管理層發言
Good morning, and welcome to Lucky Strike Entertainment's Fourth Quarter 2025 Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the call over to Robert Lavan, Chief Financial Officer. Thank you. Please go ahead.
Good morning to everyone on the call. This is Bobby Lavan, Lucky Strike's Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's Fourth quarter 2025 earnings. Today, we issued a press release announcing our financial results for the period ended June 29, 2025. A copy of the press release is available in the Investor Relations section of our website. Joining me on the call today are Thomas Shannon, our Founder and Chief Executive; and Lev Ekster, our President. I'd like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the SEC. Lucky Strike Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website. I'll now turn the call over to Tom.
Good morning. I am Thomas Shannon, Founder and CEO of Lucky Strike Entertainment. We closed fiscal 2025 on a high note, navigating a turbulent year with resilience and delivering 4% revenue growth despite headwinds in our offline corporate events business. This summer, we sold more than 260,000 summer season passes and generated more than $13.4 million in pass revenue. Our record-setting season pass program boosted guest visits and also drove meaningful retail spend through targeted value-oriented specials. Pairing high-quality experiences with compelling value is working. Same-store sales strengthened sequentially in each month in the fourth quarter and turned positive in July. Combined with the momentum from our Boomers integration and other recent acquisitions, July delivered double-digit total revenue growth year-over-year. In late July, we were excited to announce the acquisition of two iconic water parks: Raging Waters Los Angeles in San Dimas, California, which is the largest water park in California, and Wet 'n Wild Emerald Pointe in Greensboro, North Carolina. Alongside three well-known and high-performing family entertainment centers: Castle Park in Riverside, California, Boomers Avista in Vista, California, and Boomers in Palm Springs, California. Collectively, these destinations welcome more than 1.5 million annual guests and further expand Lucky Strike's leadership in our three verticals: Bowling, water parks, and high-quality family entertainment centers. This acquisition is a bold step forward in our strategy to build the premier location-based entertainment platform in North America. We are ambitiously investing in water parks, family entertainment centers, and next-generation bowling concepts. In early July, we acquired the real estate underlying 58 of our locations across the country for $306 million. By acquiring this real estate, we maximize our flexibility to optimize our capital structure and location footprint. The purchase price highlights the long-term attractiveness of the stable and growing cash flows of our individual locations and reflects the option value of owning these assets. The transaction is immediately accretive to earnings and cash flow. Simultaneously, we are strengthening our leadership team and scaling marketing investments, ensuring we capture the full potential of the markets where we operate. The path forward is clear: sustained growth, elevated guest experiences, and market leadership. We remain firmly on track to deliver another year of strong growth both organically and through acquisition. With that, I'll hand it over to Lev Ekster, our President, to share the exciting organic initiatives ahead.
Thanks, Tom, and good morning, everyone. Fiscal '25 was a transformative year for Lucky Strike Entertainment, and we're carrying that strong momentum into fiscal '26. One of the major highlights this summer was our wildly successful season pass program. Membership grew to over 260,000 members, up from 190,000 members last year. Sales exceeded $13.4 million compared to $8.5 million in the prior year. This growth was driven by an incremental marketing spend, applied dynamically each week to the best-performing channels and reinforced with employee engagement tools such as sales trackers, sales contests, and new training videos to sharpen best practices. The program has been extremely well received by our guests, and we plan to continue optimizing it moving forward. We continued to execute on our plan to grow food and beverage attachment, as we've been discussing throughout the year. Food revenue delivered positive 2.5% same-store comps. Alcohol comps were negative 2.7% and, while negative, are improving and still better than the overall comp. We saw acceleration coming from the alcohol-free category through innovative releases like our new craft lemonade, which I'll speak more to shortly. We've introduced a new stage gate process for every menu release. It includes training videos for associates, sales trackers, and full marketing support, including in-center, social, web, and increasingly through influencer campaigns. On the menu side, combos and platters continue to perform well, including pizza and pitcher combos and new platters for bigger groups, including the epic wings and fries platter and the ultimate sampler. We're expanding those offerings with new options to meet customer demand like a pizza and Margarita pitcher combo and a Taco flight and Bucket of Corona Combo. At the same time, we're launching new trend-driven menu items to stay relevant, such as the honey chicken bowl, strawberry poppy salad, chopped Chicken Caesar Wrap, and a trio of sliders with King's Hawaiian Buns. In our water parks, we're unifying