Q2 2024 Bowlero Corp Earnings Call
Operator: Good morning, and welcome to the Bolero second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
Good morning, and welcome to the Bolero second quarter 2024 earnings call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press Star one.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press the star one.
Operator: Thank you. Bobby Lavan, Bolero's chief financial officer. You may begin your conference. Good morning to everyone on the call and to Bobby Lavan, Bowlero's chief financial officer. Welcome to our conference call to discuss Bowlero's second quarter 2024 earnings. This morning, we issued a press release announcing our financial results for the period ended December 31st, 2023. A copy of the press release is available in the investor relations section of our website.
Bobby 11, Valero <unk> Chief Financial Officer, you May begin your conference.
Good morning to everyone on the call. This is Bobby Lavan, Polaris Chief Financial Officer.
Welcome to our conference call to discuss <unk> second quarter of 2020 for earnings.
This morning, we issued a press release announcing our financial results for the period ended December 31 2023.
A copy of the press release is available in the Investor Relations section of our website.
Robert Lavan: Joining me on the call today are Thomas Shannon, our founder and chief executive officer, and Lev Ekster. 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 statement, you should refer to cautionary statements in our press release, as well as the risk factors contained in the company's filings with the FCC. The Corporation 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-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website.
Joining me on the call today are Thomas Shannon, our founder and Chief Executive and Webex or our president.
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.
We're looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed <unk>.
For additional information concerning factors that could cause actual results to differ from those discussed in our forward looking statements you should refer to cautionary statements in our press release as well as the risk factors contained in the company's filings with the SEC.
<unk> Corporation undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur after today's call.
During today's call the company may discuss certain non-GAAP financial measures as defined by SEC regulation G. The.
The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the Companys website I will now turn the call over to Tom.
Thomas F. Shannon: I will now turn the call over to Thomas Shannon, founder and CEO of Bowlero Corporation. Bowlero had a strong second quarter with total revenue growth of 13.4 percent. We continue to invest in our centers, our people, and our goal to become the premier experiential recreation company. Our same-store sales comp turned positive as consumers picked Bowlero for celebrations during the December holiday period. Our revenues are up 65% from pre-pandemic levels as we grow market share through acquisitions and investing in our premium products. Calendar year 2023 was a transformative year. We started the year with 327 centers and ended with 350.
Good morning, and thank you for joining us today, I am Thomas Shannon founder and CEO of Valero Corporation.
<unk> had a strong second quarter with total revenue growth of 13, 4%.
We continue to invest in our centers, our people and our goal to become the Premier experiential Recreation company.
Our same store sales comp turned positive as consumers pick bolero for celebrations in the December holiday period.
Our revenues are up 65% from pre pandemic levels as we grow market share through acquisitions and investing in our premium product.
Calendar year 2023 was a transformative year.
We started the year with 327 centers and ended with 350.
Thomas F. Shannon: We accelerated growth through acquisitions, bringing in the Lucky Strike premier centers into the portfolio, and we built two new builds that are outperforming expectations and have more than a dozen in the pipeline. We put $350 million of capital to work that will generate industry-leading 25-plus percent returns on capital. The New Builds and Lucky Strike, combined, are pushing our average revenue per unit up. In second quarter 2024, our average revenue per unit was up 6% year over year combined with unit count increasing by 8%. We will continue to focus on this formula to drive double-digit revenue growth over the long, long, and long-term. Our best-in-class events platform continues to outperform, event revenue increased by 30% year-over-year. Strong corporate demand for employees to come together in a work-from-home environment combined with companies seeking premium offerings at a reasonable price during a blockbuster December.
We accelerated growth through acquisitions, bringing in the lucky strike premier centers into the portfolio.
And we built two new builds that are outperforming expectations and have more than a dozen in the pipeline.
We put $350 million of capital to work that will generate industry, leading 25 plus percent returns on capital.
The new builds and Lucky strike.
Bind is pushing our average revenue per unit revenue up.
In second quarter 2024, our average revenue per unit was up 6% year over year combined with unit count increasing by 8%. We will continue to focus on this formula to drive double digit revenue growth over the long term.
Our best in class events platform continues to outperform.
<unk> revenue increased by 30% year over year strong corporate demand for employees to come together in a work from home environment combined with companies seeking premium offerings at a reasonable price drove a blockbuster December.
Thomas F. Shannon: Leagues were up 14% year over year as we expanded social league opportunities combined with brand recognition from our PBA owners. These are offsetting slower retail business traffic as subprime customer spend slows and we lapped record-breaking prior year. Last summer, we spent considerable effort tinkering with our business model. We found good footing with a balance between promotional activity during the midweek and enhanced pricing and offerings on the full-priced weekend. Our model was fully reset in mid-October, and that allowed us to identify pricing opportunities across certain centers. In December, we took an average price increase of 2% across retail in the centers, which we applied to events in January.
Leagues was up 14% year over year, as we expand social league opportunities combined with brand recognition from our PBA ownership.
These are offsetting slower retail business traffic as subprime customer spend slows and we lapped record breaking prior year comps.
Last summer, we spent considerable effort tinkering with our business model.
On good footing with a balance between promotional activity during the midweek and enhanced pricing and offerings on the full priced weekends.
Our model was fully reset in mid October and that allowed us to identify pricing opportunities across certain centers.
In December we took an average price increase of 2% across retail and the centers, which we applied to events in January we continued to see pricing opportunities enhancements across our product line.
Thomas F. Shannon: We continue to see pricing opportunities enhancements across our product line. This year, we also invested in our ship. Last month, we announced the promotion of Lev Ekster to president.
This year, we also invested in our C suite last month, we announced the promotion of web extra to President <unk>.
