Q1 2024 Soho House & Co Inc Earnings Call
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Audra: Good morning, my name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Soho House & Company Inc. first quarter 2024 results conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.
Good morning, My name is Andre and I will be your conference operator today.
This time I would like to welcome everyone to the Soho House The company incorporated first quarter 'twenty 'twenty four results Conference call. Today's conference is being recorded all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
I would like to ask a question. During this time simply press the star key followed by the number one on your telephone keypad.
If you would like to withdraw your question Press Star one again.
Audra: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. At this time, I would like to turn the conference over to Thomas Allen, Chief Financial Officer. Please go ahead.
At this time I would like to turn the conference over to Thomas Allen Chief Financial Officer. Please go ahead.
Thomas Glassbrooke Allen: Thank you for joining us today to discuss Soho House & Co.'s first quarter financial results. My name is Thomas Allen.
Thomas Glassbrooke Allen: Thank you for joining us today to discuss so I think I was first quarter financial results.
Thomas Glassbrooke Allen: I'm the Chief Financial Officer. I'm here with Andrew Carnie, our CEO. Today's discussion contains forward-looking statements that represent our beliefs or expectations about future events. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Some of the factors that may cause such differences are described in our SEC filing. Any forward-looking statements represent our views only as of today, and we assume no obligation to update any forward-looking statements if our views change.
Thomas Glassbrooke Allen: My name is Thomas Allen I'm, the Chief Financial Officer.
Thomas Glassbrooke Allen: Here with Andrew Carnie, our CEO.
Thomas Glassbrooke Allen: Today's discussion contains forward looking statements that represent our beliefs or expectations about future events.
Thomas Glassbrooke Allen: All forward looking statements involve risks and uncertainties that could cause actual results to differ materially.
Thomas Glassbrooke Allen: Looking statements some.
Thomas Glassbrooke Allen: Some of the factors that may cause such differences are described in our SEC filings.
Andrew Carnie: Any forward looking statements represent our views only as of today and we assume no obligation to update any forward looking statements. If our views change by now you should have access to our Q1 earnings release, which can be found at Soho House co dot com in the news and events section. Additionally, we have posted our Q1 presentation, which can be found in the news <unk> events section of our site during the call we all serve.
Thomas Glassbrooke Allen: By now, you should have access to our Q1 earnings release, which can be found at SohoHouseCo.com in the News & Events section. Additionally, we have posted our Q1 presentation, which can be found in the News & Events section on our site. During the call, we will also refer to certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from, our GAAP results. Reconciliations from the most comfortable gap measures are available in today's earnings press release. Now, I hand it over to Andrew.
Andrew Carnie: Certain non-GAAP financial measures. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results.
Andrew Carnie: Reconciliations to the most comparable GAAP measures are available in today's earnings press release, now, let me hand, it over to Andrew.
Andrew Carnie: Thanks Thomas and hello everyone. I'm going to start by talking through the quarter's highlights, then provide an update on progress we've made against our strategic priorities. I'll then hand over to Thomas to talk through the financial performance, give an update on our balance sheet and our guidance before moving on to Q&A. It's been a solid start to 2024, with year-on-year growth in membership and revenues as we continue to deliver against our strategic priorities.
Andrew Carnie: Thanks, Thomas and Hello, everyone I'm going to start by talking through the quarters highlights then provide an update on progress we've made against our strategic priorities.
Andrew Carnie: Then hand over to Thomas to talk through the financial performance given up that on our balance sheet and our guidance before moving onto Q&A.
Andrew Carnie: We welcomed more than 4,000 members in the quarter, growing to 198,000 Soho House members overall, a year-on-year increase of 17%, which leaves us well on track to meet our full year target. The vast majority of the growth in the quarter came from the 25 houses that we've opened since 2018. Total Soho House & Co membership was also up, going 10% year on year. And our waitlist continued to grow, pushing through the 100,000 mark for the first time and ending the quarter at 102,000.
Thomas Glassbrooke Allen: It's been a solid start 2024 with you when you get growth in membership and revenues as we continued to deliver against our strategic priorities.
Thomas Glassbrooke Allen: We welcome more than 4000 members in the quarter growing to 198000 House members Admiral a year on year increase of 17%, which leaves us well on track to meet our full year target.
Thomas Glassbrooke Allen: Vast majority of the growth in the course that came from the 25 houses that we've opened since 2018.
Speaker Change: Thank you Sarah.
Speaker Change: <unk> was also up 10% year on year.
