News Column

Life Time Fitness beats 1Q expectations, but stock price dips

April 24, 2014

By Steve Alexander, Star Tribune (Minneapolis)



April 24--Life Time Fitness beat first-quarter earnings and revenue expectations Thursday, but the stock was down more than 2 percent in midmorning trading.

The Chanhassen-based athletic club company earned $28.3 million, or 69 cents a share, beating analyst estimates by a penny. Revenue was $312 million, about 1 percent higher than the $309.5 millionWall Street had been expecting.

In midmorning trading, the stock was trading at $49.25, down $1.48, or 2.9 percent.

The company continued to open new locations in the quarter, in New York and Tampa, Fla. Total memberships grew slightly from a year ago to about 812,000, while total operating expenses of $257.9 million were up about 8 percent from a year ago.

The company reaffirmed its prior 2014 financial guidance. For the year, Life Time said it expects net income of $125 million to $130 million, which would be an increase of 3 to 7 percent. Earnings per share are expected to be $3.05 to $3.15. Revenue is expected to be $1.3 billion to $1.32 billion, up 8 to 9.5 percent.

The company said it expects revenue to be driven by price and mix optimization, square footage expansion and sales growth within the clubs. Earnings growth will be somewhat dampened by the costs of opening new locations.

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Source: Star Tribune (Minneapolis, MN)