Life Time Group Holdings is inching closer to being back in the black.
Life Time rebounding after pandemic slowdown
The Chanhassen-based company saw a major jump in revenue in 2022 in part because of price increases.
January 10, 2023 at 3:52PM
The Chanhassen-based fitness center operator's preliminary financial results released this week forecast a profit of $10 million to $12 million for the last three months of 2022, instead of losing up to $10 million as executives earlier expected.
For the full year, Life Time predicts a loss of $2 million to $4 million, which is still a large improvement from the loss of nearly $580 million the company experienced in 2021 after enduring temporary closures and other restrictions on its fitness centers during the pandemic.
Revenue for the full year is expected to be a little more than $1.8 billion, an uptick of about 38% from the year before.
"We have rewired the business significantly," Chief Executive Bahram Akradi said Monday at the ICR Conference in Orlando, Fla.
Price increases for memberships are a large driver of Life Time's growth. Akradi said the higher dues still make sense even in the face of a possible recession because Life Time is focused on providing a high-end experience for customers who can afford it.
Dues now average about $162 a month; however, new memberships cost about $204 a month, Akradi said.
Life Time has also expanded its programming. The company now has about 430 dedicated pickleball courts, with a goal to have 600 to 700 by the end of 2023. Other growth areas include small group training, in-person personal training and the new Arora programming for older members.
Akradi said the company's corporate office and fitness center staff had grown too large in recent years, so Life Time cut middle management jobs and the bulk of its sales staff.
For 2023, the company's goal is to surpass its pre-pandemic 2019 revenue despite challenges with rent increases, inflation and other costs.
"We are starting 2023 [at a] significantly better starting point than '22 in the dues revenue," Akradi said. "And that plus the margin adjustments we have made should give us a strong, strong year."
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