Speaker Change: <unk> continued to Greg pushing to the hundred thousand Mark for the first time and ending the quarter at 102000, that's up from 99000 in the fourth quarter and a 15% increase year on year, demonstrating the continuing strong appeal of our Soho house membership globally.
Andrew Carnie: That's up from 99,000 in the fourth quarter and a 15% increase year-on-year, demonstrating the continuing strong appeal of Soho House membership globally. Total revenues grew 3% year-on-year to £263 million, supported by continued growth in our recurring membership revenues, which were up 20% year-on-year and 5% up quarter-on-quarter. While overall revenue in the quarter was solid, in-house revenues were lower given macro conditions and in line with the commentary and guidance we gave you on our Q4 earnings.
Speaker Change: Revenues grew 3% year on year to 263 million supported by continued growth in our recurring membership revenues, which were up 20% year on year and 5% quarter on quarter. While overall revenue in the quarter was solid inhouse revenues were lower given macro conditions and in line with the commentary and guidance we gave.
Andrew Carnie: However, throughout the quarter, we saw sequentially stronger in-house revenue performance, and that trend has continued into April, strengthening our confidence in the year ahead. Q1 adjusted EBITDA was ahead of market expectations at 19.3 million. As we move more into our seasonally stronger quarters, we expect EBITDA to be higher year-over-year for the remainder of the year. We continue to control costs well, and so I've raised the midpoint of our adjusted EBITDA guidance for the year and reiterated guidance for all other methods.
Speaker Change: On our Q4 earnings however throughout the quarter, we saw sequentially stronger in house revenue performance and that trend has continued into April strengthening our confidence in the year ahead Q1. Adjusted EBITDA was ahead of market expectations at $19 3 million as we move more into a seasonally stronger quarters, we expect EBITDA.
Speaker Change: B high year over year, the remainder of the year, we continued to control costs, well and so I have raised the midpoint of our adjusted EBITDA guidance for the year and reiterated guidance for all other metrics.
Andrew Carnie: We've made significant progress against our two strategic priorities in the first quarter, and we will continue to focus on these areas: growing and enhancing the value of membership and delivering operational excellence to drive profitability and free cash flow. Ensuring we deliver the best member experiences is at the heart of what we do. We are improving service in our houses, and we are seeing a positive impact with member satisfaction scores increasing quarter over quarter.
Speaker Change: We've made significant progress against our two strategic priorities in the first quarter and we will continue to focus on these areas.
Speaker Change: Growing and enhancing the value of membership and delivering operational excellence to drive profitability and free cash flow.
Speaker Change: Ensuring we deliver the best member experiences at the heart of what we do.
Speaker Change: We are improving service dinner houses and we're seeing a positive impact with member satisfaction scores increasing quarter over quarter.
Andrew Carnie: We continue to execute on initiatives that make our member experience more personalized. We recently launched event recommendations on our app using reliable member data, which helped drive 6% higher event bookings in the quarter. We are continuing to invest in our existing houses, including carrying out refreshes at houses in London, LA, and New York. Soho House is known for its rooftops and pools. Our members love to spend the warmer months there, which is why we recently relaunched a rooftop at White City House, and we're about to do the same at Soho House Holloway in Los Angeles and Dumbo House in New York.
Speaker Change: We continue to execute on initiatives that make our member experience more personalize. We recently launched event recommendations on Iraq, using reliable member data, which helped drive 6% higher event bookings in the quarter, we are continuing to invest in our existing houses, including carrying at refreshes that houses in London L. A and New York.
Speaker Change: So our house is in for a rooftop some pills amended love to spend the warmer months that which is why we recently relaunched the rooftop a YTD house and whereabouts do to say, that's our house hollaway in Los Angeles' and timber house in New York, We continue to introduce new menus restaurants pop ups and wellness facilities that have all been very well with.
Andrew Carnie: We've continued to introduce new menus, restaurants, pop-ups, and wellness facilities that have all been very well-received. We recently announced that we're working towards opening a gym within 180 House in London later this year. Our new openings are going from strength to strength. Soho House Portland has had a strong start since we opened in March, and we've capitalised on six years in the city through our Cities Without Houses membership by already adding more than 1,000 members.
Speaker Change: <unk>, we recently announced that working towards opening a gym with them wanting to house in London later this year.
Speaker Change: New openings are going from strength.
