Lucky Strike Entertainment Corporation (LUCK) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects a positive sentiment with strong financial performance, optimistic guidance, and strategic investments. The company's confidence in achieving EBITDA guidance, despite challenges, and the implementation of dynamic pricing systems indicate potential growth. Marketing improvements and rebranding efforts have led to increased revenue and bookings. Although some challenges were noted, such as payroll and marketing costs, the management's focus on cost control and organic growth is reassuring. The positive outlook for the holiday season and strategic investments in water parks and Lucky Strike conversions further support a positive stock price movement.
Key Financial Performance
Same-store sales comp Positive 0.3% year-over-year. This was driven by continued strength in retail and league businesses, along with improvements in the events business.
Total revenue growth Increased by 2.3% year-over-year. The growth was attributed to strong performance in retail and league businesses, as well as progress in the events business.
Events business performance Nearly flat for the quarter, marking its best performance in years. Improvements were due to changes in the events organization, pricing, and funnel.
Investments in payroll, marketing, and activity levels Deliberate investments were made to drive traffic and same-store sales growth. While some investments delivered attractive returns, incremental labor costs weighed on profitability.
Acquisition of Raging Waters Acquired in January, expected to contribute meaningful EBITDA in the June and September quarters. This acquisition reflects portfolio diversification.
Lucky Strike Aliso Viejo opening Opened in December with encouraging early results. This is part of the strategy to simplify the portfolio to two cohesive brands, Lucky Strike and AMF.
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Operating Highlights
Lucky Strike Aliso Viejo Opening: Opened in Orange County, California in December with encouraging early results.
AMF Brand Refresh: Planned rollout of a refreshed AMF look later this year, leveraging the brand's 100-year history.
Acquisition of Raging Waters: Acquired the largest water park in California, expected to contribute meaningful EBITDA in the June and September quarters.
Expansion with Family Entertainment Centers: Acquired three new family entertainment centers, contributing to seasonal earnings growth.
Same-Store Sales Growth: Achieved positive same-store sales growth of 0.3% and total revenue growth of 2.3%.
Events Business Turnaround: Improved performance in the events business, with strong double-digit results in January.
Balanced Investment Approach: Shifted focus to balance same-store sales growth and EBITDA expansion, with more targeted and measured investments.
Portfolio Simplification: Simplifying portfolio to two brands, Lucky Strike and AMF, to drive marketing efficiencies and profitability.
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Risk or Challenges
Incremental labor costs: Investments in payroll did not generate the expected return on investment, weighing on profitability.
Event business performance: While there has been progress in turning around the events business, it has been a primary drag on same-store sales over the past several quarters.
Weather disruptions: A significant snowstorm caused a week of headwinds, impacting business momentum.
Investment strategy: Not all spending delivered attractive returns, leading to a shift toward a more balanced approach with higher return thresholds for future investments.
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Guidance & Outlook
Future Investments: The company plans to shift towards a more balanced approach, emphasizing both same-store sales growth and EBITDA expansion. Future investments will be more targeted, measured, and held to a higher return threshold.
Acquisition Impact: The acquisition of Raging Waters, the largest water park in California, is expected to contribute meaningful EBITDA in the June and September quarters. This, along with other acquisitions, is anticipated to provide a significant seasonal lift to earnings during the summer months.
Brand Strategy: The company plans to sunset the Bowlero brand by the end of the calendar year, consolidating its portfolio into two brands: Lucky Strike and AMF. A refreshed AMF look will be rolled out later this year, aiming to strengthen its value-oriented offering and differentiate it from Lucky Strike.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Why didn't the company lower the EBITDA guidance for the full year despite needing a significant uptick in the second half?
A:The CFO explained that the company remains confident in achieving the guidance range due to strong performance in January and February, mid-single-digit growth in retail and league, and improvements in the corporate events business. They also highlighted that the December quarter was front-end loaded, and January results showed double-digit growth.
Q:How much of a drag was the corporate events business on margins in the second quarter?
A:The CFO identified three direct drags: center payroll increased by $6 million year-over-year, marketing investment increased by $4 million, and marketing team investment increased by $1 million. They expect margin growth in the fourth quarter as water parks and Boomers transition from being a drag to significant EBITDA contributors.
Q:What progress has been made in rebuilding the events business, and what are the drivers of the recent inflection?
A:The CFO stated that dynamic pricing systems were implemented in September, which helped turn around the events business from a double-digit decline to growth. The focus shifted from volume to dynamic pricing, and marketing efforts have improved consumer and kids' birthday party bookings.
Q:What investments in the second quarter translated to improved traffic or same-center comps, and how will investments be balanced in the back half of the year?
A:The President highlighted a significant increase in the marketing budget, leading to a 200% increase in media impressions, a 28% increase in online revenue, and doubled booking conversions. Rebranding efforts for Lucky Strike locations also contributed. Marketing efficiency improved with CPMs decreasing by 38%. Investments will continue to focus on brand building and scaling rebrands.