Thomas F. Shannon: Lev brings 10 years of experience at Bowlero, leading the dramatic expansion of leagues in the music industry. We are investing in our people by adding to the C-suite that will complement our 12,000-plus workforce in providing premium experiences to the customer, which drives revisits and long-term growth. With that, let me hand it over to Lev for a business review. [inaudible] Thank you, Tom. I'm thrilled to be here
<unk> brings 10 plus years of experience at Valero, leading dramatic expansion of leaves in amusements we.
We are investing in our people by adding to the C suite that will complement our 12000, plus workforce and providing premium experience with the customer which drive revisit some long term growth.
With that let me hand, it over to lab for a business review.
Yes.
Thank you Tom I'm thrilled to be here today.
Lev Ekster: The white space to grow revenue will occupy more than 12 million square feet of entertainment space. It's tremendously exciting. When I joined Bowlero, our amusements business was an afterthought.
<unk> space to grow revenue of more than 12 million square feet of entertainment space is tremendously exciting when.
When I joined Bolero, our amusement business was an afterthought today it accounts for $100 million of revenue and growing.
Lev Ekster: Today, it accounts for $100 million in revenue and growing. We're able to maximize amusement revenue by optimizing our pricing, game selection, and floor plans. Opportunities to drive the customer into the arcade while they're waiting for a lane or get them to extend their visit after bowling by playing a few games are why we perform so well with amusement. We plan to implement the same successful processes to our bowling and food and beverage revenue. Selling an extra game of bowling has 100% incremental profits. Driving traffic in the slower summer months through promotion or all-you-can-bowl passes helps amusements and food and beverage businesses.
We're able to maximize amusement revenue by optimizing our pricing game selection and floor plans opportunities to drive the customer entity arcade, while they're on a wait for a lean or get them to extend their visit at the bowling by playing a few games. It's why we performed so well with amusements.
We plan to implement the same successful processes to our boldly and food and beverage revenue.
Selling extra game of bowling has 100% incremental profits to us.
Driving traffic and the slower summer months through promotion are all you can bolt passes help amusements and food and beverage attach rate.
Lev Ekster: Our database and loyalty program has millions of customers. Pushing content on the Professional Bowlers Association Telecast, with the 2024 season featuring the most broadcast hours ever in a single season on Big Fox, increases the awareness of our centers. Lucky Strike is a well-recognized iconic brand.
Our database and loyalty program has millions of customers pushing content on the professional bowlers Association telecast with the 'twenty 'twenty four season, featuring the most broadcast hours ever in a single season on big box increases the awareness of our centers.
Lucky strike is a well recognized iconic brand.
Robert Lavan: We're really leaning into the brand with the opening of Lucky Strike Moore Park in California and the upcoming opening of Lucky Strike Miami. The demand from customers for these properties, as well as the inbound interest for job opportunities, underscores the promise of the brand as an important part of the entertainment culture we are building. I look forward to meeting you in the coming months and showing you the results, and now Bobby Lavan. Thanks, Lev.
We're really leaning into the brand with the opening of Lucky strike and Moore Park in California, and the upcoming opening of Lucky strike Miami the.
The demand from customers for these properties as well as the inbound interest for job opportunities underscores the promise of the brand as an important part of the entertainment culture, We are building I.
I look forward to meeting you in the coming months and showing the results.
And now Bobby Lavan.
Thanks, a lot.
Robert Lavan: In the second quarter of 2024, we generated a total revenue x service fee of $304 million, an adjusted EBITDA of $103.1 million, compared to $268.1 million and an adjusted EBITDA of $97.0. As a reminder, service fee revenue is a pass-through, non-contributor earnings, and is being phased out. Our total growth was plus 13.4% year-over-year, and the same sort of comp was positive 0.2%. The positive 0.2% change for comp is in line with our expectations. Our communications with investors will be down the middle as we continue to execute on difficult comparatives and outperform our peers. Adjusted EBITDA was $103.1 million compared to $97 million in the prior year.
In the second quarter of 2024, we generated total revenue ex service fee of $304 million and adjusted EBITDA of $103 1 million compared to the last year or $268 1 million and an adjusted EBITDA of 97.0 million.
As a reminder service fee revenue as a pass through a non contributor earnings and is being phased out or.
Our total growth was plus 13, 4% year over year and same store comp was positive <unk>, 2%.
Positive Europe with 2% same store comp is in line with our expectations.
Our communications with investors, we down the middle as we continue to execute on difficult comparative and outperformed our peer set.
Adjusted EBITDA was $103 1 million compared to $97 million in the prior year.
Robert Lavan: We continue to invest in our people, with our same store comp payroll up 6.3 million year over year. Lucky Strike outperformed our expectations with a $6 million plus contribution to EBITDA in the quarter, compared to $4 million the previous year. Our cost structure, primarily employee payroll, normalizes after a double-digit bump in payroll in March 2023. Corporate expenses are down while you continue to invest in our event sales. Non-comp centers contributed $14 million of EBITDA on approximately $41 million of revenue. The first three weeks of January 2024 were difficult, primarily due to significant ice across the country.
We continue to invest in our people with our same store comp payroll up $6 $3 million year over year.
Lucky strike outperformed our expectations with a 6 million plus contribution to EBITDA in the quarter compared to 4 million the previous year.
Our cost structure, primarily employee payroll normalizes after a double digit bump in payroll in March 2023.
Corporate expenses are down while you continue to invest in our event sales team.
Non comp centers contributed $14 million of EBITDA on approximately $41 million of revenue.
The first three weeks of January 23, and four were difficult primarily due to significant ice across the country.
Robert Lavan: Same store comps over the past two weeks have rebounded. Due to the slow start, we are slightly revising our expectations for the third quarter to high single-to-teens growth and a flat-to-down low single-digit game score comp for the third quarter. We expect fourth quarter total revenue to be up around 20%. In the quarter, we spent $26 million on growth CapEx, $13 million on new build, and $10 million on maintenance. We spent $24 million on acquisitions, and we repurchased $80 million of shares in the quarter. This morning, we announced a five and a half cent quarterly dividend for an expected annual rate of 22 cents. Our board of directors additionally increased our share repurchase authorization to $200 million.
