Into 2H23, Baumgartner remains bullish on the multi-year risk/reward for LTH shares. 

In addition, LTH is benefitting from overhead cost reductions (corporate expense -$40 million vs. FY19) associated with eliminating managerial layers, the analyst notes. 

Baumgartner adds that implementing dashboards and adopting a pseudo-franchise model, where club-level managers have greater operating discretion, have also enhanced LTH's responsiveness and cost controls.

The analyst remains particularly confident in LTH's same-store sales, which are expected to grow 4%+ in the out years.

Regarding reported net pricing realization, LTH is also benefiting from mix accretion, the analyst adds. 

The contribution of new clubs in more affluent locations is pushing new membership prices to $210/month in some cases (vs. 1Q23's average membership of $165). 

These apart, the analyst thinks that Sale-Leaseback should remain a component of future cash flow and maintain post-2023 gross proceeds of at least ~$325 million that may be liquidated from current properties without incurring significant tax leakage or other restrictions.

Price Action: LTH shares are trading higher by 1.55% to $21.59 on the last check Monday.