Speaker Change: Our house Portland has had a strong start since we opened in March and we've capitalized on six years in the city through our switches that houses membership by already adding more than 1000 members I'm also really excited about the upcoming up against some pilot where.
Andrew Carnie: I'm also really excited about the upcoming opening in Sao Paulo, where we've seen high demand for membership for our first house in South America and follows the strong performance of our other house in Latin America, Soho House Mexico City, which opened last September.
Speaker Change: Where we've seen high demand for membership of our first house in South America, followed the strong performance of our other house in Latin America, Sarah House, Mexico City, which opened last September.
Andrew Carnie: Turning to our second strategic priority, Operational Excellence. As you know, our strategy here is centering on three key areas. First, leveraging data and member insight to operate and scale efficiently. Second, expanding in-house margins. And third, having operational discipline as we grow. We've made further progress over the quarter, again achieving positive cash flow from operating activities. Both in-house food and beverage margins improved year-over-year, despite continued cost inflation. During the quarter, we set ourselves to go further in this area by conducting a full review of our beverage range, which we expect to deliver even stronger profitability in the future.
Speaker Change: Turning to our second strategic priority operational excellence as you know our strategy here is centered on three key areas first leveraging data and member insight operate and scale efficiently second expanding and has margins that said, having operational discipline as we grow we've made further progress over the quarter again achieving.
Speaker Change: Positive cash flow from operating activities.
Speaker Change: In house food and beverage margins improved year over year, despite continued cost inflation.
Speaker Change: Over the quarter, we set ourselves to go further in this area by conducting a full review of our beverage range, which we expect to deliver even stronger profitability in the future as part of improving service and becoming more efficient we launched a new best in class HR system in the U K that will roll out globally. This will allow mind you spend more time with our members and their teams whilst also allowing.
Andrew Carnie: As part of improving service and becoming more efficient, we launched a new, best-in-class HR system in the UK that will roll out globally. This will allow our managers to spend more time with our members and their teams, whilst also allowing them to better manage their hours. Given the strength of our membership revenue, our house-level margins continue to improve in the quarter. Now, I will pass over to Thomas to give you more detail on the numbers and our updated guidance.
Speaker Change: To better manage their hours given the strength of our membership revenue our house ever margins continue to improve in the quarter now let me pass over to Thomas to give you more detail on the numbers and our updated guidance.
Thomas Glassbrooke Allen: Total revenues for the first quarter grew 3% year-on-year to $263 million. Membership revenues rose 20% year-on-year, while in-house and other revenues dropped 5% and 6%, respectively. House level contribution was up 6% year-on-year, with house level margins up to 25%. Our other contribution was flat year-on-year, both on an absolute and a margin basis. More detail on revenue. Year-on-year revenues were up $8 million, given by the increase in recurring membership revenues, which were 38% of total revenue in the quarter. Membership growth and pricing resulted in over $17 million in increased membership revenue.
Thomas Glassbrooke Allen: Thanks, Andrew total.
Thomas Glassbrooke Allen: Total revenues for the first quarter grew 3% year on year to $263 million.
Thomas Glassbrooke Allen: Membership revenues rose, 20% year on year, while in house, and other revenues dropped 5% and 6% respectively.
Thomas Glassbrooke Allen: <unk> contribution was up 6% year on year with house level margins up to 25%.
Thomas Glassbrooke Allen: Other contribution was flat year on year, both on an absolute and margin basis, giving.
Thomas Glassbrooke Allen: Giving more detail on revenue year on year revenues were up $8 million driven by the increase in recurring membership revenues, which were 38% of total revenue in the quarter.
Thomas Glassbrooke Allen: Membership growth and pricing drove a $17 million increase in membership revenues and.
Thomas Glassbrooke Allen: In-house revenues were down $6 million year-on-year to $110 million, while other revenues were $3 million lower at $53 million. Like-for-like in-house revenue for the quarter, we're down mid-single digits year-on-year. We outperformed the market in terms of football but saw lower sales per visit. This was partially driven by a shift away from alcohol sales in the quarter, most notably in China. Rapport declined 3% in a quarter, with occupancy up slightly, offset by lower ADR.
Thomas Glassbrooke Allen: In house revenues were down $6 million year on year to $110 million, while other revenues were $3 million lower at $53 million.
Thomas Glassbrooke Allen: Like for like in House revenue for the quarter were down mid single digits year on year, we outperformed the market in terms of footfall, but saw lower sales per visit.
Thomas Glassbrooke Allen: This was partially driven by a shift away from alcohol sales in the quarter, most notably in China.
