Soho House (SHCO) Is Up 12.5% After Achieving First Quarterly Net Profit Since IPO

• Soho House & Co reported its second quarter and six-month 2025 financial results, recording sales of US$251.13 million and revenue of US$329.8 million for the quarter, with net income of US$24.89 million, an improvement from a net loss of US$29.9 million last year.
• This marks the company's transition from losses to profitability, highlighting operational improvements and stronger performance over the previous year's equivalent periods.
• We'll now examine how Soho House & Co's return to net profitability supports its investment narrative and future growth assumptions.

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Soho House & Co Investment Narrative Recap

To invest in Soho House & Co, you need to believe in its ability to turn strong membership and revenue growth into durable long-term profitability, despite the cyclical nature of hospitality markets. The company's return to net profitability in the latest quarter is an important validation for this thesis. While this financial improvement is a positive step, it does not by itself fully address the ongoing risks around financial controls and potential instability related to any takeover or other strategic moves.

Of the recent announcements, May's impairment and write-off charges relating to legacy UK restaurants stand out as directly linked to the company's operational revamp. This action highlights an ongoing push to improve operational efficiency and focus resources on higher-return assets, which connects back to the company’s biggest catalyst, streamlined processes and efficiency gains supporting sustainable margins. However, profit improvements may be tempered in the short term by the same restructuring measures.

By contrast, the sustainability of Soho House’s profitability faces scrutiny if concerns about financial controls and past misstatements persist, investors should keep in mind that...

Read the full narrative on Soho House & Co (it's free!)

Soho House & Co's narrative projects $1.5 billion revenue and $119.1 million earnings by 2028. This requires 6.3% yearly revenue growth and a $232 million increase in earnings from the current -$113.2 million.

Uncover how Soho House & Co's forecasts yield a $9.00 fair value, a 20% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community has a single fair value estimate for Soho House & Co at US$9.00, offering little diversity of opinion. While profitability progress is clear, risks tied to past financial misstatements may shape future sentiment so it’s worth comparing several viewpoints.

Explore another fair value estimate on Soho House & Co - why the stock might be worth as much as 20% more than the current price!

Build Your Own Soho House & Co Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Soho House & Co research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Soho House & Co research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Soho House & Co's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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