Life Time Fitness clubs continue to attract new members, but the number of people dropping the fancy clubs has started to creep up. And those that stay are cutting back on services such as spas and personal training.
In a conference call with analysts Thursday, CEO Bahram Akradi said that until recently, a lot of people might keep their memberships for several months even though they weren't using the clubs. "That's changed in this environment," he said. "When somebody looks at that Visa statement, and they know that times are tougher, they're making the decision a little bit quicker to leave."
The company still expects revenue and earnings to grow this year, although by less than it had previously predicted. It also expects to open slightly fewer new clubs in the next two years because of the tighter credit markets' impact on financing.
"They did a pretty good job of executing in a difficult market, much better than some consumer-oriented companies" said Anthony Gikas, an analyst at Piper Jaffay & Co. "But things are going to be challenging for them for a while."
SUSAN FEYDER