Same store comps over the past two weeks have rebounded.
Due to the slow start we are slightly revising our expectations for the third quarter. It's a high single to teens growth in a flat to down low single digit same store comp for the third quarter.
We expect fourth quarter total revenue to be up around 20%.
In the quarter, we spent $26 million on growth capex $13 million on Newbuild and $10 million on maintenance.
We spent $24 million on acquisitions, and we repurchased $80 million of shares in the quarter.
This morning, we announced a five five cent quarterly dividend for an expected annual rate of 22.
Our board of directors. Additionally, increased our share repurchase authorization to $200 million.
Robert Lavan: We have ample liquidity to continue investing in our growth and rewarding our shareholders. We also updated our capital gui. We're increasing our M&A spend from $160 million to $190 million. Conversions are up to $80 million from $75 million, and we continue to ramp up new builds, holding our previous guidance at $40 million. Our liquidity at the end of the quarter was $412 million, with nothing drawn on a revolver and $190 million of cash.
We have ample liquidity to continue to investing in our growth and rewarding our shareholders.
We also updated our capital guidance for the year.
Increasing our M&A spend from $160 million to $190 million conversions are up to $80 million from $75 million and we continue to ramp up new builds holding our previous guidance at $40 million.
Our liquidity at the end of the quarter was $412 million with nothing drawn on our revolver and $190 million of cash net debt was $960 million in bank credit facility net leverage ratio was two five times.
Operator: Net debt was $960 million, and the bank credit facility net leverage ratio was 2.5 times. We have several exciting initiatives underway and are continuing to evolve and innovate. We believe in our fundamental offering in ABC, or Acquisition, New Build, and Conversion Strategy, as part of our operating ethos, and we remain enthusiastic about our long-term growth trajectory. Thank you for your time, and we look forward to seeing you on the road in the coming years. We will now begin our question and answer session. At this time, I'd like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Steven Wieczynski from Stiefel.
We have several exciting initiatives underway and are continuing to evolve and innovate.
We believe in our fundamental offering an ADC, our acquisition Newbuild and converted and strategy as part of our operating ethos and we remain enthusiastic about our long term growth trajectory. Thank.
Thank you for your time, and we look forward to seeing you on the road in the coming months.
We will now begin our question and answer session. At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Our first question comes from the line of Stephen Wisinski from Stifel. Your line is open.
Steven Wieczynski: Your line is open. Hey guys, good morning.
Yeah, Hey, guys good morning.
Robert Lavan: So I want to ask about the ability to hold guidance, you know, with the headwinds you've already faced, you know, obviously, with weather so far here in the third quarter. And Bobby, you know, you called out the impact of weather so far. But, you know, if we look at your guidance for the third quarter and the fact that January is behind us, obviously, it seems like you guys might need to see a significant upswing in trends in February and March. So, you know, am I missing something there?
So I wanted to ask about the ability to to hold guidance with the <unk>.
Headwinds you've already faced.
Obviously with weather so far here in the third quarter and Bobby.
You've called out the impact of weather, so far but.
If we look at your guidance for the third quarter and the fact January is behind US obviously, it seems like you guys might need to see a significant upswing.
Trends in February and March so am I missing something there or are there other levers that you guys can use or willing to pull to get that third quarter more in line with your guidance.
Yes, I mean, the first three weeks of January.
Robert Lavan: Or, you know, are there other levers that you guys can, you know, use or are willing to pull to get that third quarter more in line with your guidance? Yeah, I mean, the first three weeks of January hit us for kind of about 7 to 8 million. But we haven't seen that, and we've seen a rebound the past two weeks, so we're pretty comfortable with our guidance at this point. Okay, so based on what you're seeing today, you just think kind of February and March can kind of carry you into that guidance range. Fair?
Hit us for kind of about $7 million to $8 million.
But we haven't seen that and we've seen a rebound in the past few weeks, so we're pretty comfortable with our guidance at this point.
Okay. So based on what Youre seeing today, you just think kind of February March kind of carry you into that guidance range fair.
Correct, Okay got it.
And then second question is for labs since he is on one of these calls for the for the first time, but <unk>.
Obviously you've been at.
The company for a long time.
Obviously, you've got a nice promotion here.
Is there anything you really want to kind of go after or change or any major initiatives that you think is really going to benefit the bolero story overtime.
Robert Lavan: Correct. Okay, I got it. And then the second question is for Lev, since he's on one of these calls for the first time. But, you know, Lev, you've obviously been at the company for a long time, you know, obviously, you've got a, you know, a nice promotion here. Now, is there anything you really want to kind of go after or change or any major initiative that you think is really going to benefit the Bowlero story Yeah, so I've been here long enough to see that we have probably the best mousetrap, the strongest business model out there. It really comes down to me focusing on the execution of that, to maximize that food and beverage and amusements attachment, to help continue to improve our people, our processes across the company, just to execute at a higher level. The business, at its core, is phenomenal. But, you know.
Yeah, So I've been here long enough to see that we have probably the best mousetrap, the strongest business model out there it really comes down to be focusing on the execution of that to maximize that food and beverage and amusement attachment to help.
<unk> to improve our people our processes across the company just to execute at a higher level the.
The business that is core is phenomenal.
But you know.
I don't want to get us to good to great from good to great with these processes.
Okay got you guys. Appreciate it thanks, Thank you very much.
Thanks, Steve.
Your next question comes from the line of Randy <unk> from Jefferies. Your line is open.
Yes, maybe just follow up on that a little bit.
Lev Ekster: I want to get us from good to great from great to great with these processes. Okay, gotcha guys. Appreciate it. Thanks. Thank you very much.
On the processes can you kind of give us some perspective on some of the things you're working on I think Bobby we had spoken at our winter summit.
