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The call highlighted meaningful operational progress (notably AI-driven efficiencies, labor reductions, brand conversions, CapEx discipline and a clear free cash flow per share target) and maintained positive guidance for revenue and adjusted EBITDA. These positives are tempered by significant near-term headwinds driven by extreme weather, regional gasoline shocks and geopolitical uncertainty that depressed March results (notably in West Coast markets) and temporarily softened corporate events and waterpark early contributions. Management emphasized that many negatives are transitory and that cost actions and AI initiatives should drive durable margin and cash flow improvement.
For fiscal 2026 management updated guidance to total revenue growth of +4% to +5%, adjusted EBITDA of approximately $345–$350 million and gross capital expenditures of about $120 million (management also cited a $110–$120M range), noting CapEx is down roughly $30 million year‑over‑year and down ~20% YTD ($91M vs. $114M). They reiterated a free‑cash‑flow‑per‑share goal (trailing‑12‑month EBITDA less CapEx / shares) to reach at least $2.00 from $1.53 today (≈33% increase) over the next 12 months while keeping net debt flat and pursuing opportunistic buybacks, and expect materially better cash conversion exiting the year. Cost actions are already producing savings—more than $6M of annualized headcount reductions, ~97,000 center labor hours saved over the last 12 weeks (≈16% reduction from January peak), Orca AI delivering >$2M annualized from closeout‑time reductions and a further high‑teens to mid‑$20M annual savings opportunity from clock‑in optimization. They also noted brand conversion progress (~115 Lucky Strike conversions of a 225‑site target at ≈$150k each) and that the waterpark portfolio should contribute ≈$18M incremental EBITDA this summer (about 80% of that in the September quarter, i.e., fiscal 2027).
Second consecutive quarter of positive same-store sales comp at +0.2%, the first back-to-back positive comps since 2024; January comp was strong at +5.5% and company-wide ex-West Coast comp was +1.9% for the quarter.
Total revenue of $342.2 million versus $339.9 million prior year, an increase of approximately +0.7% year-over-year.
Saved approximately 97,000 in-center labor hours over the last 12 weeks (more than a 16% reduction from early-January peak); reduced corporate field and sales headcount producing over $6 million of annualized savings; SG&A trends show meaningful reductions quarter-to-date.
Orca aggregates ~750 million rows of operational data and is live across 360+ locations; reduced excess post-close hours from ~2,000/week to ~300/week (≈85% reduction), generating >$2 million of annualized savings from that workflow and identifying a broader opportunity in the high-teens to mid-$20 millions of annual savings from optimizing clock-in times.
Approximately 115 Lucky Strike conversions completed out of a target 225 (~51% complete); each conversion averages ~$150,000, with rebranding expected to materially reduce future capital expenditures when complete (substantially complete by next year).
Trailing-12-month free cash flow per share (EBITDA less CapEx per share) at $1.53 with a target of at least $2.00 per share in the next 12 months (target = +33%); capital expenditures year-to-date down 20% YoY ($91M vs $114M).
Waterpark portfolio expected to add approximately $18 million incremental EBITDA this summer (majority in the September quarter / fiscal 2027); several parks received upgrades and operational improvements that should drive incremental EBITDA and capacity upside.
Company updated FY26 outlook to total revenue growth of +4% to +5%, adjusted EBITDA of ~$345M to $350M, and capital expenditures of approximately $120M (gross CapEx down ~ $30M YoY), reflecting confidence in cost actions and cash generation despite near-term macro softness.
Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lucky Strike Entertainment Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Bobby Lavan, Chief Financial Officer.
Good morning to everyone on the call. This is Bobby Lavan, Lucky Strike's Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's Third Quarter 2026 earnings. Joining me on the call today is Thomas Shannon, our Founder, Chief Executive Officer and President. I would like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the SEC.
Lucky Strike Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GA...