Why ClubCorp Holdings, Inc. Stock Plunged Today

What happened

Shares of ClubCorp Holdings Inc.  (NYSE: MYCC  ) were down 11% as of 12:30 p.m. EDT Wednesday after the private golf and country club specialist announced weaker-than-expected first-quarter results and opted not to continue pursuing its previously announced review of strategic alternatives.

So what

Regarding the former, quarterly revenue climbed 3% year over year, to $221.3 million, including a 2.6% increase in same-store combined clubs revenue. That translated to a net loss of $7.5 million, or $0.12 per share, narrowed from a net loss of $8.3 million, or $0.13 per share in the same year-ago period. But analysts were anticipating a narrower net loss of $0.07 per share on slightly higher revenue of $221.8 million.

One of ClubCorp's private golf courses.

Image source: ClubcCorp Holdings Inc.

In addition, ClubCorp stated its board of directors has unanimously decided "not to pursue a strategic transaction at this time." The board's strategic review committee will remain in place, however, and ClubCorp plans to continue executing its previous strategy "focused on organic growth, reinvention and acquisitions."

To that end, ClubCorp also acquired the Oakhurst Golf and Country Club in Clarkston, Michigan today. And the company recently completed a lease agreement to build a new concept business called "The Collective," set to open next year in Seattle.

Now what

In the meantime, ClubCorp reiterated its guidance for fiscal year 2017 revenue of $1.095 billion to $1.135 billion, as well as for adjusted earnings before interest, taxes, depreciation and amortization of $255 million to $265 million.

But Wednesday's report was undeniably disappointing for investors who were hoping for a juicy acquisition premium to bolster their returns. To be fair, though, I cautioned at the time of the original announcement in January that ClubCorp's review wouldn't guarantee a sale, noting "anything short of a sale will likely send shares right back down to where they were before the news broke."

With shares now down around 4% so far in 2017, and unless ClubCorp's board opts to renew their search for a suitable buyer, investors would do well to continue focusing on the company's efforts to create shareholder value by accelerating growth and continuing to improve the profitability of its underlying business.

10 stocks we like better than ClubCorp Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and ClubCorp Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4013875, ~/Articles/ArticleHandler.aspx, 4/29/2017 1:29:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
Change down DOW 20940.5 -40.8 -0.2%
Change down S&P 500 2384.2 -4.6 -0.2%
Change down NASD 6047.6 -1.3 0.0%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/28/2017 4:02 PM
MYCC $13.45 Down -0.10 -0.74%
ClubCorp Holdings CAPS Rating: No stars

Article registration testing

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 56588442087086775346585752996317