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 first quarter ended March 31, 2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240510653430/en/
Soho House's White City House in London,
UK. Photo: Felix Speller
First Quarter 2024
Highlights
- Total Members in the first quarter 2024 grew to 261,571 from
259,884 in fourth quarter 2023 and by 9.9% year-over-year
- Soho House Members grew to 198,021 from 193,865 in fourth
quarter 2023, and 17.4% year-over-year
- SHCO Membership waitlist now sits at approximately 102,000, an
all-time high
- Total revenues of $263.1 million, 3.1% year-over-year
growth
- Membership revenues grew to $100.2 million, a 20.4% increase
year-over-year, accounting for 38.1% of Total revenues
- In-House revenues of $110.4 million, down -5% year-over-year
- Revenue Per Available Room (“RevPAR”) decreased -3%
year-over-year on a like-for-like basis
- Net loss attributable to Soho House & Co Inc. was $46.0
million or $0.24 per share
- Adjusted EBITDA was $19.3 million, down $(0.8) million from
first quarter 2023
- Opened Soho House Portland in the quarter, expect to open Soho
House Sao Paulo soon
"Our first quarter results are testament to the strong appeal of
Soho House globally, with Soho House membership growing 17%
year-on-year and our waitlist surpassing the 100,000 mark for the
first time," said Andrew Carnie, CEO of Soho House & Co.
“Total revenues grew 3% in the quarter, and we have seen steady
improvement in underlying trends since the start of the year. This,
coupled with continued strong execution, gives us confidence to
raise the midpoint of our Adjusted EBITDA guidance.”
“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 March 31, 2024
For the 13 Weeks Ended
(in thousands, except shares and per
share amount unless otherwise noted)
March 31, 2024
April 2, 2023
Total revenues
$
263,146
$
255,209
Membership revenues
100,191
83,248
In-House revenues
110,401
116,078
Other revenues
52,554
55,883
Operating income (loss)
(25,083
)
962
House-Level Contribution(1)
49,444
46,718
House-Level Contribution margin (%)(1)
25
%
24
%
Other Contribution(1)
8,106
8,138
Other contribution margin (%)(1)
13
%
13
%
Net income (loss) attributable to SHCO
Inc.
(46,040
)
(15,952
)
Adjusted EBITDA(1)
19,300
20,127
Adjusted EBITDA margin (%)(1)
7
%
8
%
Weighted average Class A and Class B
Shares outstanding (basic)
195,710,720
195,421,792
Basic and diluted income (loss) per
share
$
(0.24
)
$
(0.08
)
(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)
March 31, 2024
April 2, 2023
Pre-opening expenses (1)
$
5,754
$
4,994
Non-cash rent
833
2,776
Deferred registration fees, net
(467
)
(461
)
We delivered the following highlights
against our strategic priorities in the first
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 198,021 from 193,865 in fourth
quarter 2023, and 17.4% YoY
- Focused rollout of initiatives continues to improve member
experience, as illustrated by higher member satisfaction
scores
- Opened Soho House Portland in March, expect to open Soho House
Sao Paulo soon
2. Operational Excellence to Drive Profitability
- We achieved first quarter 2024 Adjusted EBITDA of $19.3
million, with Adjusted EBITDA margins of 7%
- Launched a new best-in-class Human Resources system in the UK,
ahead of rolling it out globally
- Like-for-like Food & Beverage margins at our Houses both
improved compared to the first quarter 2023, despite cost
inflation
Membership Summary for the Quarter
Ended March 31, 2024
As of
March 31, 2024
April 2, 2023
Total Members
261,571
237,961
Soho House
198,021
168,685
Frozen members
10,052
2,333
Soho Friends
57,432
62,912
Soho Works
6,118
6,364
Active App Users
204,405
175,323
As of
March 31, 2024
April 2, 2023
Number of Soho Houses
43
41
North America
16
14
United Kingdom
13
13
Europe/RoW
14
14
Number of Soho House Members
198,021
168,685
North America
72,692
61,885
United Kingdom
71,835
63,285
Europe/RoW
42,678
36,031
All Other
10,816
7,484
Number of Other Members
63,550
69,276
North America
17,037
18,894
United Kingdom
38,114
41,756
Europe/RoW
8,399
8,626
Number of Total Members
261,571
237,961
