Life Time Group shares plummeted 15% Wednesday after the company’s third-quarter results revealed higher spending to boost the premium member experience.
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.”
Life Time stock plummets as company spends more on premium fitness
