Life Time CEO Confident After Strong Q2: ‘All of Our Strategies Are Working’
Life Time’s membership growth has been strong as demand for its amenities like group fitness surges
Life Time has reported revenue of $561.7 million for the second quarter of fiscal 2023, a 21.8% increase from the $461.3 million it posted in Q2 of last year, although the total missed analysts’ estimates of $567 million.
Shares of Life Time (NYSE: LTH) fell Tuesday in response.
Life Time is providing a full-year fiscal 2023 net income guidance range of $75- $83 million and is increasing the full-year fiscal 2023 Adjusted EBITDA guidance range to $510-$520 million.
“Our strong quarter further validates that all of our strategies are working and contributing to our success,” said Bahram Akradi, chairman and CEO of Life Fitness.
Life Time credits the revenue increase to its continued strong growth in membership dues and in-center revenue. Subscriptions, including digital on-hold memberships, also increased to 832,639. As for the magic behind the membership numbers, Life Time says the strong growth occurred without marketing, promotions or sales efforts.
“Our focus has been working on desirability in clubs, and it’s working,” Akradi told investors on the earnings call.
Regarding Life Time’s six-month 2023 information, the health and fitness operator reports a 25.7% increase in revenue to $1072.6 million due to continued membership dues and in-center revenue. Memberships increased by approximately 65,000 versus last year.
“We entered the third quarter with great momentum as we are delivering extraordinary member experiences,” Akradi added. “Our company is on a solid footing and well positioned for long-term success.”
Life Time opened one new center in Q2 and four new centers through the first half of the year. The fitness operator plans to open 12 centers in total this year, with eight planned for the second half of the year.
The company recently named LSKD as its exclusive apparel brand for its female instructors.
The luxury athletic country club operator has seen an uptick in interest for its group fitness classes, telling Athletech News that the variety of its class offerings is one of the primary reasons wellness enthusiasts join, stay and find value in their memberships.
While Peloton is leaning on its digital content, Life Time is bolstering opportunities for socialization while getting fit. That method is paying off, with Life Time seeing demand for group fitness classes that meet or exceed pre-pandemic levels across its clubs.
“It’s now about community and connection, even over content,” said Rob Glick, senior director of programming and innovation for group fitness at Life Time. “A number of years ago, I would have been hyper-focused on content. But one of the lessons we learned from the pandemic was that there are a lot of great ways to get content, if anything there’s a gluttony of content. What’s missing is the community and the connection.”
On Tuesday’s call, Akradi touched on the soaring weight loss medication sector and predicted that Life Time will remain unaffected by consumers who jump-start weight loss with the use of medication.
“We have fewer people joining [Life Time] for weight loss,” he confirmed, adding that the athletic country club hasn’t seen a difference in sign-ups because of the availability of weight loss medication.
Akradi told investors that if Life Time was purely a fitness company, there would perhaps be an impact. But instead, he says the company is focused on a very broad social aspect with its country clubs, beach clubs, and social gathering opportunities for consumers, along with its small and large group classes.
“We’re not concerned,” he added.
