Soho House & Co (SHCO) faced a sharp decline in profit margins in Q4 and missed earnings projections significantly.
The stock today looks risky due to poor business quality and substantial safety concerns.
See Soho House’s full financials, growth trends, and analyst forecasts on TIKR >>>
Q4 Notable Points:
- Revenue: $305.6M (0.01% estimate beat) (up 5.08% from last year)
- Operating Margins: -23.12% (-205.13% estimate miss) (down 1751 basis points from last year)
- Adjusted EPS: -$0.07 (-37.60% estimate miss) (down 58.43% from last year’s same quarter)
See the full earnings transcript >>>
1. Financial Stability Concerns
Despite its revenue growth, Soho House faces significant financial hurdles, chiefly a notable net loss which grew this year.
The company reported a net loss of $91.7 million in Q4 and $163 million annually, influenced heavily by non-cash FX losses and impairment charges.
These figures raise questions about Soho’s financial sustainability and cost management strategies.
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2. Aggressive Expansion Strategy
Soho House continues its aggressive expansion, opening new locations worldwide, including prestigious sites like Sao Paulo and Portland.
This expansion contributes to a 7% yearly revenue growth and an improved membership base.
However, the associated pre-opening and operational costs significantly impact profitability, reflected in their EBITDA margins.
3. Valuation and Investment Appeal
Despite financial instabilities, Soho House remains potentially undervalued with a Next Twelve Months (NTM) EV/Revenue multiple slightly below its 5-year average.
This could attract investors looking for growth opportunities in lifestyle and hospitality sectors, betting on the company’s long-term brand strength and market expansion.
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TIKR Takeaway
Soho House & Co showcases robust membership growth and global expansion, but its financial stability remains under scrutiny due to increasing losses and operational costs.
Is Soho House a buy today? Use TIKR to analyze the company’s international growth potential, margin trends, and valuation metrics.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
