaluation of
certain strategic transactions(3)
930
—
n/m
n/m
Operational reorganization and severance
expense(4)
2,114
—
n/m
n/m
Impairment relating to intangible
assets(5)
4,710
—
n/m
n/m
Adjusted EBITDA
$
33,349
$
31,756
5
%
4
%
- See “Non-GAAP Financial Measures” for an explanation of our
constant currency results.
- Primarily driven by foreign exchange volatility impacting our
non-USD debt and working capital.
- Relating to third party advisory expenses incurred by the
Company's independent special committee in request of the
evaluation of certain strategic transactions.
- Expenses incurred with respect to a strategic reorganization
program of the Company's operations and support teams.
- The Company recognized impairment losses on intangible assets
related to the termination of two hotel management contracts.
A reconciliation of Operating income (loss) to House-Level
Contribution & Other Contribution for the 13 weeks ending June
30, 2024 and July 2, 2023 is set forth below:
For the 13 Weeks Ended
June 30, 2024
July 2, 2023
Change %
July 2, 2023 Constant
Currency(1)
Constant Currency Change
%(1)
Actuals
(Unaudited, dollar amounts in
thousands)
Operating income (loss)
$
(11,368
)
$
19,594
n/m
$
18,935
n/m
General and administrative
38,726
37,243
4
%
$
37,509
3
%
Pre-opening expenses
5,652
4,206
34
%
$
4,236
33
%
Depreciation and amortization
25,381
25,249
1
%
$
25,430
n/m
Share-based compensation
3,598
5,657
(36
)%
$
5,697
(37
)%
Foreign exchange (gain) loss, net
5,173
(21,584
)
n/m
$
(21,738
)
n/m
Other, net
6,700
(21
)
n/m
$
(21
)
n/m
Non-House membership revenues
(9,480
)
(9,078
)
(4
)%
$
(9,143
)
(4
)%
Other revenues
(73,210
)
(74,250
)
1
%
$
(74,645
)
2
%
Other operating expenses
68,400
66,226
3
%
66,700
3
%
House-Level Contribution
$
59,572
$
53,242
12
%
$
52,960
12
%
Operating profit (loss) margin
(4
)%
7
%
7
%
House-Level contribution margin
27
%
26
%
26
%
For the 13 Weeks Ended
June 30, 2024
July 2, 2023
Change %
July 2, 2023 Constant
Currency(1)
Constant Currency Change
%(1)
Actuals
(Unaudited, dollar amounts in
thousands)
Operating income (loss)
$
(11,368
)
$
19,594
n/m
$
18,935
n/m
General and administrative
38,726
37,243
4
%
37,509
3
%
Pre-opening expenses
5,652
4,206
34
%
4,236
33
%
Depreciation and amortization
25,381
25,249
1
%
25,430
n/m
Share-based compensation
3,598
5,657
(36
)%
5,697
(37
)%
Foreign exchange loss, net
5,173
(21,584
)
n/m
(21,738
)
n/m
Other, net
6,700
(21
)
n/m
(21
)
n/m
House membership revenues
(94,104
)
(80,115
)
(17
)%
(80,386
)
(17
)%
In-House revenues
(128,352
)
(125,480
)
(2
)%
(126,016
)
(2
)%
In-House operating expenses
162,884
152,353
7
%
153,442
6
%
Total Other Contribution
$
14,290
$
17,102
(16
)%
$
17,088
(16
)%
Operating profit (loss) margin
(4
)%
7
%
7
%
Other Contribution Margin
17
%
21
%
21
%
- See “Non-GAAP Financial Measures” for an explanation of our
constant currency results.
