Town Sports International Holdings Earnings: Here’s Why Investors are Ambivalent Now

Town Sports International Holdings Inc. (NASDAQ:CLUB) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Town Sports International Holdings Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 17.39% to $0.19 in the quarter versus EPS of $0.23 in the year-earlier quarter.

Revenue: Decreased 1.74% to $120.11 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Town Sports International Holdings Inc. reported adjusted EPS income of $0.19 per share. By that measure, the company missed the mean analyst estimate of $0.19. It missed the average revenue estimate of $120.89 million.

Quoting Management: Robert Giardina, Chief Executive Officer of TSI, commented: “Our overall results were broadly in line with our expectations with a sequential improvement in personal training revenues as we continue to make nice strides with our personal training membership product. We are particularly pleased to have exceeded our EBITDA expectations for the quarter and generated $15 million in free cash flow to end the quarter with a cash balance of $69.5 million. After a soft start to the year, which we believe was impacted by macro factors, our overall business is back on plan as we head into the third quarter. We are excited about the direction of our business, including an outlook for improved comparable club revenue, driven by personal training and pricing, in the back half of the year.”

Key Stats (on next page)…

Revenue increased 0.8% from $119.16 million in the previous quarter. EPS increased 5.56% from $0.18 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.16 and has not changed. For the current year, the average estimate is a profit of $0.69, which is the same with that ninety days ago.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

More Articles About:   , , ,  

More from The Cheat Sheet