Q:How did food and beverage sales perform during the quarter, and what benefits are being seen from training and tablet implementation?
A:Retail food comps grew 10.9%, while retail alcohol comps declined 4.7%. Nonalcoholic beverage comps grew 26.2%, driven by the success of craft lemonades. Server tablets were introduced in 125 locations, increasing average check size by 7%. Hospitality training improved NPS scores to a record 78.7% in October.
Q:What unexpected challenges were faced with investments, and how are they being addressed?
A:The CFO noted challenges with center payroll, marketing, and incremental activities. They are optimizing labor costs by evaluating returns on payroll and focusing on efficient marketing. Investments in water parks and Boomers are showing returns, but incremental activities had the least returns and will be scaled back.
Q:What changes will customers notice in water parks for the upcoming season?
A:The CEO mentioned comprehensive facelifts, including repairs, painting, and upgrades to infrastructure like bridges and fences. Investments in food and beverage availability and cabanas are also being made. Raging Waters will apply for a liquor license, and expansions are planned for future seasons.
Q:What are the biggest variables affecting the guidance range for revenue and EBITDA?
A:The CFO identified water park profitability, summer season pass sales, and organic growth as key variables. They also emphasized cost control and the impact of weather on January results, which were strong despite snow-related disruptions.
Q:What is the status of Lucky Strike conversions, and how will they impact the brand?
A:The CEO stated that the next 50 conversions are similar to the first 100. Critical mass in markets will enable meaningful marketing, and the Lucky Strike brand will gain relevance and awareness. The goal is to have 200 locations by the end of 2026.
Q:What was the comp cadence by month in the second quarter, and what was the weather impact?
A:The comp cadence was approximately +1%, +1%, and -1% for October, November, and December, respectively. Snowstorms in January caused a $5 million revenue loss, and December snowstorms cost $2 million.
Q:What was the EBITDA drag from the water park business, and are there any acquisition plans for the back half of the year?
A:The CFO did not specify the exact EBITDA drag but emphasized focusing on a strong summer season for Boomers and water parks. No immediate acquisition plans were mentioned, as the focus is on organic growth.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact EBITDA drag from the water park business and did not elaborate on potential acquisitions for the back half of the year, focusing instead on organic growth and operational improvements.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Accounting Officer
CFO Treasurer
Executive President
Instructions Chief
Lucky Strike
Officer afternoon
Officer today
President risk
Principal Accounting
SEC Lucky
Strike Chief
Strike Entertainment
Strike Today
Treasurer Principal
afternoon Lucky
afternoon lady
conference Lucky
conference today
filing SEC
gentleman name
lady gentleman
name conference
obligation event
statement CFO
today Lucky
LUCK Transcript
Lucky Strike Entertainment Corporation (LUCK) Q2 2026 Earnings Call Transcript
Positive2-4
The earnings call reflects a positive sentiment with strong financial performance, optimistic guidance, and strategic investments. The company's confidence in achieving EBITDA guidance, despite challenges, and the implementation of dynamic pricing systems indicate potential growth. Marketing improvements and rebranding efforts have led to increased revenue and bookings. Although some challenges were noted, such as payroll and marketing costs, the management's focus on cost control and organic growth is reassuring. The positive outlook for the holiday season and strategic investments in water parks and Lucky Strike conversions further support a positive stock price movement.
Lucky Strike Entertainment Corporation (LUCK) Q1 2026 Earnings Call Transcript
Positive11-4
The earnings call summary and Q&A indicate strong financial metrics, with revenue and EBITDA growth, successful product innovations, and strategic acquisitions. Despite some regional challenges, the overall sentiment is positive, with optimistic guidance and effective marketing strategies. The acquisition of entertainment properties and the focus on organic growth further bolster the outlook. The absence of negative factors like guidance refusal or secondary offerings supports a positive sentiment, though not strong enough for a 'Strong positive' rating.
Lucky Strike Entertainment Corporation (LUCK) Q4 2025 Earnings Call Transcript
Positive8-28
The earnings call shows a positive sentiment due to the reinstatement of guidance, expected double-digit growth, and strategic acquisitions. Despite some weaknesses in California, the company is optimistic about future performance, particularly with water parks and FECs. Marketing investments are showing results, and the company is confident in its business trajectory. However, the lack of specific financial details in some responses and the filing of a shelf registration could be a concern. Overall, the strategic focus and positive guidance suggest a positive stock price movement.
Lucky Strike Entertainment Corporation (NYSE:LUCK) Q2 2025 Earnings Call Transcript
Unknown2-6
The earnings call highlights several negative factors: a decline in revenue and adjusted EBITDA, reduced capital expenditures, and macroeconomic uncertainties affecting consumer behavior. The Q&A reveals concerns about same-store sales and management's unclear responses on key issues. Despite a positive EPS growth, the absence of a share repurchase program and lack of strong guidance further weigh on sentiment. Overall, the cautious outlook and potential risks suggest a negative stock price reaction.
LUCK Slides
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