Number of Active App Users
204,405
175,323
Memberships
- Total Members grew to 261,571 from 259,884 in fourth
quarter 2023 and by 9.9% year-over-year
- Total Soho House Members grew to 198,021 from 193,865 in
fourth quarter 2023, driven by continued high retention rates,
alongside membership intakes in both new and existing Houses
- Frozen Members was 10,052 at the end of first quarter
2024
- Other Memberships including Soho Friends and Soho Works
was 63,550 members, a decrease of 2,469 from the end of the fourth
quarter 2023 and an 8% decrease year-over-year
Financing
- SHCO ended first quarter 2024 with Cash and cash equivalents
and Restricted cash of $145 million
Updated Fiscal 2024 Guidance
The following forward-looking statements reflect our current
expectations as of today, May 10, 2024:
Old Fiscal 2024
Guidance
New Fiscal 2024
Guidance
Total Soho House Members
>210,000
>210,000
Membership revenues
$405m – $415m
$405m – $415m
Total revenues*
$1,200m – $1,250m
$1,200m – $1,250m
Adjusted EBITDA**
$155m – $165m
$157m – $165m
*Assumes no material 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, May 10, 2024 at 9am EST / 1pm 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 1963 USA & Canada Toll-Free (800) 715
9871
UK
London +44 (0)20 3481 4247 UK Toll-Free +44 (0)800 260 6466
Conference ID 6397190 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 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 March 31, 2024 and April 2, 2023 is set forth
below:
For the 13 Weeks Ended
Percent Change
March 31, 2024
April 2, 2023
Actuals
Constant Currency(1)
Actuals
(Unaudited, dollar amounts in
thousands)
Net income (loss)
$
(46,339
)
$
(16,016
)
n/m
n/m
Depreciation and amortization
25,744
24,464
5
%
2
%
Interest expense, net
21,199
18,701
13
%
9
%
Income tax benefit
499
(171
)
n/m
n/m
EBITDA
1,103
26,978
(96
)%
(96
)%
(Gain) loss on sale of property and other,
net
(65
)
(681
)
90
%
91
%
Share of income of equity method
investments
(377
)
(871
)
57
%
58
%
Foreign exchange (gain) loss, net (2)
5,481
(13,013
)
n/m
n/m
Share of equity method investments
adjusted EBITDA
1,740
1,868
(7
)%
(10
)%
Share-based compensation expense
8,039
5,846
38
%
33
%
Expenses related to shareholder activism
(3)
1,885
—
n/m
n/m
Expenses related to evaluation of certain
strategic transactions (4)
1,494
—
n/m
n/m
Adjusted EBITDA
$
19,300
$
20,127
(4
)%
(7
)%
1.
See “Non-GAAP Financial Measures”
for an explanation of our constant currency results.
2.
Primarily driven by foreign
exchange volatility impacting our non-USD debt and working
capital.
3.
Primarily relating to
professional service fees related to shareholder activism
response
4.
Primarily relating to third party
advisory expenses incurred by the Company’s independent special
committee in respect of the evaluation of certain strategic
transactions
A reconciliation of Operating income (loss) to House-Level
Contribution & Other Contribution for the 13 weeks ending March
31, 2024 and April 2, 2023 is set forth below:
For the 13 Weeks Ended
March 31, 2024
April 2, 2023
Change %
April 3, 2023 Constant
Currency
Constant Currency
Change %
Actuals
(Unaudited, dollar amounts in
thousands)
Operating income (loss)
$
(25,083
)
$
962
n/m
$
(2,899
)
n/m
General and administrative
34,372
30,574
12
%
31,675
9
%
Pre-opening expenses
5,754
4,994
15
%
5,174
11
%
Depreciation and amortization
25,744
24,464
5
%
25,345
2
%
Share-based compensation
8,039
5,846
38
%
6,057
33
%
Foreign exchange (gain) loss, net
5,481
(13,013
)
n/m
(13,482
)
n/m
Other, net
3,243
1,029
n/m
1,066
n/m
Non-House membership revenues
(9,519
)
(8,636
)
(10
)%
(8,947
)
(6
)%
Other revenues
(52,554
)
(55,883
)
6
%
(57,291
)
8
%
Other operating expenses
53,967
56,381
(4
)%
58,412
(8
)%
House-Level Contribution
$
49,444
$
46,718
6
%
$
45,110
10
%
Operating income (loss) margin
(10
)%
0
%
0
%
House-Level Contribution Margin
25
%
24
%
24
%
For the 13 Weeks Ended
March 31, 2024
April 2, 2023
Change %
April 3, 2023 Constant
Currency
Constant Currency Change
%
Actuals
(Unaudited, dollar amounts in
thousands)
Operating income (loss)
$
(25,083
)
$
962
n/m
$
(2,899
)
n/m
General and administrative
