YogaWorks (YOGA) is one of the largest and fastest growing providers of yoga instruction in the US, with almost 3 mln student visits in 2016 and 50 company-owned studios as well as its Internet-based digital media service, MyYogaWorks.com.
YogaWorks is the only national, multi-discipline yoga instruction company, and its highly recognizable brand is present in six US markets: Los Angeles, Orange County (California), New York City, Northern California, Boston and Baltimore/Washington D.C. Its teachers taught more than 180,000 classes in its studios and attracted more than 225,000 students in 2016.
Going back to the quarter... the company reported a loss of ($0.38), excluding items, which came in worse than market expectations. However, the company said that its results came in-line with its own expectations. On the top line, revenues fell 6.0% year/year to $12.5 million, which fell in-line with expectations.
The decrease in revenue was primarily due to a larger portion of sales being classified as deferred revenue, which will be recognized as net revenue in future periods.
The increase in deferred revenue in the second quarter as compared to the same period last year was principally the result of a sales mix shift from monthly memberships toward class packages, which were offered at all of its studios as of July 2016. The company believes that offering class packages allows it to broaden the student base over time and better serve students overall.
The company ended the quarter with 50 studios in six regional markets, with one closure and one opening since the quarter ended 2016.
However, total cost of revenue and operating expenses for the quarter increased 5.6% to $16.7 million compared to $15.8 million for the second quarter of last year. This increase was primarily due to a $0.9 million accrual for a legal settlement.
Looking ahead, the company is forecasting guidance that falls in-line with market expectations. For the third quarter, YogaWorks expects to see revenue fall in the range of $12.7-13.2 million, which falls in -line with expectations. And for the fiscal year 2017, the company expects to see revenue of $53.2-54.2 million, which also falls in-line with expectations.