Bowlero Corp (BOWL) Q3 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...

GuruFocus Research
4 min read

In This Article:

  • Total Revenue Growth: 8.8% increase

  • Same-Store Sales Growth: Negative 2.1% for the quarter

  • Adjusted EBITDA: $122.8 million, down from $127.6 million year-over-year

  • Event Revenue: Increased 27% year-over-year

  • League Revenue: Up 9% year-over-year

  • New Locations: Opened Lucky Strike Miami; planning four new builds in the next nine months

  • Acquisitions: Acquired Raging Waves water park with 53.5 acres of land

  • Capital Expenditure: $13 million on growth, $9 million on new builds, $7 million on maintenance

  • Acquisition Spend: $12 million

  • Net Debt: $943 million

  • Liquidity: $437 million available

  • Net Leverage Ratio: 2.4 times

  • Store Count: Closed one center, ending with 352 centers

Release Date: May 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Bowlero Corp reported a solid revenue growth of 8.8% in the third quarter, indicating strong business performance despite initial setbacks.

  • The company successfully launched new premium menus in recently opened locations, enhancing food and beverage offerings which are expected to drive higher customer spend.

  • Event revenue increased by 27% year-over-year, and league revenue was up by 9%, showing robust growth in these segments.

  • Bowlero Corp made significant investments in traffic-driving initiatives which have started to show positive results, as evidenced by industry-leading same-store comp growth.

  • The acquisition of Raging Waves, the largest water park in Illinois, presents new business opportunities and diversification into the location-based entertainment space.

Negative Points

  • Same-store comp growth was negative at -2.1% for the quarter, primarily due to severe weather impacts in January.

  • Adjusted EBITDA decreased to $122.8 million from $127.6 million in the previous year, reflecting higher operational costs and investments.

  • The company faced underperformance relative to the third quarter guidance, mainly due to unexpected costs from investments aimed at driving foot traffic.

  • Significant investments in the PBA and amusements resulted in a $2 million loss for the quarter, indicating challenges in achieving immediate profitability from these initiatives.

  • Bowlero Corp adjusted its full-year guidance to the lower end of the previously disclosed range, suggesting some uncertainty in achieving initial financial targets.

Q & A Highlights

Q: Can you elaborate on trends you've seen with walk-in retail traffic as the third quarter progressed? A: (Thomas Shannon - CEO) Positive trends were observed in walk-in retail traffic, with a positive comp in February and March. April showed a same-store basis increase of over 6%, and total company revenue was up 20%. The company is optimistic about maintaining low- to mid-single digit same-store sales comps through the rest of the year.

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