Thomas Glassbrooke Allen: Revpar declined 3% in the quarter with occupancy up slightly offset by lower ADR.
Thomas Glassbrooke Allen: U.S. leisure rep was estimated to be down approximately 4% in the quarter, so our performance follows that trend. It's also worth noting that our first quarter REVFAR is still up 24% versus the same period in 2019. On other avenues, we saw growth of both Soho Home and Soho Works year on year, although offset by lowered sales in our stand-alone restaurants and townhouses, and reduced design and development.
Thomas Glassbrooke Allen: Leisure Revpar was estimated to be down approximately 4% in the quarter sorry performance follows that trend. It's also worth noting that our first quarter revpar up 24% versus the same period in 2019.
Thomas Glassbrooke Allen: On other revenues, we saw growth of our so home and so her works year on year.
Thomas Glassbrooke Allen: Offset by lower sales in our cellular restaurants in town houses and reduced design and development fees.
Thomas Glassbrooke Allen: Our first quarter adjusted EBITDA was $19.3 million, slightly lower year-over-year. Higher house level contribution was more than offset by higher runway T&A expenses. Partially driven by our recent and upcoming growth in Newmark, we expect EBITDA to grow again as revenue is accelerated and we move into seasonally higher revenue. Now discussing our balance sheet, we ended the quarter with $145 million of cash and cash equivalents and $664 million of net debt. We had positive cash flow from operating activities again in the quarter, our fourth consecutive quarter of positive cash flow, and a $20 million improvement from first quarter 2020. This was helped by having $6 million of positive working capital. However, our cash position fell $19 million quarter-over-quarter. Two key things to point out here.
Thomas Glassbrooke Allen: Our first quarter adjusted EBITDA was $19 3 million slightly lower year over year.
Thomas Glassbrooke Allen: Higher house level contribution was more than offset by higher run rate G&A expenses, partially driven by our recent and upcoming growth in new markets. We.
Thomas Glassbrooke Allen: We expect EBITDA to grow again as revenue has accelerated and we move into the seasonally higher revenue quarters.
Thomas Glassbrooke Allen: Now I'll discuss our balance sheet, we ended the quarter with $145 million of cash and cash equivalents and $664 million of net debt.
Thomas Glassbrooke Allen: We had positive cash flow from operating activities again in the quarter, our fourth quarter in a row and a $20 million improvement from first quarter of 2023.
Thomas Glassbrooke Allen: This was helped by having $6 million of positive working capital. However, our cash position from $19 million quarter over quarter, two key things to point out here first that is typically our seasonally lowest quarter in terms of cash flow from operations and we would expect it to ramp up meaningfully in the next three quarters.
Thomas Glassbrooke Allen: First, this is typically our seasonally lowest quarter in terms of cash flow from operations, and we would expect it to ramp up meaningfully in the next three quarters. And second, we had higher CapEx in the quarter given the recent opening of Portland and upcoming Sao Paulo and Scorpius properties. We continue to expect 90 to 100 million dollars of cap exits. We ended the quarter roughly five times net debt-y, but down from approximately seven times at the end of the first quarter of 2020.
Thomas Glassbrooke Allen: Second we had higher capex in the quarter given the recent opening of Portland, and upcoming Sao Paolo and Scorpius properties, we continue to expect $90 million to $100 million of Capex. This year.
Thomas Glassbrooke Allen: We ended the quarter at roughly five times net debt to EBITDA down from approximately seven times at the end of the first quarter of 2023.
Thomas Glassbrooke Allen: Moving to guidance, given good cost controls, we are raising the low end of our EBITDA guidance, with a range now at $157 to $165 million from $155 to $165 million. We last gave guidance roughly 8 weeks ago, so we are reaffirming guidance on the rest of our metrics. I won't run through each of them in detail, but I think it's just worth reiterating the sequential improvement we've seen in in-house revenue over the course of the first quarter and into April. Thanks, Thomas.
Thomas Glassbrooke Allen: Moving to guidance given good cost controls, we are raising the low end of our EBITDA guidance with a range now of $157 million to $165 million from a $155 million to $165 million.
Thomas Glassbrooke Allen: We last gave guidance roughly eight weeks ago. So we are reaffirming guidance on the rest of our metrics I won't run through each of them in detail, but I think it's just worth reiterating the sequential improvement we've seen in in house revenue over the course of the first quarter and into April. Thanks.
