Lucky Strike Entertainment Corporation (BOWL) Q4 2025 Earnings Call August 28, 2025 10:00 AM ET Company ParticipantsBobby Lavan - CFOThomas Shannon - Founder, Chairman, CEO & DirectorLev Ekster - PresidentJackson Gibb - Equity Research AssociateRandal Konik - Managing DirectorIan Zaffino - Managing DirectorMichael Kupinski - Director - Research & MD - Media And EntertainmentConference Call ParticipantsJason Tilchen - Director & Senior Equity Research AnalystEric Handler - MD & Senior Research AnalystJeremy ...

Financial Data and Key Metrics Changes - The company reported total revenue of $301.2 million for fiscal year 2025, a 6.1% increase from $283.9 million in the previous year [19] - Adjusted EBITDA for the year was $88.7 million, up from $83.4 million, reflecting a positive trend in profitability [19] - Same store sales declined by 4.1%, but showed sequential improvement each month in the fourth quarter [19] Business Line Data and Key Metrics Changes - The retail business remained steady, while league operations experienced low single-digit growth and the events business faced a high single-digit decline [19] - The acquisition of Boomers and two new water parks contributed an additional $7 million in EBITDA [19] - Food revenue showed positive same store comps of 2.5%, while alcohol comps were down 2.7% but improving [12][19] Market Data and Key Metrics Changes - California, which accounts for approximately 20% of total sales, contributed $6 million to the same store sales decline [20] - New York is performing well, with positive comps attributed to increased marketing efforts [56] Company Strategy and Development Direction - The company is focused on building a premier location-based entertainment platform in North America, with significant investments in water parks and family entertainment centers [8][10] - The strategy includes enhancing guest experiences and expanding market leadership through acquisitions and organic growth [10] - The company aims to reach 100 Lucky Strike locations by year-end, up from 55 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum heading into fiscal year 2026, driven by strong July performance and the successful season pass program [6][22] - The company anticipates total revenue growth of 5% to 9% for fiscal year 2026, translating to $1.26 billion to $1.31 billion in revenue [22] - Management highlighted the importance of marketing investments to capture additional market share and improve brand awareness [47] Other Important Information - The company acquired 58 properties for $36 million, which will lower GAAP rent expense and capitalized lease expense in fiscal year 2026 [21][22] - The liquidity position remains strong at $342 million, with $60 million in cash [23] Q&A Session Summary Question: Can you walk us through the assumptions embedded in the new targets for 2026 EBITDA guidance? - Management noted that July showed positive growth, and the guidance reflects increased marketing investments and the expected positive impact from newly acquired assets [26][27] Question: How do you see the cadence playing out between the quarters in fiscal 2026? - Management expects double-digit growth in September, with the fourth quarter projected to be $10 million to $20 million higher than the second quarter [30] Question: What is the outlook for the events side of the business? - Management indicated that the comp gets easier starting in September, and they are focusing on increasing marketing spend to capture market share [34] Question: How are you approaching the business of water parks and family entertainment centers compared to bowling? - The same playbook is applied, focusing on improving asset quality and enhancing food and beverage offerings [36] Question: What is the expected trajectory for location operating costs? - Management indicated that location operating costs are expected to return to historical trends after accounting for non-cash charges [66] Question: Can you provide insights on the impact of marketing investments on recent performance? - Management highlighted that increased marketing spend has driven significant results, particularly in the successful season pass program [46] Question: What is the expected annualized cost to operate Boomers? - Boomers is currently running close to a 25% EBITDA margin, with expectations for revenue growth in the next twelve months [84] Question: What is the non-acquisition CapEx guidance for FY 2026? - Non-acquisition CapEx is expected to be around $130 million, down from the previous year as the company focuses on high ROI initiatives [85]