Life Time Fitness’s first-quarter EPS rose 3%, to $0.69, essentially in line with consensus of $0.68 after adjusting for a $0.01 benefit from a lower-than-expected tax rate.

New membership trends remain relatively muted, with total memberships up 0.3%, to 812,000, similar to the fourth quarter but below our projection for 1% growth. Access memberships declined 0.9%, worse than the fourth quarter’s 0.6% decline and marking the second quarter of declines, but that was more than offset by an 8.6% increase in non-access memberships, up from midsingle-digit gains the past few quarters. Despite lackluster new-member trends, quarterly attrition was stable yearover- year at 8.2% (versus our projection for 8.6%), ending two-straight years of consistent year-over-year increases in the attrition rate.

Revenues rose 7%, to $312 million, in line with our estimate and ahead of consensus of $310 million. In keeping with our expectations, revenue per access membership rose 6.2% (similar to the fourth quarter’s 6.4% gain), inclusive of a 7.7% increase in per member, in-center revenues (similar to the fourth quarter’s 7.6% gain). Still, same-center comps decelerated to 1.5% on weaker member growth, marking the slowest rate of comp gains since 2009.

EBITDA margin declined 50 basis points, to 27.6%, better than our projection for 26.5%, largely due to lower-than-modeled advertising costs and other operating expenses. With D&A up 20 basis points, to 10.3%, operating margin contracted 70 basis points, to 17.3%.

Management reiterated 2014 guidance for revenue growth of 7.8% to 9.5%, to $1.300 billion to $1.320 billion, encompassing consensus of $1.306 million and our estimate of $1.302 million. The guidance would mark an acceleration from 7% revenue growth in 2013. In addition, 2014 EPS guidance was maintained at $3.05 to $3.15 (versus consensus of $3.09 and our estimate of $3.08), representing net income growth of 3% to 7% and inclusive of stronger growth in the second half of the year as margin pressure from incremental preopening expenses in the first half of the year begins to ease.

Life Time opened one new club in the first quarter, in Westchester, New York, and so far in the second quarter, the company has opened a club in Tampa, Florida, bringing the club count to 110. Plans remain on track for six total club openings in 2014 and one club every other month beyond 2014, given a robust real estate pipeline through at least 2015.

We are tweaking our 2014 EPS estimate $0.01 lower, to $3.07, up 5% and predicated on 1% to 2% membership growth in the second half of the year (management did not update prior guidance for a 2% membership increase). For 2015, our estimate is $3.45 (up 12% and versus consensus of $3.48), based on a 3% to 4% increase in memberships on more immature clubs in the ramp-up phase.

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