Randal J. Konik: Thanks to you. Your next question comes from a line from Randy Konik from Jeffreys. Your line is open. Yeah, maybe we could follow up on that a little bit on the processes. Can you kind of give us some perspective on some of the things you're working on? I think, Bobby, we spoke at our Winter Summit about a food and beverage system that's being implemented or looked into. Just, just curious, can you give us some perspective on some of the things you're working on and areas of focus that we can see to help these already very high margins potentially go even higher?
I think of food and beverage system, that's being implemented or look into just just can you give us some perspective on some of the things you're working on and areas of focus.
That we can see to help these already very high margins potentially go even higher just just curious thanks guys.
Yeah.
Yes. This is les I'm happy to take that so Bob has been with us.
Not that long, but the level of data that he brings to the table is something that we haven't had at our fingertips. Historically, so our decision making is way more data driven these days, but also something we're focused on is really reducing the variance across all of our centers.
Lev Ekster: Thanks, guys. Yeah, this is Lev. I'm happy to take that. So, you know, Bobby's been with us, not that long, but the level of data that he brings to the table is something that we haven't had at our fingertips historically.
350 centers, we want to tighten up the processes. So can we apply.
Lev Ekster: So, our decision making is way more data driven these days, but also, something we're focused on is really reducing the variance across all of our centers, you know, 350 centers. We want to tighten up the processes. So, can we apply standards for repair maintenance budgets?
Standards for repair maintenance budgets can we give guidance on what the optimal staffing parties should be to really maximize the foot traffic in our centers and have that convert to revenue.
We're going to foster this culture of collaboration across our company and use what works best across I'll give the number of centers and expand that knowledge and that process to the rest of the centers.
Lev Ekster: Can we give guidance on what optimal staffing PARs should be to really maximize the foot traffic in our centers and have that convert to revenue? So we're going to foster this culture of collaboration across our company and use what works best across a given number of centers and expand that knowledge and that process to the rest of the centers. Gotcha. And then just any areas in particular you're mostly focused on in addition to the ones you just talked about? Anything around food and beverages or anything else?
Got you and then just any areas in particular Youre, mostly focused on in addition to.
The ones you just talked about anything around food and beverage or anything else.
Yes, I mean F&B were installing a very robust inventory management system that ultimately can add a significant amount of dollars to the bottom line.
We've always had a perpetual inventory.
Inventory system, so that opportunity is rolling out this summer we've talked about the <unk>.
Robert Lavan: Yeah, I mean, F&B, we're installing a very robust inventory management system that can ultimately add a significant amount of dollars to the bottom line. You know, we've always had a perpetual inventory system. So that opportunity is rolling out this summer. You know, we've talked about the website. The website will roll out in the next few months. And the reason that the website is so important is that it allows for dynamic pricing. Ultimately, our goal is to fill the centers on the weekends at the highest price we can and fill the centers at the most reasonable price we can during the week. And ultimately, dynamic pricing allows you to do that. And the website system will allow that.
Website.
<unk> will roll out in the next few months and the reason that the website is so important it allows for dynamic pricing.
Ultimately our goal is to fill the centers on the weekends at the highest price we can fill the centers at the most reasonable price we can during the week and ultimately dynamic pricing allows you to do that.
And in the web site system will allow that and then when we get to the summer.
The summer, we're going to re implement summer games, which is something we talked about that we did not have last year that cost us $10 million of revenue, but it also is going to be the website will allow us to effectively drive traffic in the slower times in the summer, which is sort of a key dynamic for really getting leverage out of our model.
Robert Lavan: And then when we get to the summer, you know, the summer, we're going to reimplement Summer Games, which is something we talked about that we did not have last year that cost us $10 million in revenue. But it also is going to be the website that allows us to effectively drive traffic in the slower times in the summer, which is sort of a key dynamic for really getting leverage out of our model. Thanks.
Thanks, and just last question on the capital plan, the 190 versus $1 60 is that a function of.
Just more assets, you think coming to market the bid ask spread narrowing like just give his perspective on the <unk>.
Randal J. Konik: This last question on the capital plan, 190 versus 160. Is that a function of, um, just more assets you think coming to market, the bid-ask spread narrowing? Just give us perspective on why the 190 versus 160, just the rationale behind that, thanks guys. Yeah, we so we bought lucky strike. We closed on September 15th. We got in there, and we're accelerating our capital plan there just because the opportunity set in lucky is significant. So it really is, you know We've got a few more deals in the pipeline, but really, at the end of the day, we're pulling Lucky Strike in where we thought we'd spend the capital over a few years. It's definitely going to be. I got it.
Why that $1 90 versus $1 60, just the rationale behind that thanks, guys. Yes, we bought Lucky strike. We closed September 15th we got in there and we're accelerating our capital plan there just because of the opportunity set and Lucky is is significant.
Really is the focus of that we've got a few more deals in the pipeline, but really the end of the day, we're pulling lucky strike in where we thought we'd spend the capital over a few years, it's definitely can be sooner.
Got it thanks guys.
Thank you.
Your next question comes from the line of Jason Tilton from Canaccord Genuity. Your line is open.
Hi, Jason Great. Good morning, Thanks for taking the question.
Just to start I was curious I'm Lucky strike in the press release, you talk a little bit about how profitability. There was ahead of targets I'm wondering if you could maybe just spend a minute drilling down on that a bit talking about some of the areas. We're already seeing savings and then some of these further areas of improvement that you've identified some of that which could be.
Robert Lavan: Thanks, guys. Thank you. Your next question comes from the line of Jason Tilchen from Canaccord Genuity. Your line is open. Hi Jason.
Centered around some of those investments we were just talking about.
Yes, I mean, the bolero procurement system is is very strong and so ultimately we put in our systems and Lucky we only closed on September 15.