Andrew Carnie: Thanks, Thomas. Today we published our 2023 ESG report, which shows the progress Soho House is making in these areas. Two key highlights I'd like to mention. One is a unique sustainability measure where we are recycling out-of-use bed linen to produce paper for our houses.
Speaker Change: Thanks, Thomas Today, we published our 2023 ESG report, which shows the progress <unk> is making in these areas.
Speaker Change: Two key highlights I'd like to mention a.
Speaker Change: Our unique sustainability measure, while we are recycling <unk> paper for our houses.
Andrew Carnie: And in terms of social impact, we're proud to have now supported more than 2,000 people through our Creative Access Programmes, Soho Mentorship, and Soho Fellowship, which helps remove barriers for creatives from lower, social, economic, and underrepresented backgrounds. In closing, it's been a solid quarter for the business, with strong demand for membership and high growth in membership revenues. Meanwhile, our operational excellence initiatives continue to support profitability, and adjusted EBITDA was ahead of market expectations.
Speaker Change: In terms of social impact, we're proud to have now supporting more than 2000 people to our creative access programs to him and ship set of Fellowship, which helps you made barriers for creators from lower social economic and underrepresented backgrounds.
Speaker Change: In closing, it's been a solid quarter for the business with strong demand in membership and high growth in membership revenues. Meanwhile, our operational excellence initiatives continued spot profitability and adjusted EBITDA was ahead of market expectations.
Andrew Carnie: We remain focused on delivering for our members and further driving membership value. We remain as confident as ever in the growth opportunities ahead for the business. I would like to thank all our teams globally and our members for their continued support and loyalty. With that, we will now open up to questions. Operator, we can take the first question, please. As a reminder, you can either ask your questions over the phone or submit them over the web.
Speaker Change: We remain focused on delivering for our members and further driving membership value.
Speaker Change: We remain as confident as ever in the growth opportunities ahead for the business.
Speaker Change: I would like to thank all our teams globally and our members for their continued support and loyalty.
Speaker Change: With that we will now open up to questions. Operator, we can take the first question. Please as a reminder, you can either ask your questions over the phone or submit them over the webcast.
Audra: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. We'll take our first question from Shaun Kelley at Bank of America.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press Star one again.
Speaker Change: We will take our first question from Shaun Kelly of Bank of America.
Shaun Clisby Kelley: Hi, good morning, everyone. Thank you for taking my questions. Andrew or Thomas, I'm just hoping we could talk a little bit more about the consumer here. You know, for many of us who've covered stocks throughout this earnings season, I feel like, you know, we've had a meaningful amount of mixed signals out there. And obviously, you have your own lens and a lot of market-specific details.
Shaun Clisby Kelley: Hi, Good morning, everyone. Thank you for taking my questions.
Shaun Clisby Kelley: Andrew Thomas just hoping we could talk a little bit more about that.
Shaun Clisby Kelley: Consumer here for many of US you've covered stocks throughout this earning season I feel like we have.
Shaun Clisby Kelley: It had a meaningful amount of mixed signals out there and obviously you have your own lens and a lot of market specific details. So you gave us a couple clues here sounded like footfall was up but spending was down but but obviously Thomas you mentioned a couple of times the improvement through the quarter. So can you help us break that down just a little further in terms of behavior.
Andrew Carnie: So you gave us a couple of clues here. It sounded like footfall was up, but spending was down. But obviously, Thomas, you mentioned a couple of times the improvement through the quarter. So can you help us break that down just a little further in terms of behavior? And if you were to strip out kind of dry January plus weather, you know, just kind of how would you encapsulate the health of the consumer right now?
Shaun Clisby Kelley: And if you were to strip out kind of dry January plus weather.
Shaun Clisby Kelley: Just kind of how would you encapsulate the health of the consumer right now.
Andrew Carnie: Hi Shaun. So, yeah, I mean, we're seeing a similar picture to what you've been hearing from other folks. The first thing is, because we're a membership club, we're pleased to see our members consistently using our facilities. So that's why our football trends are better than what you've been hearing or seeing across the general market. So that's really positive for us. What we've seen is when members come in, they're just spending a little bit less, a little bit more cautiously. We talked on the last call, I think, about dry January. The good news is that we have definitely been seeing it get better sequentially throughout the year. You know, I don't want to talk about the weather.
Speaker Change: Hi, Sean.
Speaker Change: Yes.
Sean: We're seeing similar picture to what you've been hearing from other folks.
