Bowlero Q4 Earnings Call Highlights

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Fiscal 2026 performance improved: Revenue rose 4% to $1.245 billion and adjusted EBITDA reached $333 million, while same-store sales declined just 0.2%, helped by stronger bowling, league, food and event trends.

Temporary headwinds affected results: June comparable sales fell 7% as major sports events drew customers away, while weather pressured water-park attendance; California remained the weakest market, with sales down 4%.

Fiscal 2027 outlook emphasizes events and deleveraging: Lucky Strike expects adjusted EBITDA of $340 million to $360 million and same-store sales growth of 1% to 3%, while targeting about $50 million in free cash flow, lower capital spending and debt reduction.

Bowlero (NYSE:BOWL), operating as Lucky Strike Entertainment, said fiscal 2026 revenue rose 4% to $1.245 billion while adjusted EBITDA reached $333 million, as improved bowling, food, league and event trends were partly offset by a late-year disruption from major televised sports and weather pressure at its water parks.

For the fiscal year ended June 29, 2026, same-store sales declined 0.2%, an improvement of 3.5 percentage points from the prior year and the company's strongest comparable-sales result since fiscal 2023, according to Founder and Chief Executive Thomas Shannon. Excluding California, same-store sales increased 0.9%.

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Shannon said retail bowling and shoe revenue increased 2.9% on a comparable basis, league revenue rose 3.6%, and food sales increased 8%. Events, which management has identified as a key growth opportunity after a multiyear decline, turned positive in May and June and remained positive in July and August.

Management said fourth-quarter trends began positively, with April roughly flat and May up 2%, before major sports programming affected customer traffic. Shannon attributed a 7% comparable-sales decline in June to record viewership for the World Cup and the New York Knicks' NBA championship run.

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"For five straight weeks, millions of consumers who would ordinarily be bowling on a Friday or Saturday night were watching sports from home," Shannon said. He described the impact as a one-time programming event rather than evidence of a weakening consumer, adding that trends improved after the World Cup final and August results were rebounding.

President and Chief Financial Officer Bobby Lavan estimated that the World Cup affected June revenue by at least $7 million, potentially as much as $10 million to $12 million. He also cited approximately $10 million of weather-related revenue pressure from two snowstorms during the March quarter.

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California remained the company's weakest market, with comparable sales down 4% during fiscal 2026, compared with a 1% increase for the rest of the company. Lavan said California accounts for about 20% of the business. The company has replaced leadership in the state and is overhauling its corporate sales organization there, though management is not including a California turnaround in its fiscal 2027 forecast.

Lucky Strike expanded its directly managed water-park portfolio to five locations during the summer, including Raging Waters Los Angeles, acquired in January for $45 million. The company said water parks generated $56 million in trailing 12-month revenue through July and $22 million in EBITDA, compared with $23 million in revenue and $11 million in EBITDA in fiscal 2025.

Per-capita spending across the water-park portfolio increased by double digits, while payroll declined by the mid-single digits as staffing was aligned with demand. However, attendance was affected by weather, including cool and wet conditions near Chicago at Raging Waves and lower-than-ideal temperatures in Los Angeles.

Shannon said the company plans to sell season passes earlier for the next season, viewing passes as a way to reduce weather-related revenue volatility. Management also expects to better balance season-pass volume and pricing after placing more emphasis on premium pricing this year.

Its Boomers family entertainment centers generated $11 million in EBITDA during the year, nearly double the prior-year result, according to Shannon. The company said the businesses are counter-seasonal to bowling operations and were EBITDA-positive in every period.

Lucky Strike forecast fiscal 2027 adjusted EBITDA of $340 million to $360 million and expects same-store sales growth of 1% to 3% through the year. Management characterized its EBITDA outlook as conservative, reflecting uncertainty around consumer conditions and weather rather than a change in its operating plan.

Lavan said the December quarter will be a critical test for the restructured events business. Event bookings entering the end of September were tracking 10% higher than the prior year, compared with a 30% decline in the prior-year period. Events accounted for about 40% of revenue in December, he said.

The company has reorganized its events sales operation into a hybrid structure that separates larger corporate accounts from localized business and uses a call center for smaller parties. Management said it sees an opportunity to recover roughly $40 million in event revenue lost over the past three years.

Lucky Strike also plans to launch a new customer relationship management system in October. Lavan called it the company's largest IT initiative to date, with related spending weighing on selling, general and administrative expenses in the June and September quarters.

Fiscal 2027 capital expenditures are budgeted at $90 million, down from $114 million in fiscal 2026 and $194 million two years earlier.

Management expects long-term annual capital expenditures to move toward $70 million to $80 million after its rebranding cycle is completed.

The company expects to finish consolidating its branding around Lucky Strike and AMF by the end of fiscal 2027.

Lucky Strike expects water parks to contribute $28 million to $33 million of EBITDA in fiscal 2027 and Boomers to contribute roughly $10 million to $15 million.

Shannon said the company remains open to acquisitions but is pursuing them only opportunistically while it focuses on improving the current portfolio, growing organic EBITDA and reducing leverage. He said Lucky Strike may shed approximately 10 properties during fiscal 2027, primarily peripheral locations acquired during a prior period of active dealmaking.

The company has only two or three EBITDA-negative centers, according to Shannon. Lavan said potential asset sales could be used to reduce leverage where sales values are attractive relative to the cost of supporting fringe locations.

In response to an analyst's free-cash-flow estimate, Lavan said approximately $50 million for fiscal 2027 was a fair assumption, excluding any asset sales. He said the company's goal is to pay down its revolving credit facility by June.

Bowlero Corporation operates one of the largest bowling center networks in North America, offering an array of bowling and entertainment experiences under its Bowlero, Bowlmor Lanes and AMF Bowling brands. The company's venues combine traditional ten-pin bowling with modern amenities such as full-service bars, food and beverage offerings, premium bowling lanes, and private event spaces. Bowlero also enhances guest experiences through live entertainment, arcade games, billiards tables and league-play programs tailored for casual bowlers and competitive enthusiasts alike.

Since its origins in the mid-20th century as AMF Bowling, the business underwent a series of strategic transformations, including a merger with boutique operator Bowlmor Lanes and a subsequent rebranding initiative that introduced the Bowlero concept in the late 2010s.

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