34,372
30,574
12
%
31,675
9
%
Pre-opening expenses
5,754
4,994
15
%
5,174
11
%
Depreciation and amortization
25,744
24,464
5
%
25,345
2
%
Share-based compensation
8,039
5,846
38
%
6,057
33
%
Foreign exchange loss, net
5,481
(13,013
)
n/m
(13,482
)
n/m
Other, net
3,243
1,029
n/m
1,066
n/m
House membership revenues
(90,672
)
(74,612
)
(22
)%
(75,859
)
(20
)%
In-House revenues
(110,401
)
(116,078
)
5
%
(118,409
)
7
%
In-House operating expenses
151,629
143,972
5
%
149,158
2
%
Total Other Contribution
$
8,106
$
8,138
(0
)%
$
7,826
4
%
Operating income (loss) margin
(10
)%
0
%
0
%
Other Contribution Margin
13
%
13
%
13
%
Condensed unaudited Consolidated Statements of Operations for
the 13 weeks ended March 31, 2024 and April 2, 2023:
For the 13 Weeks Ended
(in thousands, except for per share
data)
March 31, 2024
April 2, 2023
Revenues
Membership revenues
$
100,191
$
83,248
In-House revenues
110,401
116,078
Other revenues
52,554
55,883
Total revenues
263,146
255,209
Operating expenses
In-House operating expenses
(151,629
)
(143,972
)
Other operating expenses
(53,967
)
(56,381
)
General and administrative expenses
(34,372
)
(30,574
)
Pre-opening expenses
(5,754
)
(4,994
)
Depreciation and amortization
(25,744
)
(24,464
)
Share-based compensation
(8,039
)
(5,846
)
Foreign exchange gain (loss), net
(5,481
)
13,013
Other, net
(3,243
)
(1,029
)
Total operating expenses
(288,229
)
(254,247
)
Operating income (loss)
(25,083
)
962
Other (expense) income
Interest expense, net
(21,199
)
(18,701
)
Gain (loss) on sale of property and other,
net
65
681
Share of income (loss) of equity method
investments
377
871
Total other expense, net
(20,757
)
(17,149
)
Income (loss) before income
taxes
(45,840
)
(16,187
)
Income tax (expense) benefit
(499
)
171
Net income (loss)
(46,339
)
(16,016
)
Net income (loss) attributable to
noncontrolling interests
299
64
Net income (loss) attributable to Soho
House & Co Inc.
$
(46,040
)
$
(15,952
)
Net income (loss) per share attributable
to Class A and Class B common stock
Basic and diluted
$
(0.24
)
$
(0.08
)
Weighted average shares outstanding
Basic and diluted
195,711
195,422
Condensed unaudited Consolidated Statements of Cash flows for
the 13 weeks ended March 31, 2024 and April 2, 2023:
For the 13 Weeks Ended
(in thousands)
March 31, 2024
April 2, 2023
Cash flows from operating
activities
Net income (loss)
$
(46,339
)
$
(16,016
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
25,744
24,464
Non-cash share-based compensation
7,336
5,677
Deferred tax expense (benefit)
(393
)
(683
)
Gain (loss) on sale of property and other,
net
(65
)
(681
)
Share of (income) loss of equity method
investments
(377
)
(871
)
Amortization of debt issuance costs
703
762
PIK interest (settled), net of non-cash
interest
9,614
9,073
Distributions from equity method
investees
—
159
Foreign exchange (gain) loss, net
5,481
(13,013
)
Changes in assets and liabilities:
Accounts receivable
(1,046
)
(1,612
)
Inventories
(1,816
)
1,373
Operating leases, net
1,749
(1,125
)
Other operating assets
(26,478
)
(18,385
)
Deferred revenue
(4,747
)
297
Accounts payable and accrued and other
liabilities
38,122
(1,907
)
Net cash used in operating activities
7,488
(12,488
)
Cash flows from investing
activities
Purchase of property and equipment
(21,004
)
(12,010
)
Proceeds from sale of assets
—
978
Purchase of intangible assets
(4,587
)
(4,674
)
Net cash used in investing activities
(25,591
)
(15,706
)
Cash flows from financing
activities
Repayment of borrowings
(312
)
(202
)
Payment for debt extinguishment costs
—
—
Proceeds from borrowings
—
—
Payments for debt issuance costs
—
—
Principal payments on finance leases
(67
)
(39
)
Principal payments on financing
obligation
—
—
Distributions to noncontrolling
interest
—
(390
)
Contributions from noncontrolling
interest
—
—
Senior convertible preference shares
issued, net of issuance costs
—
—
Purchase of treasury stock
—
—
Proceeds from issuance of SHHL redeemable
C ordinary shares, net of issuance costs
—
—
Net cash (used in) provided by financing
activities
(379
)
(631
)
Effect of exchange rate changes on cash