Speaker Change: First thing is because we are a membership club we're pleased to see our members consistently easing our houses. So that's why I'll footfall trends are better than what you've been hearing or seeing across whichever market. Since we are positive for us.
Speaker Change: What we've seen is where amendments come in they are just spending a little bit less a little bit more cautiously we talked on the last call I think about dry January.
Speaker Change: The good news is that we have definitely been seeing it get better sequentially throughout the year.
Speaker Change: I don't want to talk about weather.
Andrew Carnie: It's all about what we can do with our members. And you know, the trend is improving, especially through March and April and into May. The good news is that, obviously, we're protected differently than other folks because we have revenues coming in from membership. So that's why we can still post a total revenue growth for the quarter. But we are more confident than we were when we last talked to you about eight weeks ago.
Speaker Change: It's all about what we can do with our members.
Speaker Change: Yes.
Speaker Change: The trend is improving especially through March and April and into May.
Speaker Change: The good news is that obviously we're protected.
Speaker Change: Differently than other sites that we have revenues coming in from membership. So that's why we can still post a total.
Speaker Change: Revenue growth for the quarter.
Speaker Change: But we are more confident than we were when we last talked to you about eight weeks ago.
Andrew Carnie: Great, thanks for that. And then just any geographic differences or call outs we've seen kind of the same. I mean, there's been, you know, some areas that have been, you know, weaker than others, but obviously, you have a couple markets that are particularly important. So just anything in London, or any differences in the European consumer versus the European member versus the, you know, the American side here, either in spending or traffic patterns that are notable? The short answer is: no.
Speaker Change: Yeah.
Speaker Change: Great. Thanks for that and then just any geographic differences or callouts, we've seen kind of the same I mean, there has been.
Speaker Change: Some areas that has been weaker than others, but obviously you have a couple of markets that are particularly important to just.
Speaker Change: Anything in London, or any differences in the European consumer versus the European.
Speaker Change: Member versus the other.
Speaker Change: American side here.
Speaker Change: Either be spending our traffic patterns that are notable.
Speaker Change: Short answer is no.
Andrew Carnie: We haven't seen, it's all very similar across every single region from Asia to America to Europe to the UK, both at the beginning of the year and what we're seeing subsequently getting better. So it's pretty consistent, Shaun.
Speaker Change: No.
Speaker Change: We haven't seen it all very similar across every single region from Asia to America <unk>.
Speaker Change: Hey.
Speaker Change: Thanks.
Speaker Change: At the beginning of the year and what we're seeing sequentially getting better so it's pretty consistent.
Speaker Change: Thank you very much.
George Arthur Kelly: Next, we'll move to George Kelly at Roth MKM.
Speaker Change: Next we'll move to George Kelly at Roth MK M.
Speaker Change: Okay.
George Arthur Kelly: Hey, everyone. Thanks for taking my question. So maybe if I could start with just a kind of follow-up from that first question. I was curious if you could give any more detail or quantification just around the improvement that you saw in in-house spending. I don't know if you could contrast, you know, what the growth kind of looks like in April versus January, that would be helpful.
George Arthur Kelly: Hey, everyone. Thanks for taking my questions.
George Arthur Kelly: So maybe if I could start with just a.
George Arthur Kelly: Kind of follow up from that first question I was curious if you could give any more detail or quantification just around the improvement that you saw in her spending I don't know if you could contrast.
George Arthur Kelly: What the growth looked like in April versus January that'd be helpful.
Andrew Carnie: Hey George, sure.
Speaker Change: Hey, George.
George Arthur Kelly: Sure. So look if you think about overall are our growth was down mid single digits like for like.
George Arthur Kelly: In the quarter.
George Arthur Kelly: January was down high single digits.
George Arthur Kelly: February was down middle single digits, and then March and April have improved.
George Arthur Kelly: Low single digits.
George Arthur Kelly: Yes.
Speaker Change: Okay. Thank you that's helpful. And then second question for me.
Speaker Change: You referenced these member surveys that you've done.
Andrew Carnie: So look, if you think about overall, our growth was down mid single digits, like like in the quarter. I'd say January was down high single digits. February was down middle single digits. And then March and April have, you know, improved to down low single digits.
Speaker Change: And I'm curious given the spending weakness.
Speaker Change: You've seen I know it's out of your control.
Speaker Change: But is there anything that sort of jumps out in the surveys that youre working to address.
