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Life Time Fitness reported higher second-quarter 2011 revenue and profit on increased membership and dues, and continued to raise its guidance.
The Chanhassen, Minn.-based national chain of fitness, sport and spa clubs reported its revenue up 11.1 percent to $256.7 million for the second quarter, compared to $231.1 million during the same period a year ago. Net income for the quarter was $24.9 million, or $0.61 per diluted share, compared to net income of $21.9 million, or $0.53 per diluted share, for the second quarter 2010.
Membership dues grew 9.2 percent and total membership increased 5.1 percent to 664,307 as of June 30, 2011, compared to the same date a year ago. Life Time Fitness opened one new center each in Colorado and Nevada during the quarter. Same-center revenue, or centers opened for 13 months or longer, increased 5.4 percent.
Life Time Fitness Chairman, President and CEO, Bahram Akradi said the company’s strong balance sheet allows it to retire $70 million in mortgage debt and entered into a restated revolving credit agreement. That increases the amount of credit available to the company from $470 million to $660 million at “favorable interest rates,” extended through June 30, 2016, “which supports our plans for future growth,” Akradi said.
“Our unwavering focus remains on differentiating Life Time as ‘the healthy way of life company’ that uniquely helps individuals, companies and communities achieve their total health objectives, athletic aspirations and fitness goals by participating in their areas of passion both within and outside of our centers. Moving forward, we will continue driving member engagement by providing the places, people and programs that help them pursue their passions and achieve their goals.”
Looking ahead, Life Time increased its full-year revenue guidance to grow by 8-10 percent to $985 million to 1 billion – up from a pervious prediction of 7-9 percent growth. Net income is expected to increase 15-18 percent to between $95.5 to $97.5 million or $2.25 to $2.30 diluted earning per share – up from a previous prediction of 14-18 percent growth.
Investors cheered the earnings release July 21, sending the stock up 7 percent.
Champion helps Hanes Brand lift 2Q revenue
Hanesbrands (NYSE: HBI), parent of fitness apparel brand Champion, reported higher revenue and steady profits as the company said it was able to lock in cotton prices for the year and pass on some price increases.
The Winston Salem, N.C.-based clothing company reported revenue of $1.23 billion for the second quarter – up 13.9 percent from the same period a year ago. Second-quarter net income came in at $86.8 million – up just 1.6 percent, keeping diluted earnings per share steady at $0.87.
Revenue growth was fueled by sales gains across the company, led by a 26 percent increase in outerwear, including strong sales of Champion Activewear, officials said.
Company officials said they locked cotton prices in for the remainder of the year and passed on price increases to consumers, along with tight control of general administrative costs.
Accell 2Q revenue, profit up, but fitness down
Accell Group N.V., parent company to Accell Fitness, and its Tunturi and Bremshey brands, reported higher revenue and profit for the first half of 2011, despite a decline in fitness sales.
The Netherlands-based company, which primarily focuses on cycling, reported revenue up 9 percent to EUR 373 million (USD $535.8 million) and profit up 13 percent to EUR 27.3 million (USD $39.2 million), compared to the same period a year ago.
Six percent of revenue growth was attributable to the company’s acquisition of Accell Bisiklet in Turkey and a 50-percent stake of Atala in Italy. The company said it continues to seek acquisition opportunities.
Company officials said the remaining growth came from its cycling units, thanks to an early spring in Europe, plus a 26-percent increase of electric bike sales and a 14-percent increase in sport bikes. Bike parts and accessory sales also increased 14 percent, while traditional bike sales fell 3 percent. Officials noted that North American bike sales declined, in part due to unfavorable exchange rates, while bike parts and accessory sales rose in this market.
In fitness, which only accounts for 3 percent of Accell’s business, first half 2011 revenue came in at EUR 10.1 million (USD $14.5 million), down 29 percent from a year ago. Company officials said the decline was due to the transfer of distribution in Germany and the United Kingdowm to third-party distributors, which it plans to do the same in North America.
(Conversion of Euro into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of July 22, 2011.)
Precor parent expanding e-commerce
Amer Sports, parent company fitness equipment brand Percor, said it will expand the distribution of its products through its own e-commerce channels. After successfully piloting e-commerce sites in France with some of its outdoor brands, such as Salomon and Suunto, the company will gradually open new web-shops in Europe and North-America.
The company said it can better tell its brand story through the sites following “consumer habit changes in purchasing and information seeking.” The pilot sites doubled the company’s brands’ website traffic and also increased traffic to the company’s retail partners, officials said.
–Compiled by David Cucas
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