Six Flags Entertainment (NYSE:FUN) Q4 2025 Earnings call February 19, 2026 08:00 AM ET Speaker6Good morning, everyone. My name is Ellie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Six Flags Entertainment Corporation 2025 fourth quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, ...

Financial Data and Key Metrics Changes - Sales decreased by 4% to $293.4 million in the third quarter, primarily due to the closure of 145 underperforming stores, partially offset by a 1.2% increase in comparable store sales from continuing locations [17][18] - Gross margin increased by 60 basis points year-over-year to 34.9%, driven by lower material costs and occupancy costs as a percentage of sales, despite higher technician labor costs due to wage inflation [18][20] - Operating income for the third quarter was $18.6 million, or 6.3% of sales, compared to $10 million, or 3.3% of sales in the prior year [19] - Net income was $11.1 million, compared to $4.6 million in the same period last year, with diluted earnings per share increasing to $0.35 from $0.15 [20][21] Business Line Data and Key Metrics Changes - The tire category saw a 5% increase, although tire units were down 1%, indicating outperformance against the industry [17] - Comparable store sales were down 2% in October, up 4% in November, and ended the quarter up 1% in December, marking the first time positive comps were delivered on a two-year stack in over two years [12][14] Market Data and Key Metrics Changes - The company experienced growth in comparable store sales in November and December, despite initial softness in consumer demand in October [12][14] - The company expects to deliver positive comparable store sales for the full fiscal year, supported by increased marketing spend and anticipated higher consumer tax refunds [15][23] Company Strategy and Development Direction - The company is focused on four key areas for performance improvement: customer acquisition, store experience, merchandising productivity, and real estate dispositions [4][16] - The closure of 145 underperforming stores is expected to generate positive cash flow and allow the company to concentrate on improving performance in continuing locations [12][16] - The company aims to optimize marketing investments and improve store performance as critical activities for the remainder of fiscal 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to capitalize on positive industry trends and the operational improvements made during fiscal 2026 [25][68] - The company anticipates that a challenging winter and higher expected tax refunds will provide a tailwind for top-line trends [15][63] - Management acknowledged the potential for operating leverage benefits as sales improve, while also noting ongoing wage pressures and the need for further investments in initiatives [61] Other Important Information - The company generated $48 million in cash from operations during the first nine months of fiscal 2026, maintaining a strong financial position [22] - The company expects to spend $25 million to $35 million on capital expenditures in fiscal 2026 [24] Q&A Session Summary Question: Impact of digital marketing on same-store sales - Management noted that increased digital marketing has led to better performance in stores receiving additional support, contributing positively to comp store sales [28] Question: Details on gross margin changes - Management explained that gross margin improved due to lower material costs and occupancy costs, offset by higher technician labor costs due to wage inflation [34][36] Question: Potential benefits from recent winter storm - Management indicated that the storm created consumer demand for vehicle safety services, expecting incremental sales as a result [38] Question: Contribution of traffic versus ticket in comp sales - Management reported mid-single digit declines in traffic, offset by mid-single digit increases in repair orders, resulting in a total comp increase of 1.2% [47] Question: Future cash contributions from remaining store sales - Management stated that remaining owned stores are valued at approximately $5 million, with expectations for similar or higher cash contributions from sales [50]