Andrew Carnie: Okay, thank you. That's helpful. And then, second question for me. You reference these member surveys that you've done. And I'm curious, given the spending weakness that you've seen, I know some of it's out of your control, but is there anything that sort of jumps out in the surveys that you're working to address?
Speaker Change: Okay. Good question.
Speaker Change: Not really.
Speaker Change: We I think Youre right is out of control spending right now and it's across the whole.
Speaker Change: Nope.
Speaker Change: We are continuing to focus on our member improvement plans, which you referenced.
Andrew Carnie: Good question. Um, not really. We, you know, I think you're right, it is out of control spending right now. I mean, it's across the whole, you know, globe. We are continuing to focus on our member improvement plans, which we've referenced at https://youtu.beo.co.uk
Speaker Change: And time to get on the earnings calls which is.
Speaker Change: Thanks Sam.
Speaker Change: Experiencing the houses.
Speaker Change: None of the survey just saying anything.
Speaker Change: Jimmy very positive.
Speaker Change: We're just focused on improving the member experience.
George Arthur Kelly: Okay, understood. I'll hop back in with you. Thank you.
Speaker Change: Okay understood I'll hop back in queue. Thank you.
Sharon Zackfia: We'll take our next question from Sharon Zackfia at William Blair.
Speaker Change: We'll take our next question from Sharon Zackfia William Blair.
Sharon Zackfia: Hi, thanks for taking the question. I'm just curious about the member satisfaction scores. I think you alluded to them improving. Is that a global improvement you're seeing, or is there any region that you're seeing more pronounced improvement? And if so, what would you attribute that to?
Sharon Zackfia: Hi, Thanks for taking my question just curious on the member satisfaction scores I think you alluded to that improving is that a global improvement youre seeing or is there any region that youre seeing more pronounced improvement and if so what would you attribute that to.
Andrew Carnie: Hey, yeah, so we obviously measure it on a weekly basis globally through our feedback directly from the app when a member finishes eating with us or drinking with us. You know, so that's a very consistent way of measuring our performance, especially the atmosphere in the house service, the food and beverage that we provide. We have seen most marked improvement in North America. Now, if you remember, we changed leadership there.
Speaker Change: Hey, yes, we obviously measure it on a weekly basis globally through.
Speaker Change: The feedback directly from the App when Amanda finishes.
Speaker Change: Eating with <unk>. So that's a very consistent way of measuring our performance, especially on atmosphere in the house this food and beverage that we provide we have seen most markedly and improvement in North America.
Speaker Change: Now if you remember we.
Speaker Change: We changed leadership that.
Andrew Carnie: 6 months ago, which we talked about in a previous AIMS call, and we had a whole heap of improvement initiatives in North America. We are definitely seeing that region perform a lot better, but most importantly, our members are telling us we're doing a better job.
Speaker Change: Six months ago, which we talked about in the previous earnings call and we had a whole heap of improvement initiatives in North America. We are definitely seeing that region perform a lot better but most importantly, our members are telling us we're doing a better job.
Andrew Carnie: Thanks for that. And then, on Soho Friends, is the continued decline in that membership base just a de-emphasizing of Soho Friends, or is there something else we should think about there? Sharon
Speaker Change: Thanks for that and then on some of those brands.
Speaker Change: The continued decline in that membership base. So is that just deemphasizing.
Speaker Change: Deemphasizing.
Several friends or is there something else, we should think about there.
Andrew Carnie: Um, Sharon, I think you answered your own question there. So it is a de-emphasis on Soho Friends. We want to continue to support the people who want to be Soho Friends. But that's something that we we used to invest a lot in, we had Friends Studios, but we found that, you know, a better way to run the company was to really focus on the core Soho House member while still providing, you know, an attractive opportunity with Friends. And so that's, that's, you know, that's why we're seeing the natural decline there.
Speaker Change: Sharon I think Ed you.
Sharon Zackfia: You answered your own question that so it is a de emphasis on furlough for and we want to continue to support the people who want to be so friends, but thats something that we used to invest a lot and we used to have friends studios.
Sharon Zackfia: We found that a better way to run the company was to really focus on of course, Soho House member, while still providing attractive opportunity with friends and so.
Sharon Zackfia: That's why we're seeing the natural declines there.
Speaker Change: Okay. Thank you.
Steven Emanuel Zaccone: And as a reminder, if you would like to ask a question, press star 1. We'll go next to Steven Zaccone at Citi.
Speaker Change: And as a reminder, if you would like to ask a question press Star one well go next to Steven Zaccone at Citi.