concessions and rolling in signature national partners as well as leading lemonade and ice cream concepts. In our Boomers family entertainment centers, we've enhanced the food program with a streamlined higher-quality menu, new marketing graphics, and upgraded items such as burgers, wings, chicken sandwiches, improved pizza, and healthier grab-and-go options. On the beverage front, innovation has been a huge win. Our new craft lemonade, featuring three flavors, sold 135,000 units in the first two months since launch, generating nearly $800,000 in sales. We're now on pace for a $5 million annualized run rate. A seasonal fall flavor will be introduced soon. Beyond that, we launched an Energy mocktail with Red Bull. We're expanding our Zero Proof cocktail program, and we're rolling out shareable drinks in our experiential locations. Looking ahead, a major focus is strengthening our sales and hospitality culture. On sales, every new program now comes with a training video supported by sales trackers and contests. This fall, we'll roll out our new LMS platform to enhance associate training. And just last month, we launched the winner circle, an evergreen in-venue contest where entire teams are rewarded for comping up in controllable revenue categories. On the hospitality front, our Net Promoter Score is climbing, and we're leaning hard into it. We're creating a national field trading team, launching enhanced guest service training, and sending senior operators to executive education programs. We're also rolling out a quarterly team-building initiative to boost morale, camaraderie, and tenure across the organization. Finally, in marketing, we're increasing the budget to move closer to industry benchmarks. We're bolstering the team with top-tier talent, and we now see a tremendous opportunity to capture additional market share, especially as our rebrand initiative accelerates. We're already at 55 Lucky Strike locations and we expect to reach 100 locations by year-end. With that, let me hand it over to Bobby to discuss the details of our financial results.
Thank you, Lev. In the fourth quarter of 2025, we delivered total revenue of $301.2 million and adjusted EBITDA of $88.7 million. This compares to $283.9 million in revenue and $83.4 million in adjusted EBITDA in the same period last year. Total revenue grew 6.1%, while same-store sales declined by 4.1%. Same-store sales improved sequentially each month in the quarter as well as into July. Breaking down performance by segment, our retail business remains steady. Our league operations experienced low single-digit growth, and our events business faced a high single-digit decline. Adjusted EBITDA for the quarter came in at $88.7 million, with same-store sales driving an $11 million headwind to the bottom line. Offsetting that were improvements in payroll in the amount of $5 million and reductions in repair and maintenance supplies and services costs by an amount of $2 million. Boomers and our two new water parks added $7 million in EBITDA. Geographically, California, which accounts for approximately 20% of our total sales, contributed $6 million to the same-store sales decline, which we have spoken about in previous quarters. This was offset by strength in our food and beverage offerings, both outperforming the same-store comp in the quarter. During the quarter, we deployed $24 million in CapEx, down from $47 million last year as we drove procurement efficiencies and focused on high-return projects. In the quarter, we spent $13 million for growth initiatives, $1 million on new builds, and $7 million for maintenance. For this total year, CapEx was $117 million, including a $9 million land purchase, down from $195 million last year. Post the quarter close, we acquired 58 properties that we are the tenant on for $306 million. Those properties were carried on our balance sheet at year-end with $33 million of operating liabilities and $269 million of finance leases. In FY '26, you will see lower GAAP rent expense of $3 million and capitalized lease expense of $21 million from the transaction. We remain focused on delivering profitable growth by driving revenues, expanding operating cash flow, and increasing free cash flow, including free cash flow per share. For fiscal year 2026, the company is issuing the following performance guidance. This outlook reflects attractive growth supported by organic operating leverage and increased investment in high ROI revenue-generating initiatives. We expect total revenue growth of 5% to 9%, which implies $1.26 billion to $1.31 billion of revenue, which delivers $375 million to $415 million of adjusted EBITDA. Our liquidity position remained strong at $342 million with $60 million in cash. Net debt at the end of the quarter was $1.3 billion, and our bank credit facility net leverage ratio was 2.9x. We appreciate your continued support and look forward to seeing you at our new properties soon. Operator, please open the line for questions.
分析師問答
Our first question comes from Steve Wieczynski from Stifel.
Jackson Gibb on for Steven Wieczynski. So as we exit a somewhat choppy fiscal 2025, the setup for 2026 looks a lot more compelling with momentum going in the right direction and a few meaningful tailwinds in play. However, the midpoint of 2026 EBITDA guidance is the same as our suspended 2025 guidance, which strikes us as conservative. Wondering if you could maybe walk us through some of the assumptions embedded in the new targets and then maybe what drove your decision to go back to giving guidance so quickly after pulling it last quarter?
