What happened
Shares of Soho House (SHCO -3.24%) beat the market early Friday, rising 14% by 11:30 a.m. ET. The S&P 500 was flat during that time. The increase added to a great year for shareholders. The membership platform specialist is up over 80% so far in 2023, while the broader market is up 16%.
Friday's rally came after the company announced fiscal second-quarter earnings results that pleased investors with strong metrics in areas like sales and profitability.
So what
Membership levels rose to 248,000 in the selling period that ran through early June, which translates into a 28% increase. Executives said the private platform's waiting list is at an all-time high in another indication of strong demand.
This membership boost contributed to a 35% increase in membership revenues. Daily revenue per room was also up 13%. "We delivered another strong quarter of results," CEO Andrew Carnie said in a press release.
The company reported a net loss for the period. However, operating income improved to $20 million from a $65 million loss a year ago. Non-GAAP earnings roughly doubled to $32 million.
Now what
Investors were pleased to hear that management sees a brighter future ahead for the business. Soho House raised its 2023 outlook for membership levels, revenue, and non-GAAP earnings.
Shareholders would still like to see the company return to profitability on a net level. Cost cuts are helping in this area, and so is the steady increase in prices. These metrics confirm that trends are moving in the right direction here. Net losses in this past period were just $3 million, or $0.01 per share.
Given those operating and financial successes, it's no surprise that the stock would be enjoying a bounce following this earnings report. Soho House is attracting more members than expected, and earnings are rising at a faster rate than management previously forecast. If the company can extend that momentum in future quarterly announcements this year, the stock is likely to continue beating the market.