Condensed unaudited Consolidated Statements of Operations for
the 13 weeks ended June 30, 2024 and July 2, 2023:
For the 13 Weeks Ended
(in thousands, except for per share
data)
June 30, 2024
July 2, 2023
Revenues
Membership revenues
$
103,584
$
89,193
In-House revenues
128,352
125,480
Other revenues
73,210
74,250
Total revenues
305,146
288,923
Operating expenses
In-House operating expenses
(162,884
)
(152,353
)
Other operating expenses
(68,400
)
(66,226
)
General and administrative expenses
(38,726
)
(37,243
)
Pre-opening expenses
(5,652
)
(4,206
)
Depreciation and amortization
(25,381
)
(25,249
)
Share-based compensation
(3,598
)
(5,657
)
Foreign exchange gain (loss), net
(5,173
)
21,584
Other, net
(6,700
)
21
Total operating expenses
(316,514
)
(269,329
)
Operating income (loss)
(11,368
)
19,594
Other (expense) income
Interest expense, net
(19,989
)
(22,027
)
Gain (loss) on sale of property and other,
net
109
(92
)
Share of income of equity method
investments
1,514
1,587
Total other expense, net
(18,366
)
(20,532
)
Income (loss) before income
taxes
(29,734
)
(938
)
Income tax (expense) benefit
(4,441
)
(1,349
)
Net income (loss)
(34,175
)
(2,287
)
Net income (loss) attributable to
noncontrolling interests
306
(357
)
Net income (loss) attributable to Soho
House & Co Inc.
$
(33,869
)
$
(2,644
)
Net income (loss) per share attributable
to Class A and Class B common stock
Basic and diluted
$
(0.17
)
$
(0.01
)
Weighted average shares outstanding
Basic and diluted
196,258
195,662
Condensed unaudited Consolidated Statements of Cash flows for
the 26 weeks ended June 30, 2024 and July 2, 2023:
For the 26 Weeks Ended
(in thousands)
June 30, 2024
July 2, 2023
Cash flows from operating
activities
Net income (loss)
$
(80,514
)
$
(18,303
)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization
$
51,125
$
49,713
Non-cash share-based compensation
10,808
11,058
Deferred tax expense (benefit)
(2,174
)
(836
)
(Gain) loss on sale of property and other,
net
(174
)
(589
)
Loss on impairment of intangible
assets
4,710
—
Share of (income) loss of equity method
investments
(1,891
)
(2,458
)
Amortization of debt issuance costs
1,390
1,461
Loss on debt extinguishment
—
3,278
PIK interest (settled), net of cash
interest
19,568
18,450
Distributions from equity method
investees
325
209
Foreign exchange (gain) loss, net
10,654
(34,597
)
Changes in assets and liabilities:
Accounts receivable
2,216
(11,849
)
Inventories
(3,337
)
(5,688
)
Operating leases, net
4,760
(2,428
)
Other operating assets
(18,377
)
(24,770
)
Deferred revenue
6,793
11,920
Accounts payable and accrued and other
liabilities
39,110
13,710
Net cash provided by operating
activities
44,992
8,281
Cash flows from investing
activities
Purchase of property and equipment
(46,804
)
(33,313
)
Proceeds from sale of assets
—
1,362
Purchase of intangible assets
(8,961
)
(8,823
)
Repayment of capital investment from
equity method investee
10,706
—
Net cash used in investing activities
(45,059
)
(40,774
)
Cash flows from financing
activities
Repayment of borrowings
(879
)
(117,202
)
Payment for debt extinguishment costs
—
(1,686
)
Proceeds from borrowings
—
140,000
Payments for debt issuance costs
—
(2,822
)
Principal payments on finance leases
(181
)
(134
)
Principal payments on financing
obligation
(153
)
—
Distributions to noncontrolling
interests
(1,454
)
(390
)
Purchase of treasury stock
(4,708
)
—
Net cash (used in) provided by financing
activities
(7,375
)
17,766
Effect of exchange rate changes on cash
and cash equivalents, and restricted cash
(1,780
)
2,077
Net (decrease) increase in cash and cash
equivalents, and restricted cash
(9,222
)
(12,650
)
Cash, cash equivalents and restricted
cash
Beginning of period
163,607
190,043
End of period
$
154,385
$
177,393
For the 26 Weeks Ended
(in thousands)
June 30, 2024
July 2, 2023
Cash, cash equivalents and restricted cash
are comprised of:
Cash and cash equivalents
151,195
129,285
Restricted cash
3,190
48,108
Cash, cash equivalents and restricted