Jason Ross Tilchen: Great morning. Thanks for taking the question. Just to start, I was curious about Lucky Strike. In the press release, you talked a little bit about how profitability there was ahead of targets. I'm wondering if you could maybe just spend a minute drilling down on that a bit, talking about some of the areas you're already seeing savings, and then some of the further areas of improvement that you've identified, some of that which could be centered around some of those investments you were just talking about Yeah, I mean, the Bowlero procurement system is very strong. And so ultimately, you know, we put in our systems, and lucky, you know, we only closed on September 15.
It's that but on top of that our events platform.
Crushed it in December and we had multiple center buyouts, which are very very profitable to the business.
Center buyouts are great because they take down the center exactly on the staffing you're doing how much food you are doing how much liquor youre doing things like that and that ultimately drove incremental profitability in those centers. So we're very happy with where lucky coming out.
Great. That's helpful and just one quick follow up.
Robert Lavan: So it's that, but on top of that, you know, our bench platform just crushed it in December, and we had multiple center buyouts, which are very, very profitable to the business. Center buyouts are great because they take down the center; you know exactly how much staffing you're doing, how much food you're doing, how much liquor you're doing, things like that. And that ultimately sort of drives incremental profitability in those centers. So we're very happy, which is lucky come out. Great, that's helpful.
Maybe you can give an update on how sort of the value bundles that you've been using during sort of the peak times have performed over recent months as you've expanded into more centers across the country.
Yes, I mean that ultimately that pitch.
Pitcher and every center, we're getting good uptake, you'll see that we're testing out the Ali sampler.
A lot of these things are taken.
Take a little bit of a pause in December because December is very focused on events, but we're pretty happy with the uptake really focused on what <unk> said is taking best practices from centers that are very good at up selling these products and pushing that to the rest of it.
Robert Lavan: And just one quick follow-up. Maybe give an update on how the value bundles that you've been using during sort of the peak times have performed in recent months as you've expanded them to more centers across the country? Yeah, I mean, ultimately, we've got pizza and pitchers in every center.
Portfolio.
Well I think look this is.
Tom I'll chime in and add.
Dave and Busters was down seven 8% on a same store basis in their last reported quarter. We were up two tenths of a percent right. So.
It's a it's a math we are massively outperforming the leisure and hospitality sector.
Robert Lavan: We're getting good uptake. You'll see that we're testing out the alley sampler. A lot of these things take a little bit of a pause in December because December is very focused on events, but we're pretty happy with the uptake. We're really focused on what Lev said, which is taking best practices from centers that are very good at upselling these products and pushing that to the rest of the world. Portfolio. Well, I think, look, this is Tom.
And so the way you get there is by doing all of these things like bundling value pricing tinkering with pricing at all of these other sort of continuous optimization exercises and so don't think of it as one initiative or another initiative that we talked about it's really it's really been system.
Thomas F. Shannon: I'll chime in and add. You know, Dave and Buster's was down 7.8% on the same store basis in their last reported quarter. We were up two tenths of a percent, right? So it's a map; we are massively outperforming the leisure and hospitality sector. And so the way you get there is by doing all these things like bundling, value pricing, tinkering with pricing, and all these other sorts of continuous optimization. And so don't think of it as one initiative or another initiative that we talk about. It's really, it's really been systematized.
And it's getting more optimized and we will continue to become more optimized under webb's leadership, but work, we're playing with pricing and promotion sort of all the time and I think that.
The result of being up when everyone all of our competitors all of our peers were down in some cases down massively shows you the strength of our model and the strength of how we operate and how we adjust on the fly.
Perfect. Thanks, so much.
Your next question comes from the line of Matthew Boss from Jpmorgan. Your line is open.
Great. Thanks.
Tom.
Thomas F. Shannon: And it's getting more optimized and will continue to become more optimized under Webb's leadership. But we're playing with pricing and promotion sort of all the time. And I think that the result of being up when everyone, all of our competitors, all of our peers were down, in some cases down massively, shows you the strength of our model and the strength of how we operate and how we adjust on the fly. Okay, thanks so much.
Good how are you.
Tom maybe just to start off could you speak to performance that youre seeing from Lucky strike, maybe relative to initial expectation and then could you just elaborate on the customer response, specifically to some of the pricing and promotion changes in how you saw this impact second quarter comps.
Matthew Robert Boss: Your next question comes from the line of Matthew Boss from J.P. Morgan. Your line is open. Great, thanks. Hey, good, how are you?
I'll take the first part and I'll hand off to a lab on the second part.
We are.
Please look lucky strike, it's outperformed our expectation they had a very very strong December.
Thomas F. Shannon: Tom, maybe to start off, could you speak to the performance that you're seeing from Lucky Strike, maybe relative to initial expectations? And then could you just elaborate on the customer response specifically to some of the pricing and promotion changes and how you saw this impact second quarter sales? I'll take the first part, and I'll hand off to Lev on the second part.
Very strong holiday season, and we're seeing.
<unk> high revenue numbers out of the Lucky strike properties. We also did we hired.
Nielsen to conduct a brand survey and they came in and concluded that the strength of the Lucky strike brand was between 50 and 100% stronger than bolero terms of aided and unaided customer awareness and so as an experiment we opened our most recent.
Thomas F. Shannon: We're very pleased with LuckyStrike. It's outperformed our expectations. They had a very, very strong December, a very strong holiday season, and we're seeing shockingly high revenue numbers out of the LuckyStrike properties. We also hired Nielsen to conduct a brand survey, and they concluded that the strength of the LuckyStrike brand was between 50 and 100% stronger than Bowlero in terms of aided and unaided customer awareness.
Centre, and Moore Park, California, which is just northwest of Los Angeles as a lucky strike and it is wildly outperformed expectations. So we feel very very good about the lucky strike brand. We're about to open our second new Lucky strike location in Miami that will open probably.
Thomas F. Shannon: And so, as an experiment, we opened our most recent center in Moorpark, California, which is just northwest of Los Angeles, as a lucky strike, and it has wildly outperformed expectations. So we feel very, very good about the Lucky Strike brand. We're about to open our second new Lucky Strike location in Miami. That'll open probably this month, if not the beginning of March.
