ClubCorp Holdings Inc (NYSE:MYCC) Fails Street Expectations


Shares in ClubCorp Holdings Inc (NYSE:MYCC) slumped 12.19% to close Thursday at $12.32 following the company’s earnings miss.

A total of 2.37 million shares changed hands on the day.

For its third quarter 2016, ClubCorp reported EPS of $0.02 which missed by $-0.06 and revenue of $259.3 million which missed by $-5.16 million and was down 1.5% year-on-year.

ClubCorp Holdings Inc (NYSE:MYCC) Q3 earnings miss

Mark Burnett , COO, clarified that same-store revenues were soft during the third quarter primarily due to a decline in golf ops revenue and smaller than anticipated growth in food and beverage revenue. Golf ops revenue suffered from adverse weather, Q2 flooding in Houston, and increased rainfall over prior year continuing to impact playable days.

Eric Affeldt, CEO, said the company had completed reinventing the clubs it acquired in 2014 and 15 and therefore anticipated a reduction in capital expenditure in 2017.

“The company’s current leverage ratio stands at 4.4 times and we are now reducing the company’s target leverage ratio to below four times and expect to achieve this lower leverage ratio over the next 12 to18 months,” Affeldt said, adding that the company will evaluate the potential disposition of non-core clubs.

ClubCorp Holdings Inc (NYSE:MYCC) guidance for 2016

The Company reduced its anticipated revenue for fiscal 2016 to a range of $1,080 million to $1,090 million and narrowed its anticipated adjusted EBITDA to a range of $245 million to $249 million, while maintaining the midpoint at $247 million.

ClubCorp Holdings Inc (NYSE:MYCC) getting flak from activist investor

In September, FrontFour Capital Group, an activist investor, wrote to the company’s board suggesting that it took for strategic alternatives, including a potential sale.

FrontFour holds 3.4% of ClubCorp. It pointed out that the company’s shares are trading at the lowest sustained valuation multiple since the September 2013 IPO and marginally above the company’s $14 per share IPO price.

FrontFour also suggested the conversion of the company into a REIT.


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