Yes. So I mean, first and foremost, July was positive from both an organic basis and double digits on a total basis. So we're confident after seeing some very choppy numbers in sort of the first half of this calendar year came back. The guidance integrates sort of two new components to our business. So one, we are investing more dollars into marketing and that will flow through. And then two, the assets that we purchased at the end of July are negative for the first three quarters of the year and then they flip positive in the June quarter and makes a bulk of its earnings in the July, August, which flows into fiscal '27.
Got it. That's helpful. Just sticking on guidance for a second. Could you help us a little with how you see the cadence playing out between the quarters as we progress through fiscal 2026? You've got the new water parks in system, which you mentioned and ramping. So there should be some changes in seasonality. Also have corporate events becoming a bigger contributor in the second and third quarters, but lack in weakness from 2025. Just trying to get a sense of the puts and takes and if there's anything we need to watch out for in terms of timing.
Yes. So we'll have good double-digit growth in the September quarter, and the fourth quarter will be $10 million to $20 million higher than the second quarter. So that should kind of get you to where the cadence is.
Our next question comes from Randy Konik from Jefferies.
Quick question. I guess, Bobby, kind of walk us through your thought process on the events side. You gave us good color on the impact of California as well. Just kind of give us that kind of playbook on where do we kind of see it over the coming quarters, the events side kind of inflecting and then just on the state of California kind of impact there and how that kind of plays out as well over the coming quarters?
Yes. From a timing perspective, the comparisons become much easier starting in September. We are seeing improvements in the business, highlighted by our best month for offline events last month. While it is still down overall, as long as we continue to monitor the two-year comparison, that segment can stabilize starting at the end of September and into October. One focus for us is that historically, we have under-invested in marketing. We are in the process of building that team and increasing our marketing budget, with part of it directed towards the offline events business. We aim to utilize our warm leads to gain market share, which is essential for achieving stability in that segment and eventually growing it.
Great. Tom, you've demonstrated a strong ability in the bowling sector to identify assets and enhance their profitability over time, achieving excellent returns. As you expand the portfolio by adding water parks and family entertainment centers, how are you approaching these businesses similarly or differently compared to the bowling business? Could you share insights on what strategies from the bowling operation you apply to the water park and family entertainment center segments, where potential synergies exist or where you can utilize the same strategies to increase profitability in these new ventures?
Well, Randy, it's largely the same approach, right? It starts with improving the asset. One reason we're purchasing these assets at times for two times forward EBITDA is that they’ve been overlooked or, in some cases, we're buying assets out of bankruptcy for no good reason. The businesses are fundamentally strong, with significant consumer demand. The replacement cost of these assets typically exceeds the purchase price. So, we begin by making the asset physically better. We clean it up, install new games, repaint, and address any deferred maintenance. Then we implement our strategy of enhancing food and beverage offerings. We emphasize package pricing since there are multiple attractions at venues like Boomers, such as Go-Karts, Mini Golf, Bumper Boats, batting cages, and possibly some rides. Setting the right price for an entire day is very much like what you'd find at an amusement park. Additionally, marketing is key. Our marketing spend had dropped to under 1% of revenue, which wasn’t sufficient. Therefore, we are investing in a high-quality marketing team that will manage our marketing budget effectively, focusing on brand building for the Lucky Strike brand, rejuvenating the AMF brand, the relatively new Boomers brand, and the individual water parks. In summary, the strategy for the water parks and family entertainment centers aligns with our established approach for bowling.
Can I ask one last follow-up? If you could look ahead 5 to 10 years into the future and consider how your portfolio will be structured, especially given that the last 5 years have focused mainly on bowling, how do you envision the distribution among bowling, water parks, and family entertainment centers in that time frame?
From a revenue perspective, I would estimate that we could have about 40% from bowling, 40% from water parks, and 20% from family entertainment centers. While I haven’t really considered this before, the water parks tend to be much larger than the other assets, which means we don’t need to secure as many deals to achieve significant revenue. For instance, we are about to finalize the acquisition of Raging Waters in San Dimas, near Los Angeles, which generated $24 million in revenue in 2024 compared to our average bowling location’s volume of around $3.4 million. That’s approximately eight times more, illustrating how we could scale that business quicker. I envision this ultimately becoming somewhat like a mini Disney. It’s interesting because I believe our business isn't given the respect it deserves. Disney is heavily investing in theme parks, including water parks, with $60 billion allocated for capital expenditures in that area, which is significantly contributing to their profitability as their traditional media business declines. Disney is focusing on the same sector that we are, which we are also investing in, and I think the market underappreciates the value of these assets. They are exceptional, irreplaceable, and we are acquiring them at a fraction of their replacement cost, or in many cases, they could never be built again.