cash as of June 30, 2024 and July 2, 2023
$
154,385
$
177,393
Supplemental disclosures:
Cash paid for interest, net of capitalized
interest
$
17,875
$
15,889
Cash paid for income taxes
2,376
1,511
Supplemental disclosures of non-cash
investing and financing activities:
Operating lease assets obtained in
exchange for new operating lease liabilities
68,315
41,852
Acquisitions of property and equipment
under finance leases
179
—
Prepaid capital expenditures
6,338
—
Accrued capital expenditures
8,277
10,814
Condensed Unaudited Consolidated Balance Sheet as of June 30,
2024 and December 31, 2023:
As of
(in thousands, except for par value and
share data)
June 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
151,195
$
161,656
Restricted cash
3,190
1,951
Accounts receivable, net
55,719
58,158
Inventories
63,746
60,768
Prepaid expenses and other current
assets
131,762
112,512
Total current assets
405,612
395,045
Property and equipment, net
629,682
627,035
Operating lease assets
1,177,175
1,150,165
Goodwill
203,699
206,285
Other intangible assets, net
119,243
127,240
Equity method investments
12,159
21,695
Deferred tax assets
735
740
Other non-current assets
1,788
9,597
Total non-current assets
2,144,481
2,142,757
Total assets
$
2,550,093
$
2,537,802
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable
$
86,386
$
70,316
Accrued liabilities
96,044
84,815
Current portion of deferred revenue
124,137
117,129
Indirect and employee taxes payable
30,691
38,169
Current portion of debt, net of debt
issuance costs
34,178
29,290
Current portion of operating lease
liabilities - sites trading less than one year
656
1,721
Current portion of operating lease
liabilities - sites trading more than one year
53,104
49,436
Other current liabilities
41,180
33,633
Total current liabilities
466,376
424,509
Debt, net of current portion and debt
issuance costs
647,954
635,576
Property mortgage loans, net of debt
issuance costs
137,242
137,099
Operating lease liabilities, net of
current portion - sites trading less than one year
109,664
68,762
Operating lease liabilities, net of
current portion - sites trading more than one year
1,225,158
1,234,140
Finance lease liabilities
77,688
78,481
Financing obligation
76,768
76,624
Deferred revenue, net of current
portion
24,721
25,787
Deferred tax liabilities
510
1,510
Other non-current liabilities
9,831
5,941
Total non-current liabilities
2,309,536
2,263,920
Total liabilities
2,775,912
2,688,429
As of
(in thousands, except for par value and
share data)
June 30, 2024
December 31, 2023
Shareholders’ equity
Class A common stock, $0.01 par value,
1,000,000,000 shares authorized, 65,555,465 shares issued and
54,197,300 outstanding as of June 30, 2024 and 64,208,851 shares
issued and 53,741,731 outstanding as of December 31, 2023; Class B
common stock, $0.01 par value, 500,000,000 shares authorized,
141,500,385 shares issued and outstanding as of June 30, 2024 and
December 31, 2023
2,071
2,057
Additional paid-in capital
1,242,735
1,231,941
Accumulated deficit
(1,440,274
)
(1,360,365
)
Accumulated other comprehensive income
30,518
30,000
Treasury stock, at cost; 11,358,165 shares
as of June 30, 2024 and 10,467,120 shares as of December 31,
2023
(66,708
)
(62,000
)
Total shareholders’ deficit attributable
to Soho House & Co Inc.
(231,658
)
(158,367
)
Noncontrolling interest
5,839
7,740
Total shareholders’ deficit
(225,819
)
(150,627
)
Total liabilities and shareholders’
equity
$
2,550,093
$
2,537,802
Key Performance and Operating Metrics
Evaluated by Management
In assessing the performance of our business, we consider a
variety of operating and financial measures. These key measures
include:
HOUSE MEMBERSHIP REVENUES. House Membership Revenues are
comprised primarily of annual membership fees and one-time legacy
registration fees from Soho House members which are amortized over
20 years. The one-time registration fee is no longer applicable to
new members admitted from April 4, 2022, see House Introduction
Credits below.
