YogaWorks Inc., Culver City, California, reported $15.2 million in third quarter 2018 revenue, a 12.6 percent year-over-year increase, according to financials released Nov. 14. This marks the company’s third consecutive quarter of growth since going public in 2017.
However, YogaWorks continues to experience growing net losses, reporting a loss of $13.9 million during the quarter. This compares to a net loss of $4.6 million during the same period last year.
The top priority for YogaWorks’ upper management is to stabilize the business across multiple initiatives, CEO Rosanna McCollough said in a media release.
“These actions include: refinement of our overall promotional strategy, enhancements to our product offering, an updated marketing strategy and the optimization of our studio base,” McCollough said. “Once we believe we have achieved our objectives, we plan to resume our acquisition strategy and remain confident in our position as the acquirer of choice.”
YogaWorks also reported an adjusted EBITDA loss of $1.8 million versus a loss of $432,000 during the third quarter of 2017.
The company currently operates 70 studios, which is an increase of 17 locations from the same time last year. The increase in studio numbers reflects the recent acquisitions of three Prana Power Yoga's studios, as well as two Inner Strength Studios, all in the Boston area. The company recently closed one location on Comm Avenue in Boston due to financial underperformance, McCollough said.
In a Nov. 14 call with shareholders, McCollough further elaborated on YogaWorks’ stabilizing initiatives, which include reducing class package discounts and promoting monthly memberships.
“Beginning with our promotional strategy, as I mentioned earlier, we chose not to 'anniversary' many of the class package promotions from last year, and we also reduced the amount of discounts in the class package promotions we ran during the third quarter,” she said. “Instead, we are encouraging our students to select the class packages or membership offerings that best align with their intended usage pattern rather than focus strictly on price.
"At the same time, we elevated sales efforts toward driving monthly memberships for students who wish to come two or more times per week, which has resulted in three months of sequential improvement in membership revenue. This is a positive trend. We have also seen a decline in the inventory of class packages per user as students are buying on a more natural versus promotional cadence. This is also a positive sign.”
McCollough said she expects year-end 2018 revenue in the range of $57.5 million and $60.5 million, versus $54.5 million for the fiscal year of 2017.
YogaWorks ranked No. 27 on Club Industry's Top 100 Health Clubs of 2018 list.