Our next question comes from Jason Tilchen from Canaccord Genuity.
I have a follow-up question regarding the marketing investment comments. I'm curious about how much of the recent increase in comparable sales can be attributed to the early outcomes of these marketing investments and what portion of the increase is factored into the EBITDA guidance you provided today.
Jason, this is Lev. I'll give you a quick example. You saw the results of our summer season pass program. Last year, we did $8.5 million; this year, $13.4 million. That came with a $1 million incremental marketing increase. So we can see those dollars really driving results for us. And we look at holistically the entire business the same way. We've really underinvested almost to an anemic amount in awareness, marketing, and brand building, and we've really focused on performance marketing. I think the market opportunity right now really affords us an ability to gobble up a lot of market share with increased brand building and awareness marketing. So we want to get much closer to industry benchmarks. Those are 3% plus; maybe we get to like the 2.5% range, but it will be a significant increase to what we've been spending over the years.
Great. Very helpful. I have a question for Bobby. I noticed you filed a shelf registration this morning and I was wondering if you could share a bit more about the thought process behind that decision and the background related to it.
Yes. So we haven't had a shelf on file since we IPO-ed in December '21; it's purely housekeeping. It's good housekeeping to have a shelf on file. We did raise a bridge loan in July to effectuate the repurchase of 58 properties and to pay down that bridge loan, we have been looking at sort of the unsecured debt market. We had to put that shelf on file to be able to hit that market. The debt markets are on fire right now. But we're still evaluating what our opportunities are there, but there's nothing really planned other than hitting the debt markets at this point.
Our next question comes from Ian Zaffino from Oppenheimer.
Could you provide details on the progression during the quarter, specifically how much April declined and how much it improved? I want to gauge the growth throughout the quarter. Additionally, aside from California, have you noticed any other areas experiencing weakness? I’ve heard that some restaurant companies mentioned DC and New York, and I'm curious about your observations.
In April, we saw a decline of 6%, followed by a 3% drop in May, and a 1% decrease in June. However, July showed an improvement with a gain of over 1%, and August is trending similarly. Overall, these results are in line with our expectations. We are pleased with our performance, especially considering that last year’s June quarter was quite strong and August presents a tough comparison. While California remains a challenging area for us, New York is performing well. New York is significant for our company as it is our original market, and we have been increasing our marketing efforts there. I've received positive feedback from people who have seen our advertisements, indicating that our strategy is effective. Currently, New York is showing positive growth. We expect that the situation in California will improve from a comparison standpoint, and we are also concentrating on making two-year comparisons more favorable there, which we anticipate will happen in the coming months.
Okay. And then as a follow-up, I just wanted to touch on the F&B side of it. Kind of I guess, mixed signals. And maybe help us understand, is this alcohol thing a trade down to reduce the bill size? Or is it people are truly trading into nonalcoholic options and maybe that's a demographic thing? What are you actually seeing there? And any kind of thoughts?
I believe it's hard to predict how society's alcohol consumption will change. We've observed a softening trend, and instead of accepting that, we are focusing on innovation in the non-alcohol category. We introduced our first craft lemonade program, which performed exceptionally well, and we plan to continue developing that. However, we also remain committed to our alcohol program with new signature cocktails launching at the end of October. Innovation has been beneficial for us, and we've demonstrated that we offer significant dining and drinking options at our locations, which is why food and alcohol have outperformed overall comparable sales. Looking back to last Q4, our major goal was to enhance food and beverage attachment, and our recent results confirm our success in achieving this. We are leveraging marketing, improving employee training, and innovating on the food and beverage front by providing value through combos and platters, which are achieving great attachment rates. There is still considerable potential for this program, particularly as we transition more Bowlero locations into Lucky Strike, as Lucky Strike is inherently an entertainment concept where dining and drinking are more embraced than at a traditional bowling alley, and we are seeing strong performance there.
Our next question comes from Michael Kupinski from Noble Capital Markets.
Most of my questions have been answered, but I do have a couple here. In terms of location operating costs, they were a little elevated in that quarter. I know there's some seasonality there, and I know that you acquired 58 properties, and there's obviously some variances with the parks that you've acquired. I was just wondering if you could kind of give us a trajectory in terms of where you think that is because in the quarter, it was represented about 38% of total revenues. I was just wondering what you think that trajectory might be on an annualized basis?