Steven Emanuel Zaccone: Great, thanks. Thanks for taking my question. I wanted to ask about the maturity of some of the newer new houses you've opened. It sounds like it's progressing well. Are there still regions or houses where you see opportunity to drive improved house level contribution? It'd be helpful to hear you talk through that.
Steven Emanuel Zaccone: Great. Thanks, Thanks for taking my question.
Steven Emanuel Zaccone: I wanted to ask about the maturity of some of the newer new houses you've opened it sounds like it's progressing well.
Steven Emanuel Zaccone: There are still regions or houses, where you see opportunity to drive.
Steven Emanuel Zaccone: Improved how sabo contribution maybe it'd be helpful to hear you talk through that.
Andrew Carnie: Hey, great question. So if you think we've opened 25 houses in the past four or five years, they all continue to progress up the maturation curve, and they all continue to have more opportunities. We're really pleased with some of the newer markets that we've gone into, in particular Mexico City, in particular Portland. Austin, Nashville, we're super excited about San Paolo. So, all of them are performing in line with our expectations, and to answer the second part of your question, is there more opportunity? For sure. There's more opportunity to open more houses in North America, in existing markets and new ones, and also to grow in other regions.
Steven Emanuel Zaccone: Hey.
Speaker Change: Great question.
Speaker Change: We think we've opened 25 houses in the past four or five years. They all continue to progress at the maturation curve and they will continue to have more opportunity. We're really pleased with some of the newer markets that we've gone into in particular, Mexico City in particular Portland.
Speaker Change: Boston Nashville, with Super excited about Sunpower life.
Speaker Change: So all of them are performing in line with our expectations and to answer your second part of your question is there more opportunity for sure. There is more opportunity to open more houses in North America in existing markets and new and also to grow in other regions.
Andrew Carnie: Okay, I got it. And then my follow-up question was just on pricing. So how are you thinking about membership pricing? You know, over the next couple of years. I think this year, you've made a slight modification, right? Taking price increases down a bit for existing members. Should we expect that's the trend going forward? We're like new members are probably going to pay a higher price per year increase, and existing members are probably going to continue at this lower level. Thank you.
Speaker Change: Okay got it and then.
Speaker Change: My follow up question was just on pricing so.
Speaker Change: How are you thinking about membership pricing.
Speaker Change: Over the next couple of years I think this year, you've made a slight modification right taking price increases down a bit for existing members.
Speaker Change: Should we expect that the trend going forward like new members going to probably pay a higher price per year increase in existing members are probably going to at this lower level. Thank you.
Andrew Carnie: Yeah, I think I've said this before. We're focused on delivering the best member experience. I feel really good about our pricing. It's the biggest, you know, where we find the biggest opportunities around driving efficiency in the back end. So we're very comfortable with our pricing at the moment.
Speaker Change: Yes, I think I've said this before we're focused on delivering the best member experience.
Speaker Change: I feel really good about our pricing is the biggest where we find the biggest opportunities around driving efficiencies in the backend. So we're very comfortable with our pricing at the moment.
Speaker Change: Okay.
Steven Emanuel Zaccone: Okay, last one, if I could just squeeze one in. Is there any update at all on the possibility of considering strategic alternatives? It doesn't sound like you've made any comments here, but I was just curious since there were some comments the last time and there was a letter put out, is there anything you can share at this time?
Okay last one if I could just squeeze one and is there any update at all.
Speaker Change: The possibility of considering strategic alternatives. It sounds like you've made any commentary, but just curious since there was some comments last time and there was a letter put out just is there anything you can share at this time.
Andrew Carnie: Thanks, George. So, as you know, last fall, the board set up a special committee of independent members of the board to assess certain strategic transactions. The company will make an announcement if and when there's something to announce. Okay, thanks very much. I call you George. I was Steve, sorry. And this does conclude today's conference call. We thank you for your participation; you may now hang up. Thanks for watching!
Speaker Change: Thanks George.
Speaker Change: Last fall the board kind of a special committee of independent members of the board to assess certain strategic transactions.
Speaker Change: The company will make an announcement, if and when there's something to announce.
Speaker Change: Sure.
Speaker Change: Okay. Thanks very much.
Speaker Change: I call your Giordano, Steve sorry.
Unknown Executive: And this does conclude today's conference call. We thank you for your participation. You may now disconnect.
Speaker Change: And this does conclude today's conference call. We thank you for your participation you may now disconnect.
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