This month, if not the beginning of March.
But we couldnt be happier with the Lucky strike brand Lucky strike performance, we already saw a 50% increase in profitability in the last quarter versus what Lucky strike had done a year ago under prior ownership and we're just getting started.
Thomas F. Shannon: But we couldn't be happier with the Lucky Strike brand and its performance. We already saw a 50% increase in profitability in the last quarter versus what it had done a year ago under prior ownership. And we're just getting started. And I'll give the second part of that question to Lev. Hey, so with regard to our promotions, like Tom mentioned earlier, we just continue to tinker, and we try new things, we try new price points, we try new offerings, things that work, we expand. So Tom mentioned the pizza and pitcher worked really well, or sorry, Bob, you mentioned that it's performing, right?
And I'll give the second part of that question <unk>.
So with regard to our promotions like Tom mentioned earlier, we just continue to Tinker and we try new things and try new price points and try new offerings things that work, we expand so Tom mentioned, the pizza and picture worked really well or sorry, Bob you mentioned that it's performing right. So what did we do we expanded that.
To our elite programs and now we actually have a national lead program that comes with a pizza and picture for every team and that's really resonating as one of our fastest national programs in terms of sign ups.
Lev Ekster: So what did we do? We expanded that to our league program. So now we actually have a national league program that comes with a pizza and pitcher for every team.
We're bringing summer games back, we're not going to bring it back exactly how we've done it in the past we have some learnings we're going to optimize that program, but at the end of the day all of these none of them operate in a vacuum we try to get foot traffic into our centers and now we're focused on execution once we have that customer.
Lev Ekster: And that's really responding, it's one of our fastest national programs in terms of signups. We're bringing summer games back, we're not going to bring them back exactly how we've done in the past. We have some learnings, and we're going to optimize that program. But at the end of the day, none of them operate in a vacuum; we try to get foot traffic into our centers. And now we're focused on execution once we have that customer. So we're seeing a really nice improvement in our NPS scores, which is our guest service landscape, right? We're investing in our people. And I think it's really showing in those results.
We're seeing a really nice improvement in our NPS scores, which is our guest service landscape right, we're investing into our people and I think it's it's really.
Showing in those results and now we get that foot traffic back with these promotions and we execute we convert that to revenue higher F&B attachment for example, yes.
When I.
Like when I look at.
December we took two points on retail.
We look back at it after four weeks of running and we saw no consumer pushback. So we've rolled it out in events.
Robert Lavan: And now we get that foot traffic back with these promotions, and we execute, we convert that to revenue, higher F&B attachment, for example. Yeah, when I, Matt, like when I look at December, we took two points off retail. We looked back at it after four weeks of running, and we saw no consumer pushback.
In January and events is up three.
<unk>, 3% in January so the consumer is not pushing back on our price movements.
And frankly, they see the value in what were charging and so ultimately we feel like the opportunity to continue going where we increased price in some places potentially increased shoe pricing, maybe lower the price of bowling, but increase the price of food like Theres, just a lot of opportunities to continue taking wallet share while giving the.
Robert Lavan: So we rolled it out at events. [inaudible] Three percent in January. So the consumer is not pushing back on our price movement, and frankly, they see the value in what we're charging, and so ultimately, we feel like the opportunity to continue going where we increase prices in some places potentially like increase shoe pricing, maybe lower the price of bowling, but increase the price of food. There's just a lot of opportunities to continue taking wallet share while giving the consumer a premium product. And then, Bobby, maybe just as we think multi-year, what's your level of visibility into the new unit pipeline for next year, where we sit today, or just the potential opportunity to accelerate new builds? And just how you view the whitespace opportunity in the highly fragmented Bowling Center total address. Yeah, well, we look at the white space as the total entertainment market. So let's, you know, you can see in our press release, we're moving away from the word center.
Consumer our premium products.
Great and then Bobby maybe just as we think multiyear what's your level of visibility to the new unit pipeline for next year, where we sit today or just the potential opportunity to accelerate new balance.
And just how you view the white space opportunity in the highly fragmented bowling center total addressable market.
Yes, well, we look at the white spaces as the total entertainment market.
You can see in our press release, we're moving away from the word center, we're moving towards locations.
The white space is significant from a newbuild perspective, we've got at least five a year for the next few years and you remember these newbuild they come in at $7 8 million versus our average unit value is 3 million. So for every newbuild that comes up it's effectively three smaller acquisitions.
Robert Lavan: We're moving towards locations. The white space is significant, you know, from a new build perspective. We've got at least five a year for the next few years. And remember, these new builds come in at seven, eight million, you know, versus our average unit value of three million. So for every new bill that comes up, it's effectively three smaller acquisitions. On the acquisition side, the bid-ask hasn't really come in yet, so we're kind of building dry powder while we expect a little bit more volatility in the entertainment space over the next few years. So I don't want to get pinned down by sort of unit count and unit growth, but we are building dry power when we expect sort of the aft to come. That's the block I want.
<unk>.
On the acquisition side.
The bid ask hasn't really come in yet so we're kind of building dry powder, while we expect a little bit more volatility in the entertainment space over the next year. So I don't want to get pinned down by by sort of unit count and unit growth, but we are building dry powder, when we expect sort of the <unk>.
<unk> to come down.
That's great color best of luck.
Your next question comes from the line of Eric Handler from Ross M. K M. Your line is open.
Robert Lavan: Your next question comes from a line from Eric Handler from Roth MKM. Your line is open. Yes, good morning.
Yes. Good morning, Thank you for the question.
Robert Lavan: Thank you for the question. Bobby, you spoke about increased payroll costs. I'm curious, is that what weighed on your gross margin on a year-over-year basis? And as for that anniversary itself, I believe you said at the end of the March quarter, does that allow gross margin then to start improving in fiscal 25? So there are two things that wait on our gross margin. So there is $6 million in payroll in the comp center that ultimately costs about 200 basis points in gross margin. The bigger one, and I want to just give these numbers, is that Lucky Strike and the new acquisitions did $14 million of EBITDA, but they have $8 million of DNA. So, you effectively have $6 million of gross profit on $41 million of sales.
Bobby you spoke about increased payroll costs.
In the quarter on a same pump basis.
Im curious is that weighed on your gross margin on a year over year basis, and as that anniversaries itself. I believe you said at the end of the March quarter does that allow gross margin then to start improving in fiscal 'twenty five.
So there are two things that weighed on our gross margins. So there is $6 million of payroll in our comp centers that that.
Ultimately cost us about 200 basis points on gross margin the bigger one and I want to just give these numbers is that lucky strike.
And the new acquisitions did $14 million of EBITDA.
They have $8 million of DNA. So you effectively have $6 million of gross profit on $41 million of sales. So the M&A accounting does depress our gross margin, but ultimately.
Robert Lavan: So, the M&A accounting does depress our gross margin, but ultimately, you know, when you use a seven-year formula for DNA for a business that is 50 years old plus, it's kind of skewing it in the short term, but it will benefit in the long term. You know, if I think about DNA last quarter on acquisitions, it was $4 million. Now, it's $8 million.
When you use a seven year formula for DNA for for.
For a business that is 50 years, plus it's kind of skewing it in the short term, but it will benefit in the long term.
If I think about DNA.
Last quarter on acquisitions, it was $4 million now it's $8 million.
Robert Lavan: Additionally, in the quarter, we had $1.4 million of DNA from when we closed West NIAC Lucky Strike. So, we are being, you know, very focused on cash flow and performance, but it does create some noise in the, Okay, great. And then the implementation of a dividend was a nice surprise. I'm curious, what made you decide now was the right time to increase capital returns? You know, complementing your buybacks with now you got this dividend, you know, at the same time you're increasing your investment spending. Um, so maybe talk a little bit about your balance. Yeah, so I joined here in May.
Additionally, in the quarter, we had $1 $4 million of DNA from we closed west Nyack Lucky strike. So we are being very focused on cash flow and performance, but it does create some noise in the numbers.
Okay, Great and then.
The implementation of a dividend was it was a nice surprise.
I'm curious what made you decide now was the right time to <unk>.
Kris capital returns.
Complementing your buybacks with now we've got this dividend at.
At the same time youre, increasing your investment spending.
So maybe you can talk a little bit about your balance sheet.
Yes, so I joined here in May.
Robert Lavan: I have been unbelievably impressed by sort of the cash flow generation of this business in the second and third quarters. We discussed that internally, you know, when we looked at all of our different outflows needed over the next few years, M&A, conversions, new builds, and we looked at our liquidity, and we had ample liquidity to continue buying back stock and pay a dividend. And so, effectively, you know, we're really excited about where the business is, but we're much more excited about where the business is going and the exit rate for FY24 and just the opportunities and capital. And frankly, there's more capital if we want to bring it in, but right now, we're still sitting on a lot of cash. So at the end of the day, we're going to reward shareholders and continue to invest in the business. Great, thank you very much.
And I have been unbelievably impressed by sort of the cash flow generation of this business in the second quarter third quarter, we discussed that internally when we look at all of our different outflows needed over the next few years M&A conversions.
New builds and we looked at our liquidity and we had ample liquidity to continue buying back stock and pay a dividend.
And so it's effectively we're really excited about where the business is but we're much more excited about where the business is going and sort of the exit rate on FY 'twenty, four and just the opportunities and the capital and frankly Theres more capital if we want to bring it in but right now we're still sitting on a lot of cash.
So at the end of day, we're going to reward shareholders and continue to invest in the business.
Great. Thank you very much.
Eric Owen Handler: Your next question comes from a line from Eric Wold from B. Reilly Securities. Your line is open. Thanks. Good morning.
Your next question comes from the line of Eric Wold from B Riley Securities. Your line is open.
Thanks, Good morning, so just.
Eric Christian Wold: So, two questions kind of follow up on prior comments. I guess, Bobby, or whoever wants to take it, I guess, on the average of 2% price taken in December, I know you talked about it kind of going in various forms from, you know, possibly shoes, food and beverage, bowling. I guess what drove the decision in each market or each center to make specific pricing moves either higher or lower? Was it competitive offerings in the market? Was it the specific trends of that location that drove each decision on pricing?
Two questions kind of follow up on prior comments.
I guess, Bobby or we're going to take it against.
The average of 2% price taken in December now you talked about kind of going in various forms from <unk>.
Possibly shoes food and beverage Boeing I guess, what drove the decision in each market are each center to make specific pricing either higher or lower or was it a competitive offering to the market with it with specific trends of that location kind of what drove each decision.
On pricing.
Robert Lavan: Yeah, so we only took retail. So remember, retail is, you know, a smaller portion of business in December. But the reason we took it was we wanted to test the consumer a little bit and see how much pushback there was, and there was none.
Yes, so we only took retail so remember retail is is.
Smaller portion of the business in December but the reason we took it was we wanted to test the consumer a little bit and see how much pushback. There wasn't there was none so ultimately we've had a pricing consultant in house for the past six months and we're really looking at pricing by hour.
Robert Lavan: So ultimately, we've had a pricing consultant in house for the past six months. And we're really looking at pricing by hour, by day, by center, by product. And we saw some, you know, low hanging fruit that we took in December that allowed us to test that change and whether the consumers would react negatively to it. They didn't.
Or by day by Center byproducts, and we saw some low hanging fruit that we took in December that allowed us to test that change and whether the consumer react negatively to it. They didn't so now we're pushing into events and so ultimately we're going to continue doing that we have.
Robert Lavan: So now we're pushing it into events, and so ultimately, we're going to continue doing that. We have another round of pricing changes coming, and those are very exciting because we're kind of coming to the end of this consultant's engagement. There's so much opportunity to be dynamic that the consumer, you know, will continue to just spend more and have a better product incentive. Got it. And then, um...
