Membership Collective Group Inc. (NYSE:MCG) Q3 2022 Earnings Call Transcript

Thomas Allen: Yeah. Shaun. So our actions are definitely being put in place to streamline SG&A or G&A. The problem that you have from looking at it on a consolidated basis is, the support offices broadly that are included in our consolidated numbers. So if you think about next year, we’re expanding in Latin America, so that’s going to be included in G&A. But we are seeing meaningful savings there and expect good number of savings in G&A.

Shaun Kelley: Thank you very much.

Operator: The next question is from Sharon Zackfia with William Blair. Your line is open.

Sharon Zackfia: Hi. Thank you.

Thomas Allen: Hi.

Sharon Zackfia: I guess, I’m curious, given the state of the U.K. economy, if you could kind of touch on trends in the U.K. specifically, how the wait list looks there, if you’re seeing any change in kind of in-house behavioral patterns in the U.K. And then, a secondary question. I was a bit surprised that revenue guidance wasn’t narrowed for the full year, given we have just 1 quarter left. Can you kind of give us your thoughts on that reiteration of what kind of implies a really broad range for the fourth quarter?

Thomas Allen: Yes. Well, I’ll take the first part of your question, Sharon. So regarding the UK, so — we — in Q3, we — our members in our houses are higher than they were in 2019. We have not seen any change in our member behavior. So, we’re not seeing any recessionary behavior as it stands in our membership in the UK. In fact, we actually grew quarter-on-quarter on our revenues and our spend. What we focus a lot on that we can control, which is making sure we have the best service in our houses that we have value options for our members if they want them. So, regarding our waitlist — UK waitlist is actually one of our strongest waitlist. We’ve got super great waitlist on every single house across the UK. Our applications in Q3 are at record levels, pretty much in all our regions, but in particular, the UK.

So, as we stand, where we feel cautiously optimistic about our UK and our members. But as always, we want to make sure that we’re delivering the best value, the best service, and the best experience for our members when they do come into the houses. Thomas, do you want to answer the second part?

Thomas Allen: Yes. So, Sharon, our key messages from the quarter is that membership and revenue continued to have really strong momentum and we continue to be on track to our full year guidance. I mean I think on the revenue side, remember, we guide to two things, we guided total revenue and membership revenue. Both of them are feeling FX impacts. But as you can imagine, we feel good that we’re performing well there. And I would say that we are going to be well above the bottom of the ranges.

Sharon Zackfia: Thank you.

Operator: The next question is from Steven Zaccone with Citi. Your line is open.

Steven Zaccone: Great. Morning. Nick, best wishes in the new role, and congrats to you, Andrew. I had a question on the change in strategy of the unit growth going back to five to seven per year. How do you think about that in terms of differences by region? And then also in terms of smaller houses versus the bigger properties that you — like a farmhouse for example, how do you think about that in terms of the differences?