Lucky Strike's Q4 2025 Earnings Call: Contradictions in Guidance, Marketing Investments, and Economic Uncertainty Impact

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $301.2M, up 6.1% YOY

Guidance:

• FY26 revenue growth +5–9% ($1.26B–$1.31B); adjusted EBITDA $375M–$415M.
• Guidance implies positive SSS of ~1–5%; management will reassess after event season.
• Marketing spend rising by ~$10–$15M (in location operating costs); SG&A run-rate similar to Q4.
• Seasonal cadence: double-digit growth expected in September; Q4 revenue ~$10–$20M above Q2; EBITDA lower in Q4 vs Q2 due to water-park seasonality.
• FY26 impact from property deal: GAAP rent expense down ~$3M; capitalized lease expense ~$21M.
• FY26 non-acquisition CapEx ~ $130M, focused on high-ROI projects.

Business Commentary:

* Revenue Growth and Summer Season Pass Success: - Lucky Strike Entertainment achieved 4% revenue growth in fiscal 2025 despite headwinds in the offline corporate events business. - The summer season pass program contributed significantly, with over 260,000 season passes sold, generating $13,400,000 in pass revenue.

• Acquisition and Expansion Strategy:
• Lucky Strike acquired two iconic water parks and three family entertainment centers, further expanding its leadership in bowling, water parks, and family entertainment centers.

• The acquisition resulted in more than 1,500,000 annual guests, demonstrating a strategic move to build the premier location-based entertainment platform in North America.

• Food and Beverage Attachment Enhancements:

• The company reported positive 2.5% same store comps in food revenue and negative 2.7% in alcohol comps.

• The growth in food revenue is attributed to innovative menu items, enhanced platters, and targeted marketing, while the focus on alcohol-free options offsets the decline in alcohol sales.

• Financial Performance and Guidance:

• Total revenue for fiscal 2025 was $301,200,000, with adjusted EBITDA at $88,700,000.
• For fiscal 2026, the company expects total revenue growth between 5% to 9%, implying $1,260,000,000 to $1,310,000,000 in revenue, with adjusted EBITDA between $375,000,000 to $415,000,000.

Sentiment Analysis:

• Same-store sales strengthened sequentially and turned positive in July; July delivered double-digit total revenue growth YOY. FY26 outlook calls for 5–9% revenue growth and $375M–$415M of adjusted EBITDA. Season pass revenue rose to $13.4M from $8.5M with targeted marketing. Acquisitions (water parks and FECs) expand the platform, and purchasing 58 properties is 'immediately accretive' with lower GAAP rent expected next year.

Q&A:

• Question from Jackson Gibbs (Stifel): Why is FY26 EBITDA guidance midpoint similar to suspended FY25 guide, and why resume guidance now?
  Response: Guidance embeds higher marketing spend and seasonal losses from newly acquired parks (profits concentrated in summer), with July turning positive—providing confidence to reinstate guidance.

• Question from Jackson Gibbs (Stifel): How should quarterly cadence look in FY26 given new water parks and events seasonality?
  Response: Expect double-digit growth in September; Q4 revenue to be ~$10–$20M higher than Q2.

• Question from Randy Konik (Jefferies): Outlook for events business and California impact over coming quarters?
  Response: Events comps ease from September; offline events improving toward flat, aided by increased targeted marketing; California should recover as comps ease.

• Question from Randy Konik (Jefferies): How does the playbook for water parks/FECs compare to bowling?
  Response: Same playbook: upgrade assets, address deferred maintenance, enhance F&B and package pricing, and scale brand/marketing to drive profitability.

• Question from Randy Konik (Jefferies): Long-term revenue mix across bowling, water parks, and FECs?
  Response: Target mix ~40% bowling, 40% water parks, 20% FECs, with water parks scaling faster due to larger unit volumes.

• Question from Jason Tulchin (Canaccord Genuity): How much of recent comp acceleration is from marketing, and what spend is assumed in guidance?
  Response: Incremental ~$1M marketing boosted season pass sales to $13.4M (from $8.5M); spend will rise toward ~2.5–3% of revenue to capture share.

• Question from Jason Tulchin (Canaccord Genuity): Rationale for filing a shelf registration today?
  Response: Housekeeping to access debt markets; raised a bridge loan for 58-property purchase and evaluating unsecured debt to refinance.

• Question from Ian Zaffino (Oppenheimer): Magnitude of intra-quarter cadence and geographic pockets of weakness?
  Response: Comps: April -6%, May -3%, June -1%, July >+1% (August similar); weakness concentrated in California; New York comping positive with marketing tests.

• Question from Ian Zaffino (Oppenheimer): Is alcohol decline a trade-down or shift to non-alcohol, and how are you responding?
  Response: Non-alcohol innovation is offsetting alcohol softness (craft lemonades strong); new cocktails launch in October; F&B continues to outperform overall comps.

• Question from Michael Kupinski (NOBLE Capital Markets): Why were location operating costs elevated and what is the trajectory?
  Response: Includes a ~$21M noncash charge; excluding it, costs align with seasonality and should track historical levels.

• Question from Michael Kupinski (NOBLE Capital Markets): Did Topgolf’s bowling-targeted ad affect your business?
  Response: No material impact; focus remains on improving the core experience and value proposition.

• Question from Eric Handler (ROTH Capital Partners): What same-store comp does guidance imply vs contributions from new builds/acquisitions?
  Response: Guidance implies positive SSS of roughly 1–5%; management will reassess after event season.

• Question from Eric Handler (ROTH Capital Partners): Expected lift from transitioning Bolero to Lucky Strike?
  Response: 55 sites rebranded (100 by year-end; Bolero sunsets next calendar); NYC rebrands comping up; California rebrand pending; expect lift post-season-pass period.

• Question from Jeremy Hamblin (Craig Hallum): FY26 cost structure/COGS seasonality/SG&A run-rate and EBITDA cadence with parks/FECs?
  Response: SG&A run-rate similar to Q4; marketing +$10–$15M in ops; positive comp incrementals >50%; parks/FECs lose in spring but hit 50–60% EBITDA margins in summer; Q4 revenue > Q2 but EBITDA lower.

• Question from Jeremy Hamblin (Craig Hallum): What are Boomers’ current economics?
  Response: Boomers runs ~25% EBITDA margin on ~$40M revenue (ex water parks), improving as investments and processes scale.

• Question from Jeremy Hamblin (Craig Hallum): FY26 non-acquisition CapEx expectations?
  Response: Approximately $130M, focused on high-ROI initiatives with continued discipline to reduce spend.