Yes. So in the location operating cost is a $21 million noncash charge. So you have to back that out to kind of get back to sort of normal. So really, ultimately, the percentages are going to be highly seasonal, but it will run where we've been historically over the year.
Yes, once you back that out, but it's a little bit elevated, but you're saying that it would be more in the trend line of historic numbers then. Okay. And then in terms of your marketing spend, I kind of want to look back. Strangely in the last quarter, Topgolf ran a campaign that targeted bowling customers and was kind of odd that I thought, did this campaign have any effect on your customer base? And are there similarities between targeted demographics between golf and bowling, and do you believe that maybe your efforts to move towards upscale dining options or bowling centers that have had an impact on traditional customers? I was just curious.
Look, I think, first of all, very few people saw that ad. In fact, I believe after they posted it, they had to take the comments off because they were more so negative towards Topgolf than us. I think it might have backfired, and it felt a little desperate. So we don't want to really play in the dirt with them. I just think you should look at their specials and basically giving the product away at this point. It feels like a fire sale. I think the experience is probably lackluster at this point, and we're very much focused on our business and our product, which we feel was obviously superior, and I think the results show that as well.
Our next question comes from Eric Handler from ROTH Capital Partners.
Bobby, just wondering if you could sort of drill in a little bit in terms of the guidance revenue range that you have sort of what is that implying for same-store comps versus sort of your new builds and acquisitions?
Yes. I mean it implies a positive comp. There's a range between sort of 1 and 5. Right now, we're trending well on that. But ultimately, we want to get to event season before we get more excited about the organic for this year.
Got it. And regarding the Lucky Bowlero and the Lucky Strike transition, could you provide some insight into the financial benefits you're experiencing as the transition takes place?
Yes, it's still early. We currently have 55 Lucky Strikes in operation and will reach 100% by year-end, while we plan to retire the Bowlero brand by the end of the next calendar year. We have invested in marketing in New York and have also rebranded Chelsea Piers in Times Square, leading to positive performance at those centers. California is still in the process of rebranding, which is expected to boost its performance. We are seeing a lot of trial, but the real results will be evident once we move past the summer season pass and observe the organic growth, which we anticipate will positively impact the business.
Our next question comes from Jeremy Hamblin from Craig-Hallum Capital.
So I wanted to drill down a bit on cost structure and also just CapEx kind of non-acquisition CapEx expectations for FY '26. That's question #1. But 2, Bobby, there's been a pretty dynamic change in terms of how the cost structure is presenting now with a higher mix of FEC and water parks. But you've really done a great job of controlling your corporate spend, your SG&A. And so I wanted to just see if you could provide a bit more color on how we should be thinking about kind of COGS throughout FY '26? Historically, that's kind of peaked in Q3, but now with the FECs and water parks, presumably maybe Q4 might be your highest. And then just thinking about where your baseline SG&A expense run rate is at this point. I mean, Q4 was pretty low. Can you help us provide a little bit of color on that?
Yes. So on the SG&A side, where we were for the fourth quarter is what you should run through for the rest of the year or for fiscal '26. We've done a lot of cost cutting. We've done a lot of streamlining. We will be investing in marketing. Marketing flows into the location operating costs. So you'll see a $10 million to $15 million lift there. Ultimately, as we build out our hospitality culture, I think that the payroll benefit cost line will grow some. But ultimately, from an organic basis, there's going to be good incremental 50% plus on the positive comp. The drag, as I talked at the beginning of the call, is that the Boomers assets and the water parks run negative for most of the year, and then they dramatically over-earn; they get to 50%, 60% EBITDA margins in the summer. So ultimately, as you sort of model that out, you will see that on a revenue basis, the fourth quarter ends up being stronger than the second quarter, but you're still going to have a lower EBITDA relative to the second quarter because you're having those negative months in April, May; you have a big positive month in June. But I think what gets really exciting is the profitability flow-through that happens in the September quarter.
Got it. What is the total annualized cost to operate Boomers?
Boomers right now is running close to a 25% EBITDA margin. And excluding the water parks, it's about $40 million of revenue. We think we can get that up over the kind of the next 12 months. But ultimately, we've gone in, invested in processes, systems, rides, maintenance, and ultimately, the customer is responding to that.
Got it. And then kind of the non-acquisition CapEx guidance for FY '26?
Yes. So it's about $130 million. So it's going to be down from where we were this year as we continue to kind of streamline activities; we're really only focusing on high ROI initiatives. So we're going to continue driving CapEx down.
We have no further questions in queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect.