Pinstripes Holdings(US:PNST)2024-09-05 05:14Financial Data and Key Metrics Changes - Total revenue increased by 19% to $30.6 million compared to $25.7 million in the same quarter last year, driven by a 16% increase in food and beverage revenues and a 30% increase in recreation revenues [14] - Same store sales decreased by 2.4%, with no price increases taken during the quarter [14] - Venue level EBITDA as a percentage of total revenue decreased to 7.2%, primarily due to negative contributions from new locations [16] Business Line Data and Key Metrics Changes - Food and beverage revenues accounted for approximately 75% of total revenue, while bowling and bocce made up the remaining balance [5] - Venue level EBITDA improved by nearly $2 million across new venues compared to the previous quarter, with all new venues showing sequential improvements [11] Market Data and Key Metrics Changes - Mature stores, those open for more than 24 months, generated average contribution margins of 12.6%, representing a 240 basis point decline year over year due to sales deleverage [17] - The company anticipates same store sales growth to range from negative low single digits to positive low single digits for the fiscal year [18] Company Strategy and Development Direction - The company is focused on improving its venue level cost structure, identifying $10 million in annualized savings across its system [4] - New unit development strategy includes both established real estate developments and new developments, with plans to open two new venues in Walnut Creek, California, and Coral Gables, Florida [12][13] - The company aims to achieve adjusted EBITDA profitability in the third quarter on a sustainable basis going forward [9] Management Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment and softer consumer demand, but expressed confidence in the brand's positioning for improved profitability as conditions improve [4] - Preliminary results for the second quarter indicate expanded margins despite softer open play sales [19] Other Important Information - The company has secured $5 million in additional financing and increased its potential future funding facility by $10 million [17] - Approximately 50% of the benefits from recent cost-cutting measures will impact fiscal 2025, with full effects expected in fiscal 2026 [18] Q&A Session Summary Question: Can you provide confidence in the updated financial guidance for fiscal '25? - Management noted that Q3 is crucial due to the mix of events and operating leverage, with preliminary results showing margin expansion despite softer sales [19] Question: Is the reduction in unit openings a signal of a change in growth outlook? - Management confirmed that the two units planned for this year are on track, with long-term growth expectations remaining stable [21] Question: What caused the decline in same store sales? - Management explained that May was down 1%, June saw a significant drop of nearly 6%, and July flattened out, attributing the decline to various factors including weather and event shifts [23] Question: Was June an outlier in terms of performance? - Management acknowledged that June was affected by weather dynamics and event shifts, but overall event bookings are up year-over-year [26] Question: How do you view the competitive landscape in the experiential dining category? - Management believes the performance issues are not due to competition or a waning category, but rather due to comparisons against strong prior year performance [30]