Life Time stock drops due to increased spending on luxury fitness experience.

• The stock price of Life Time Group dropped by 15% following the release of the company's third-quarter financial report, which showed an increase in spending aimed at enhancing the premium member experience.
• During the quarter, the company's fitness centers experienced an 8.2% increase in annual operating costs, amounting to $319.4 million, according to the company's statement.
• Bahram Akradi, CEO of Life Time, stated that the investments have boosted member engagement at their clubs.

The company's third-quarter results showed a 15% drop in shares after revealing higher spending to enhance the premium member experience.

During the quarter, the company's fitness centers, including new and expanding locations, experienced a 8.2% increase in annual costs, totaling $319.4 million, the company stated.

Bahram Akradi, CEO of Life Time, stated that the company's investments, such as new pickleball courts and personal training programs, have boosted member engagement at its clubs. As a result, average member visits have increased by 24% since 2019. Life Time operates a total of 170 centers.

Akradi stated, "Given that Lifetime receives 150 billion impressions annually, it's time for us to broaden our offerings." He inquired, "What additional products and services can consumers purchase from us?"

To retain its affluent customer base, Life Time is implementing program changes as prices rise and consumers increasingly demand premium services.

Although pricing at Life Time varies by market, the company has recently increased prices at many of its locations. Akradi announced on Wednesday that the majority of price changes have already been made, but there is still a possibility for another 20% to 25% of the company's clubs to increase member prices over the next six to 12 months.

Akradi stated that we are not utilizing all the connections and programs we have to their full potential, which is crucial work to streamline everything. Any product we release must be of the highest quality.

Akradi stated that the new offerings are valuable long-term investments for strengthening the luxury brand, as higher member engagement leads to more return visits and increased spending throughout the relationship.

According to the company, the $50 million market opportunity in 2024 could be presented by the company's investment in an assisted stretching program called "Dynamic Stretch."

Jeff Zwiefel, the Chief Operating Officer of Life Time, revealed to CNBC that the company is considering incorporating weight loss drugs into their fitness plans in line with the latest GLP-1 trend.