A Life Time Group Holdings sign at the New York Stock Exchange on Oct. 7, 2021.
The cost of running its fitness centers, including new and ramping locations, rose 8.2% year over year during the quarter to $319.4 million, the company said.
Life Time CEO Bahram Akradi said the investments — including new pickleball courts and personal training programs — have helped drive member engagement at its clubs, with average member visits up 24% since 2019. The company has a total of 170 centers.
“With 150 billion impressions a year, it’s time for Lifetime to start expanding,” said Akradi. “What other products and services can consumers buy from us?”
The program changes are an attempt to keep Life Time’s affluent customer base satisfied as prices rise across the board and many consumers increasingly value premium offerings.
Life Time increased its prices at many of its locations in recent years, though pricing varies by market. Akradi said Wednesday the bulk of price changes have already been made, but another 20% to 25% of the company’s clubs will have further opportunity to increase member prices over the next six to 12 months.
“We aren’t taking advantage of all the different connections we have and all the different programs we have, so there is essential work being done to systematize all of that,” said Akradi. “Any product that we put out there has to be absolutely the best.”
Akradi said the new offerings are worthwhile long-term investments as ways to strengthen the luxury brand. Higher engagement from members means higher return visits and increased spending over the lifetime of the relationship, he said.
The company’s investment in an assisted stretching program called “Dynamic Stretch,” for example, could present a $50 million market opportunity in 2024, according to the company.
Life Time is also starting to think about bringing weight loss drugs to members’ fitness plans as a way to lean in on the latest GLP-1 trend, Chief Operating Officer Jeff Zwiefel told CNBC.
For the third quarter, Life Time reported net income of $7.9 million, or 4 cents per share, on revenue of $585.2 million. During the third quarter of last year, the company earned $24.7 million, or 12 cents per share, on revenue of $496.4 million.
Don’t miss these CNBC PRO stories: