Soho House & Co Inc. shares fell after the membership club warned that bad weather and the temporary closure of its Tel Aviv house would weigh on revenue outlook.
The operator of members-only luxury hotels and clubs expects 2023 revenue of $1.13 billion to $1.16 billion, revised from a previous guidance of $1.12 billion to $1.19 billion, according to a statement Friday.
Shares fell as much as 19% in New York. The stock saw record gains this year, as shares had more than doubled through Thursday.
“Third quarter revenues were hurt by the wet summer weather,” Chief Financial Officer Thomas Allen said in an earnings call. “The temporary closing of our house in Tel Aviv also impacts our prior expectations.”
The bad weather hurt member spending on food and beverages, and use of amenities such as rooftops and swimming pools. The Tel Aviv house, opened in August 2021, boasts 24 bedrooms.
Soho House started as a place for members to network and relax, as well as eat, drink and sleep. Initially, the group sought to lure members who worked in creative industries, but that rule has become less strict.
Third quarter net loss attributable to Soho House came in at $42.4 million, improving from a loss of $91.7 million a year ago. Net debt as of Oct. 2 stood at $607 million.
The London-based company also posted revenue of $300.96 million for the quarter, missing the average analyst estimate of $307 million. Total members grew 20.8% year-over-year to 255,252. The wait-list currently contains an all-time high of about 98,000 hopefuls, and retention rates remain around pre-pandemic levels.
Soho House opened its first Latin American location, in Mexico City, in September. It’s planning to open locations in Portland, Oregon and Sao Paulo by the end of the year.
Read more: Soho House Wants to Crack America — Not Just New York (1)
(Updates headline, adds CFO quote and information about company)
