Lucky Strike Entertainment — First Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenue increased 3.5% year-over-year to $302.6 million for the quarter ended September 27, 2026, compared to $292.3 million in 1Q26.
• Same-store revenue decreased 2.6% year-over-year, though the comp improved monthly and turned positive in September.
• Net loss widened to $25.7 million from a net loss of $13.8 million in 1Q26.
• Adjusted EBITDA was $72.1 million, down slightly from $72.7 million in 1Q26.
• Net cash provided by operating activities was $17.1 million, reversing a net cash used of $6.4 million in 1Q26.
• Capital expenditures were $21.5 million, down from $25.9 million in 1Q26.
• Net debt increased to $1.779 billion as of September 27, 2026, from $1.769 billion as of June 28, 2026.
• Cash and cash equivalents stood at $37.9 million as of September 27, 2026, compared to $39.4 million at the end of the prior quarter.
• Revolver capacity remained at $425 million, with $112 million outstanding and $27.6 million committed to letters of credit as of September 27, 2026.

Guidance and Future Outlook:

• The Company reaffirmed fiscal year 2027 guidance issued on August 27, 2026.
• Full-year 2027 total revenue is expected to grow 3% to 5%, with a range of $1.28 billion to $1.31 billion.
• Full-year 2027 Adjusted EBITDA is projected between $340 million and $360 million.
• Full-year 2027 capital expenditures are expected to be approximately $90 million.
• Management expects to direct meaningful free cash flow and proceeds from non-core asset sales toward debt reduction.
• Outlook includes continued organic revenue growth, targeted investments in marketing and technology, and incremental contributions from water parks in FY27.

Business Segments and Product Lines:

• Total locations in operation reached 366 as of November 5, 2026, including 182 Lucky Strike branded locations.
• The company unveiled a refreshed AMF brand and converted 42 additional locations to the Lucky Strike brand during the quarter.
• Revenue growth was driven by the first full summer with two new water parks.
• Events, leagues, food, and non-alcoholic beverage segments grew; events have matched or beaten prior-year performance for six consecutive months.
• Declines were observed in retail bowling, walk-in business, and alcohol sales, which are down across the restaurant industry.
• California, identified as the weakest market, narrowed the performance gap monthly and comped slightly positive in September.
• Water parks were meaningfully more profitable than the prior year.

Market and Competitive Landscape:

• The lower-end consumer remains under pressure regarding smaller, price-sensitive parties.
• Holiday booking is ahead, led by corporate events.
• Leagues grew despite starting later in the fall season.

Risks and Challenges:

• Forward-looking statements cite risks including changes in consumer preferences, competition, unfavorable publicity, and long-term non-cancellable leases.
• Risks include substantial indebtedness, limitations on liquidity, and the ability to defend litigation.
• Potential risks involve cybersecurity breaches, catastrophic events, public health emergencies, and economic conditions such as inflation and recession.
• The company faces challenges in retaining key managers and qualified employees.

Management Commentary and Tone:

• CEO Thomas Shannon stated the company is in a "better place than a year ago" but emphasized that fixing the negative same-store comp is the priority.
• Management noted that capital spending in the quarter was the lowest in five years and expects the full year to be roughly half of the fiscal 2024 peak.
• The tone regarding water parks was positive regarding profitability, with a focus on selling season passes earlier next year.
• Management clarified that the dividend suspension is a capital allocation decision to prioritize debt reduction, not a change in the view of long-term earnings power.

Other Key Points:

• The Board of Directors has suspended the quarterly cash dividend on common stock to accelerate the deleveraging plan.
• The company plans to utilize proceeds from a few non-core asset sales to aid debt reduction.
• The Professional Bowlers Association is noted as a growing media property with millions of fans.
• System modernization costs related to the CRM platform are expected to be completed in the fourth quarter of fiscal 2027.