ClubCorp, Dallas, reported its eighth straight quarter of record results with first quarter revenue of $214.9 million, according to financials released on Wednesday.
The $214.9 million reflected a 6.3 percent increase over the first quarter of 2015 and was a result of "solid increases" in membership dues, food and beverage, and golf operations revenues, according to a media release.
"Our golf and country club division delivered revenue growth in all three major revenue streams," Eric Affeldt, CEO, ClubCorp, said in the release. "Our results this quarter demonstrate strong member demand for our differentiated leisure product, newly reinvented clubs and our O.N.E. offering. We are confident that our three-pronged growth strategy of organic growth, reinvention and acquisitions continues to deliver consistent growth and will continue to add long-term value to our members and shareholders."
ClubCorp reported 117,602 members in the first quarter across its 207 clubs, up 1.1 percent from the first quarter of 2015 (116,303). Approximately 51 percent of ClubCorp's members are enrolled in the O.N.E. membership program or similar upgrade offerings. Club Corp operates 159 golf or country clubs, and 48 business, sports and alumni clubs. Many of ClubCorp's properties include fitness amenities.
In a call with analysts sharing more details about the first quarter, the company shared insights into what ClubCorp members desire in a private club experience. The traditional private club experience includes exclusivity and status; golf-centered recreation; formal fine dining rooms; no work, no cell phones, no jeans and sometimes no children; dated amenities that are out of fashion and out of touch; and capital assessments. However, ClubCorp said that club members today want experiences, rich programming and personal enrichment at their country clubs. Other member desires include multi-generational and family-centric membership; amenities that facilitate networking and building relationships; an emphasis on overall fitness, wellness and fun (not just golf); improved golf practice facilities and all-ages golf training; and family-friendly amenities.
"The rationale for joining has evolved," Affeldt told analysts. "I like to call our [membership] multi-generational, so we appeal to everybody from kids to grandparents. It is by design with very few exceptions."
Part of ClubCorp's ownership strategy is to remodel and/or redesign certain aspects of its clubs in a process the company refers to as "reinvention." One reinvention example is Rolling Green Country Club in suburban Chicago, where the company invested $1.5 million and held an opening celebration earlier this month. Rolling Green Country Club tripled the size of its old fitness center to 4,000 square feet and added a variety of Life Fitness equipment, rowers and weight machines, according to an Arlington Heights Daily Herald report.
ClubCorp has 18 reinventions in progress so far in 2016 and expects to invest approximately $45 million on reinventions in 2016. Reinventions typically take nine months to one year to complete, Affeldt said on the call.
ClubCorp uses acquisitions to consolidate what it considers a fragmented industry, according to the company. ClubCorp's acquired Marsh Creek Country Club in Florida and Santa Rosa Golf & Country Club in California in 2016. ClubCorp would like to add more clubs in its existing markets to add reciprocity value for members, but the company is not currently targeting specific states or cities for club acquisition, Affeldt told analysts.
ClubCorp acquired nine clubs in 2015: Ravinia Green Country Club and Rolling Green Country Club near Chicago, Bermuda Run Country Club in North Carolina, Brookfield Country Club in Georgia, Firethorne Country Club in North Carolina,; Ford's Colony Country Club in Virginia, Temple Hills Country Club in Tennessee, The Legacy Golf Club in Florida (later sold) and Bernardo Heights Country Club in California.
ClubCorp ranked No. 5 on Club Industry's Top 100 Health Clubs of 2015 with 2014 revenue of $844.16 million.
ClubCorp stock (NYSE:MYCC) was up over 2 percent to $14.29 per share at midday trading on Wednesday.