What Bowlero (BOWL) Said on Its Q1 Earnings Call

Key Points

• Revenue increased 3.5% to $302.6 million, while adjusted EBITDA was essentially flat at $72.1 million. Same-store revenue declined 2.6%, but monthly results improved through September; the company reaffirmed fiscal 2027 adjusted EBITDA guidance of $340 million to $360 million.
• Bowlero suspended its quarterly dividend to free up about $35 million annually for debt reduction. It plans to reduce debt by roughly $100 million over the next year through lower spending, asset sales and cash flow, aiming to bring leverage from 5.5 times to about five times.
• Events and water parks showed strength: event sales grew 3%, and water parks generated $25 million in EBITDA, up $9 million year over year. The company also lowered quarterly capital spending 17% and reported reduced labor and operating costs.

Bowlero NYSE: BOWL, which held its earnings call under the name Lucky Strike Entertainment, reported fiscal first-quarter revenue growth of 3.5% and said it would suspend its quarterly dividend as it seeks to reduce debt.

Revenue for the quarter ended Sept. 27 rose to $302.6 million, while adjusted EBITDA was $72.1 million, essentially flat with the prior year, Founder and CEO Tom Shannon said. The company reaffirmed its fiscal 2027 adjusted EBITDA guidance of $340 million to $360 million.

Same-store revenue fell 2.6% for the quarter, although monthly results improved. Comparable sales declined 4% in July and 3% in August before rising 2% in September. Shannon said July was meaningfully affected by the World Cup, while President and CFO Bobby Lavan attributed part of August’s weakness to the company selling fewer summer passes.

October results remained preliminary, but Shannon said same-store sales were tracking positive until the final weekend, when Halloween fell on a Saturday rather than a Friday as it did a year earlier. The lost Saturday business pushed the month slightly negative, he said.

Dividend Suspended as Company Targets Debt

Shannon said the board decided to suspend the quarterly dividend, freeing up about $35 million in annual cash. The company plans to revisit the dividend as leverage declines.

Lucky Strike ended the quarter with $1.817 billion in debt and $38 million in cash, essentially unchanged from June. Leverage stood at 5.5 times the prior year’s adjusted EBITDA, Shannon said.

The company aims to put roughly $100 million toward debt reduction over the next year through lower capital and litigation spending, sales of a small number of non-core assets and free cash flow. At the midpoint of its adjusted EBITDA guidance, that would bring leverage to about five times, Shannon said.

Lavan said the company is marketing a handful of non-core assets, including extra land and investments held on its balance sheet. He said the broader goal is to pay down “a few hundred million” in debt.

Quarterly capital spending fell 17% to $21.5 million, the lowest quarterly amount in five years, according to Shannon. The company expects approximately $90 million in capital spending for fiscal 2027, compared with $114 million last year and $194 million at its peak.

Events Improve as Water Parks Contribute

First-quarter event sales grew 3%, and event revenue was at or above the prior year for six consecutive months through October, Shannon said. Bookings for October through December were tracking higher on a comparable basis, led by corporate events.

Lavan said corporate events, which make up approximately two-thirds of the events business, were up double digits in bookings, while adult and children’s parties faced pressure. A previously cited roughly 10% increase in the December backlog had moderated but remained positive heading into the holidays, he said. For the first quarter, corporate event sales were up and consumer events were flat.

League revenue also grew during the quarter, despite a September decline caused by a later Labor Day that delayed the start of fall leagues by a week. Shannon said recurring fall league revenue appeared on track to rise 3% to 4%.

Water parks generated $25 million in EBITDA, up $9 million from a year earlier. Shannon said the quarter included the first full summer under the company’s ownership of its two largest parks, Raging Waters in California and Emerald Pointe in North Carolina.

Costs and Menu Changes in Focus

Shannon said comparable-center payroll hours fell 5%, total labor costs decreased by $1 million despite a $1.2 million increase in health care costs, and operating expenses declined $3 million. Those savings helped the company grow same-store EBITDA despite slightly lower revenue, he said.

Food and nonalcoholic beverage sales grew, while alcohol sales declined. Shannon said the company plans to test alcohol pricing and adjust menus to reflect changing consumer habits. Lavan said a new menu would lean further into zero-proof drinks.

Nonalcoholic beverage sales were up double digits, food sales were up by a single- to double-digit percentage and alcohol sales were down by a low- to mid-single-digit percentage, Lavan said.

About Bowlero (NYSE:BOWL)

Bowlero Corp. is a provider of bowling and location-based entertainment in North America. The company operates bowling centers under brands including Bowlero, Bowlmor Lanes and AMF, offering traditional and modern bowling experiences for recreational customers, leagues, parties and corporate events.

Its venues typically combine bowling with arcade games, billiards, food and beverage service, and other entertainment attractions. Bowlero also provides event and party packages for birthdays, group gatherings and corporate functions, with offerings designed for both casual visitors and organized bowling leagues.

The company has expanded through acquisitions and rebranding, including its acquisition of Lucky Strike Entertainment, and traces its business to the broader network of bowling centers formerly associated with Bowlmor AMF.

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