8-K: Soho House & Co Inc. Announces Fourth Quarter and Fiscal Year 2024 Results

Soho House & Co Inc. reports a 7.0% year-over-year increase in total revenues for fiscal year 2024, reaching $1,203.8 million.

Summary

• Soho House & Co Inc. announced its financial results for the fourth quarter and fiscal year ended December 29, 2024.
• Total revenues for the fourth quarter were $305.6 million, a 5.4% increase year-over-year.
• Membership revenues for the fourth quarter grew to $109.3 million, a 15.6% increase year-over-year.
• In-House revenues for the fourth quarter were $123.4 million, down 1.5% year-over-year.
• RevPAR was 1% higher year-over-year on a like-for-like basis for the fourth quarter.
• Other revenues for the fourth quarter were $72.8 million, up 3.8% year-over-year.
• Net loss attributable to Soho House & Co Inc. for the fourth quarter was $91.7 million, or $0.47 per share.
• Adjusted EBITDA for the fourth quarter was $32.3 million, inclusive of certain out-of-period expenses and tax matters.
• Total revenues for fiscal year 2024 increased 7.0% year-over-year to $1,203.8 million.
• Membership revenues for fiscal year 2024 were $418.0 million, a 17.2% increase year-over-year.
• In-House revenues for fiscal year 2024 grew to $481.6 million, flat year-over-year.
• Other revenues for fiscal year 2024 were $304.2 million, up 6.2% year-over-year.
• Net loss attributable to Soho House & Co Inc. for fiscal year 2024 was $163.0 million, or $0.84 per share.
• Adjusted EBITDA for fiscal year 2024 was $131.9 million, up 14.1% from $115.6 million in fiscal year 2023.
• Three new Soho Houses were opened in 2024: Portland, Sao Paulo, and Mews House, along with Scorpios Bodrum.
• The company delivered on total Soho House members, Membership revenues, and Total revenues compared to guidance given on December 19, 2024.
• As of December 29, 2024, Soho House members totaled 212,447.
• Total members grew to 271,541 from 267,494 in the third quarter of 2024 and by 4.5% year-over-year.
• The company ended the fourth quarter of 2024 with cash and cash equivalents and restricted cash of $156 million.
• The company received an offer from a third-party consortium to be taken private for $9.00 per share, and a Special Committee is assessing the offer.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While the company shows revenue and membership growth, it is still operating at a net loss. The potential privatization offer adds uncertainty.

Positives

• Membership revenues showed strong growth, increasing 15.6% in Q4 and 17.2% for the full year.
• Adjusted EBITDA increased by 14.1% for the full year, indicating improved profitability.
• The company successfully opened new Soho Houses and a Scorpios location, expanding its global presence.
• Total revenues increased by 7.0% year-over-year to $1,203.8 million for fiscal year 2024.
• The company delivered on total Soho House members, Membership revenues, and Total revenues compared to guidance given on December 19, 2024.

Negatives

• The company reported a net loss of $91.7 million for the fourth quarter and $163.0 million for the full year.
• In-House revenues were down 1.5% year-over-year in the fourth quarter.
• Adjusted EBITDA was impacted by out-of-period expenses and tax matters.
• Other Memberships including Soho Friends and Soho Works was 59,094 members, a decrease of 322 from the end of the third quarter 2024.

Risks

• The company is currently operating at a net loss.
• The potential transaction to take the company private is uncertain and may not occur.
• Foreign exchange volatility impacted the company's non-USD debt and working capital.
• The company recognized impairment losses on long-lived assets and intangible assets.

Future Outlook

The company expects its operational and finance systems transformation to unlock potential, making it a more efficient, resilient, and profitable business, driving long-term growth.

Management Comments

• The strong results we delivered in 2024 demonstrate our unrelenting focus on delivering the best member experience and operational excellence across 45 Houses around the world.
• We grew full year total revenues by 7% and increased adjusted EBITDA by 14%.
• Looking ahead, I'm excited by the potential our operational and finance systems transformation will unlock, fundamentally changing the way we operate.
• These improvements will make us a more efficient, resilient and profitable business, giving us the confidence to drive long-term growth while staying true to what makes Soho House special.

Industry Context

Soho House & Co operates in the hospitality and membership club sector, competing with other private clubs, hotels, and co-working spaces. The company's focus on creating unique experiences and a strong community differentiates it from traditional hospitality models.

Comparison to Industry Standards

• Comparing Soho House's RevPAR to industry benchmarks for luxury hotels and membership clubs would provide insights into its competitive positioning.
• Companies like Equinox (EQX) in the fitness and lifestyle space, or The Wing (prior to closure) in co-working, offer membership models that could be compared to Soho House's.
• Publicly traded hotel chains like Marriott (MAR) and Hilton (HLT) can be used to benchmark revenue growth and profitability metrics, although their business models differ significantly.

Stakeholder Impact

• Shareholders are impacted by the potential privatization offer.
• Members benefit from the continued expansion and enhancement of the Soho House experience.
• Employees are affected by the operational and finance systems transformation.
• Creditors are impacted by the company's debt levels and financial performance.

Next Steps

• The Special Committee will continue to assess the offer to take the company private.
• The company will continue to focus on operational and finance systems transformation.
• The company will make a further public comment regarding these matters at such time as there is a material development in the process.

Key Dates

Keywords

Soho House, Membership, Revenues, Adjusted EBITDA, Financial Results, SHCO