Life Time Fitness Inc. fell the most since its market debut in 2004 after the sports-center operator forecast annual sales and profit that trailed analysts’ estimates amid expenses for opening new locations.
The shares tumbled 22 percent to $39.36 at the close in New York for the biggest one-day drop since June 2004. The stock gained 5.3 percent last year, while the Standard & Poor’s Midcap Consumer Discretionary Sector Index advanced 22 percent.
Life Time, which also reported preliminary quarterly results that included a Superstorm Sandy-related charge of 7 cents a share, plans three new centers this year, according to a statement yesterday. The company, which has 105 locations in the U.S. and Canada, also cited expenses for centers opening in early 2014 and investment in growth initiatives
“We understand LTM’s philosophy of trying to grow the business with certain ‘non-core’ growth initiatives which will drive expenses up in the near-term, but won’t necessarily have a revenue impact for some time,” Steven M. Wieczynski, a Stifel Financial Corp. analyst, wrote in an investor note. “Certain investors might not feel the same way,” said Wieczynski, who rates the shares hold.
Earnings for 2013 will be $2.85 to $2.95 a share, Chanhassen, Minnesota-based Life Time said yesterday after the New York markets closed. That trailed analysts’ average estimate of $3.17 a share, according to data compiled by Bloomberg. Revenue will be $1.2 billion to $1.22 billion, compared to estimates for $1.24 billion.
Membership last year grew “slightly” less than expected and acquisition costs were higher, the company said. Fees probably increased by 10 percent, while memberships rose 1 percent.