HOUSE INTRODUCTION CREDITS. New members admitted from
April 4, 2022 have been required to purchase House Introduction
Credits as part of their membership, per the House rules. House
Introduction Credits are credits of an equivalent value to cash
within Houses and are redeemable to purchase food and beverage
items, and bedroom stays, at the Houses. House Introduction Credits
expire after the first three months from the date of issuance,
where legally permitted in the regions we operate, if not utilized
or if the Company terminates a member’s House membership. House
Introduction Credits are recognized upon issuance as deferred
revenue on our consolidated balance sheets. Revenue from House
Introduction Credits are recognized as In-House revenues when
redeemed by members, and as breakage revenue within Membership
revenues upon expiration or in the period that we are able to
reliably estimate expected breakage to the extent that they are
unredeemed, are recognized.
IN-HOUSE REVENUES. In-House revenues include all revenues
realized within our Houses, including food and beverage,
accommodation and spa products and treatments.
HOUSE REVENUES. House Revenues is defined as Membership
revenues plus In-House revenues less Non-House Membership Revenues.
Our management views House Membership Revenues and In-House
revenues as interrelated and their aggregation as important in
tracking House performance. Although there is no minimum spend for
any member on In-House offerings, nevertheless in practice most
members consume food and beverage, accommodations and other
offerings at our Houses. The pricing of our In-House offerings is
reflective of the fact that the significant majority of In-House
offerings that generate In-House revenues are consumed by members
who also pay a membership fee in relation to that House, with
pricing of such In-House offerings being identical for both members
and non-members.
NUMBER OF SOHO HOUSES. The number of Soho Houses reflects
the total number of Soho Houses in operation in any period,
irrespective of whether each House is (i) controlled by us, (ii)
operated through a non-controlling interest in a joint venture or
(iii) operated through a management contract.
We review the number of members from all Houses to assess new
member growth, total House Revenues, and House-Level
Contribution.
TOTAL MEMBERS. Total members is defined as Soho House
members plus Other members.
NUMBER OF SOHO HOUSE MEMBERS. Our Soho House membership
model is an integral part of our business and has a significant
impact on our profitability and financial performance. Typically,
members hold an Every House membership or a Local House membership.
Member count is the primary driver of Membership Revenues and is
also a critical factor in In-House Revenues as members utilize the
offerings that are provided within the Houses. Soho House members
include all active, frozen and non-paying members.
The extent to which we achieve growth in our membership base,
retain existing members and periodically increase our membership
fee rates will impact our profitability. We have historically
enjoyed strong member loyalty, reflected by very high retention
rates. Robust demand for our memberships is also evidenced by
considerable wait lists for our Houses.
The year-over-year increase in our total number of Soho House
members is driven by a combination of increases in membership at
existing Houses and members from new Houses.
NUMBER OF OTHER MEMBERS. Other members include members of
Soho Works and Soho Friends and are key to our growth strategy and
enhancing our Soho House member experience. Prior to August 2022,
HOME+ membership, which is now included in Soho Friends, was also
included. Like Soho House members, other memberships are an
integral part of our business and we believe will have a
significant impact on our profitability and financial performance
in the future.
SOHO HOUSE MEMBER RETENTION. Soho House Member Retention
is defined as the number of Adult Paying Members (being all Soho
House members excluding child members and complimentary members) at
the beginning of a period less the number of Adult Paying Members
who canceled their membership during that same period (without
giving any effect to Adult Paying Members who froze their
memberships during such period), as a proportion of total Adult
Paying Members at the beginning of such period.
FROZEN MEMBERS. Frozen Members refers to Soho House
members who have elected to suspend their membership payments on a
six, nine- or twelve-month basis during which period the member is
not able to gain access to a Soho House site as a member, access
our membership Apps, or book bedrooms or Cowshed treatments or
products on discounted member rates. Frozen Members are not
included in Adult Paying Members, but are included in the total
number of Soho House members.
