Life Time Fitness, Inc. (NYSE:LTM) reported higher revenue and profit for the first quarter on increased membership and raised guidance moving ahead.
The Chanhassen, Minn.-based national chain of fitness, sport and spa clubs reported first-quarter revenue, ended March 31, 2011, up 9.5 percent to $240.6 million from the same period a year ago. Same-center revenue, of those open 13 months or longer, rose 5.3 percent.
Life Time’s profit rose to $20.8 million, or $0.51 per diluted share, in the first quarter 2011 – up 17 percent from a profit of $17.8 million, or $0.44 per diluted share, during the first quarter 2010.
Life Time memberships grew 6 percent in the first quarter from a year ago to 650,784 members as of March 31, 2011. Membership dues rose 8.9 percent from a year ago to about $158 million during the first quarter.
During the quarter, Life Time opened a large-format center in Syosset, N.Y., and company officials said the company plans to open its second and third large-format centers in Colorado Springs, Colo. and Summerlin, Nev. in 2011.
Looking ahead, Life Time expects revenue to increase 7 to 9 percent, or to between $980 to $995 million, in 2011 up from previous projections of 6 to 8 percent growth.
Net income is expected to increase 14 to 18 percent, or between $92 million and $95 million, or between $2.21 and $2.29 per diluted share, in 2011, up from previous projections of 13 to 18 percent growth, or between $91 million and $95 million, or between $2.19 and $2.29 per diluted share.
Hanes sees success in raising prices
HanesBrands (NYSE: HBI), which owns fitness wear brand Champion, reported higher revenue and profit for the first quarter, and it increased future expectations as it sees success in raising prices to combat higher cotton costs.
The Winston Salem, N.C.-based clothing company reported revenue of $1.04 billion for the first quarter, ended April 2, 2011 – up 12 percent from the same period a year ago. First-quarter net income for Hanes grew nearly 32 percent to $48.1 million from the same period a year ago.
New-product successes for Champion, which company officials said was the fastest growing major brand in active wear, included women's fitness bottoms and men's double dry active wear.
The company raised its full-year 2011 earnings guidance to a range of $2.70 to $2.90 per diluted share, up from previous projections between $2.60 and $2.80 per diluted share. Hanes' new net sales range is $4.9 billion to $5 billion, with the low end of the range increased from $4.85 billion.
The new earnings expectations “reflect multiple price increases put in place through late summer (2011) and the expectation of further price increases in the fourth quarter,” company officials said in the earnings release.
The company said it saw cotton prices rise nearly 60 percent from a year ago – up from $0.52 per pound to $0.83 per pound in the first quarter.
“We are raising prices appropriately to deal with input-cost inflation, and as we leverage our scale and infrastructure, the benefits of increased sales and acquisitions are dropping through to the bottom line,” Hanes Chairman and CEO Richard A. Noll said in statement.
--Compiled by David Clucas