and cash equivalents, and restricted cash
(569
)
1,002
Net (decrease) increase in cash and
cash equivalents, and restricted cash
(19,051
)
(27,823
)
Cash, cash equivalents and restricted
cash
Beginning of period
163,607
190,043
End of period
$
144,556
$
162,220
For the 13 Weeks Ended
(in thousands)
March 31, 2024
April 2, 2023
Cash, cash equivalents and restricted cash
are comprised of:
Cash and cash equivalents
142,320
153,820
Restricted cash
2,236
8,400
Cash, cash equivalents and restricted
cash as of March 31, 2024 and April 2, 2023
$
144,556
$
162,220
Supplemental disclosures:
Cash paid for interest, net of capitalized
interest
$
10,235
$
8,573
Cash paid for income taxes
1,360
263
Supplemental disclosures of non-cash
investing and financing activities:
Operating lease assets obtained in
exchange for new operating lease liabilities
19,450
33,152
Acquisitions of property and equipment
under finance leases
198
—
Accrued capital expenditures
7,764
15,354
Condensed Unaudited Consolidated Balance Sheet as of March
31, 2024 and December 31, 2023:
As of
(in thousands, except for par value and
share data)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
142,320
$
161,656
Restricted cash
2,236
1,951
Accounts receivable, net
58,926
58,158
Inventories
62,137
60,768
Prepaid expenses and other current
assets
138,247
112,512
Total current assets
403,866
395,045
Property and equipment, net
617,465
627,035
Operating lease assets
1,147,753
1,150,165
Goodwill
204,150
206,285
Other intangible assets, net
125,363
127,240
Equity method investments
21,775
21,695
Deferred tax assets
733
740
Other non-current assets
2,518
9,597
Total non-current assets
2,119,757
2,142,757
Total assets
$
2,523,623
$
2,537,802
Liabilities and Shareholders’
Deficit
Current liabilities
Accounts payable
$
86,482
$
70,316
Accrued liabilities
87,941
84,815
Current portion of deferred revenue
114,415
117,129
Indirect and employee taxes payable
30,349
38,169
Current portion of debt, net of debt
issuance costs
34,184
29,290
Current portion of operating lease
liabilities - sites trading less than one year
947
1,721
Current portion of operating lease
liabilities - sites trading more than one year
50,057
49,436
Other current liabilities
42,439
33,633
Total current liabilities
446,814
424,509
Debt, net of current portion and debt
issuance costs
637,519
635,576
Property mortgage loans, net of debt
issuance costs
137,170
137,099
Operating lease liabilities, net of
current portion - sites trading less than one year
65,279
68,762
Operating lease liabilities, net of
current portion - sites trading more than one year
1,235,405
1,234,140
Finance lease liabilities
77,920
78,481
Financing obligation
76,717
76,624
Deferred revenue, net of current
portion
25,195
25,787
Deferred tax liabilities
1,776
1,510
Other non-current liabilities
5,222
5,941
Total non-current liabilities
2,262,203
2,263,920
Total liabilities
2,709,017
2,688,429
Commitments and contingencies
As of
(in thousands, except for par value and
share data)
March 31, 2024
December 31, 2023
Shareholders’ deficit
Class A common stock, $0.01 par value,
1,000,000,000 shares authorized, 65,272,905 shares issued and
54,805,785 outstanding as of March 31, 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 March 31, 2024 and
December 31, 2023.
2,068
2,057
Additional paid-in capital
1,239,266
1,231,941
Accumulated deficit
(1,406,405
)
(1,360,365
)
Accumulated other comprehensive income
34,088
30,000
Treasury stock, at cost; 10,467,120 shares
as of March 31, 2024 and December 31, 2023.
(62,000
)
(62,000
)
Total shareholders’ deficit attributable
to Soho House & Co Inc.
(192,983
)
(158,367
)
Noncontrolling interest
7,589
7,740
Total shareholders’ deficit
(185,394
)
(150,627
)
Total liabilities and shareholders’
deficit
$
2,523,623
$
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. is 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 March 31, 2024 of 43 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/20240510653430/en/
Investor Relations ir@sohohouseco.com
Media and Press press@sohohouseco.com
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