MEMBERSHIP REVENUES. Membership revenues are comprised of
House Membership Revenues (as defined below) and Non-House
Membership Revenues (as defined below). House Membership Revenues
and Non-House Membership Revenues are each comprised primarily of
annual membership fees and one-time registration fees which are
amortized over 20 years. Membership revenues are a function of the
number of members, membership mix, and membership pricing. For
GAAP, we report Membership revenues only from Houses and sites in
which we own a controlling interest. Our membership pricing varies
by geographic segment and membership offering and, as such, our mix
of House and Soho Works club openings can affect our revenue growth
and profitability over time. Prices are generally higher in North
America and the rest of the world compared with the UK and Europe.
Membership revenues provide a stable and recurring source of
revenues which have few direct costs and, as such, is a reliable
and predictable source of cash flow.
HOUSE MEMBERSHIP REVENUES. House Membership Revenues is
an important performance indicator and is defined above in the
Non-GAAP reconciliation.
IN-HOUSE REVENUES. In-House revenues refer to all
revenues realized within our Houses, and primarily includes
revenues from food and beverage, accommodation, and spa products
and treatments.
HOUSE REVENUES. House Revenues is an important
performance indicator and is defined in “Non-GAAP Financial
Measures."
OTHER REVENUES. Other revenues are defined as total
revenues that are not realized within our Houses, including
revenues from Scorpios, Soho Works and our stand-alone restaurants,
procurement fees from Soho House Design, Soho Home and Cowshed
retail products and other revenues from products and services that
we provide outside of our Houses, as well as management fees from
The Ned sites and The LINE and Saguaro hotels.
NON-HOUSE MEMBERSHIP REVENUES. Non-House Membership
Revenues are comprised of Soho Works membership revenue, Soho
Friends membership revenue and SOHO HOME+ membership revenue which
was merged into Soho Friends membership at the beginning of August
2022.
ACTIVE APP USERS. Active App Users is defined as unique
users who have logged into any of our membership Apps within the
last three months.
AVERAGE DAILY RATE. Average Daily Rate represents the
average rental income per paid occupied room.
REVENUE PER AVAILABLE ROOM (RevPAR). The key industry
standard for measuring hotel-operating performance is RevPAR, which
is calculated by multiplying the percentage of occupied rooms to
available rooms by the average daily rate realized. Where this is
presented on a like-for like basis, RevPAR is adjusted for new or
divested sites, for example Houses that were not open in the
comparison period.
Forward Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements contained in this release that do not relate to
matters of historical fact should be considered forward-looking
statements, including, without limitation, statements regarding our
expected financial performance and operational performance for the
remainder of fiscal 2024, as well as statements that include the
words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,”
“estimate,” “may,” “should,” “anticipate” and similar statements of
a future or forward-looking nature. These forward-looking
statements are based on management’s current expectations. These
statements are neither promises nor guarantees, but involve known
and unknown risks, uncertainties and other important factors that
may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, including important factors discussed under the caption
“Risk Factors” in our annual report on form 10-K for the fiscal
year ended December 31, 2023 and as such factors may be updated
from time to time in our other filings with the SEC, which are
accessible on the SEC’s website at www.sec.gov. In addition, we
operate in rapidly changing environment. New risks emerge from time
to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on its business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. In
addition, the forward-looking statements made in this release
relate only to events or information as of the date on which the
statements are made in this release. Except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
About Soho House & Co:
Soho House & Co (SHCO) is a global membership platform of
physical and digital spaces that connects a vibrant, diverse and
global group of members. These members use the Soho House & Co
platform to work, socialize, connect, create and flourish all over
the world. We began with the opening of the first Soho House in
1995 and remain the only company to have scaled a private
membership network with a global presence. Members around the world
engage with Soho House & Co through our global collection, as
at June 30, 2024 of 44 Soho Houses, 9 Soho Works, Scorpios Beach
Club in Mykonos, Soho Home – our interiors and lifestyle retail
brand – and our digital channels. The Ned in London, New York and
Doha, The LINE and Saguaro hotels in North America also form part
of Soho House & Co's wider portfolio.
For more information, please visit www.sohohouseco.com.
Source: Soho House & Co (SHCO)
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version on businesswire.com: https://www.businesswire.com/news/home/20240808439259/en/
Investor Relations ir@sohohouseco.com
Media and Press press@sohohouseco.com
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