Another round of pricing changes coming.
And those are very exciting because we're kind of coming to the end of this consultant engagement. There is so much opportunity to be dynamic.
The consumer.
We'll continue to spend more and have better product in center.
Got it and then.
Thomas F. Shannon: The comments around the midweek promotions, kind of testing different things, seeing, you know, what worked, expanding that, maybe cutting back on ones that didn't work. Maybe talk about some of the stuff that hasn't worked as you expected in the kind of midweek promotion, their kind of promotional activity, and kind of, you know, what you learned from the ones that didn't work. Yeah, well, look, this is Tom.
The comments around the maybe promotions kind of testing different things seeing.
We're expanding that maybe coming back on the ones that didn't work maybe you talk about some of the stuff that hasn't worked.
As you expected on kind of a mid week promotion that kind of promotional activity and kind of.
What you learned from the ones that didn't work.
Yeah, well look this is Tom I'll take the EMEA Copa So we.
Thomas F. Shannon: I'll take the mea culpa. So, we had had summer games, which had built up to about $6 million in revenue. Summer games were like a ski mountain season pass. [inaudible] Business was so strong back in fiscal 23 that I decided to eliminate it in the summer of 2023 because I figured we could just get full price for those games. And while there was some offset, there wasn't nearly enough offset to have made it worthwhile to kill that program.
We had had some are games, which had built up to about $6 million of revenue somewhere games was like.
Ski mountain season pass.
And.
The business was so strong.
Back in <unk>.
Fiscal 'twenty three that I decided to eliminate it in the summer.
Sure.
2023, because I figure, we can just get full price for those games.
And.
While there was some offset there wasn't nearly enough offset to have made it worthwhile to kill that program. So as I've mentioned, we're going to bring that back but that probably eliminating that probably cost us an order of $6 million of revenue.
Thomas F. Shannon: So, as Lev mentioned, we're going to bring that back. But probably eliminating that probably cost us on the order of $6 million in revenue last summer. So that was a pretty good example of something that didn't work.
Last summer so that was a pretty good example of something that didn't work.
Jeremy Scott Hamblin: That we have learned, and we're not going to bring it back exactly as it was before. We're going to make it better. There will probably be a wider range of options for the consumer depending on what kind of experience they want, but that was entirely my decision, and it was a wrong decision. OK. Your next question comes from the line of Jeremy Hamblin from Craig Hallam Capital Group. Your line is open. Your line is open. Thanks, and congrats on the strong results.
We have learned and we're not going to bring it back exactly as it was before we're going to make it better.
<unk> be a wider range of options for the consumer depending on what kind of experience. They want but that was that was entirely my decision and it was a wrong decision.
Okay.
Okay.
Your next question comes from the line of Jeremy Hamblin from.
Craig Hallum Capital Group Your line is open.
Thanks, and congrats on the strong results I wanted to just dial in a little bit more on the lucky strike.
Robert Lavan: I want to just dial in a little bit more on the Lucky Strike integration and, you know, the acceleration of investment in that. In terms of thinking about outcomes and rationale, can you just get a little deeper into that in terms of, you know, is, in terms of getting the implementation done and the capital investment, is this more of an opportunity you see driving revenue? You talked about some of the systems you're bringing in that sounds like they are, you know, cost-focused as well.
Integration.
The acceleration of investment in that.
In terms of thinking about outcomes and rationale is can you just get a little deeper.
Into that in terms of.
Is it.
In terms of getting the implementation done and the capital investment is this more.
An opportunity you see driving revenue.
You talked about some of the systems you are bringing in it sounds like they are.
Cost focused as well, but where do you see more of that opportunity here over the next 12 months.
Robert Lavan: But where do you see, you know, more of that opportunity here over the next 12 months? Yeah, it's gonna be revenue and cost, right? So let's talk about the revenue. Fenway Park, which, you know, does.
Yes, it's going to be revenue and and cost right. So let's talk about the revenue guidance.
Anyway.
Which does <unk>.
Robert Lavan: $13 plus million in revenue at 16 links. We think we can put in another 40. So you can do the math on the magnitude of that. There's always a weight, you know, there's, there's, that's the kind of thing we're looking at and that we're effectively accelerating. You know, on the brand, I'll let Lev kind of talk more about the brand. Well, even on the revenue side, I want to point out, you know, I've managed our amusements department for the last few years. A lot of those locations haven't seen investment in the games in a number of years, and we're addressing that. There are some locations that had no arcades.
13 plus million of revenue at 16 land.
We think we can put in another four to eight.
You can do the math on the magnitude of that there's always a wait.
That's the kind of things.
Things were looking at and that we're effectively accelerating.
On the brand and I'll, let <unk> talk more about the brand look even on the revenue side I want to point out.
Managed our amusements department for the last few years.
A lot of those locations haven't seen investment into the games and a number of years. We're addressing that there are some locations that had no arcades, we're addressing that.
Lev Ekster: We're addressing that. And, you know. In terms of the brand, I think just, you know, I personally live in Miami.
And.
In terms of the brand.
I think just I foresee lived in Miami, we have lucky strike Miami opening.
Lev Ekster: We have Lucky Strike Miami opening. I visit that center. I see the inbound interest. People are reaching out before we've even opened for events and buyouts. We do open calls for hiring events. It looks like we're giving out free Taylor Swift tickets. The line is so long.
I visit that center ICD inbound interest people are reaching out before we even opened for events and buyouts, we do open calls for hiring events.
It looks like were giving out free Taylor Swift tickets. The line is so long we haven't seen that in any of our property is right.
Lev Ekster: We haven't seen that in any of our properties, right? Um, there's just a lot of demand for this brand, and I think we're going to get better with it. Our marketing department is engaged with an agency right now where we're going to develop the Lucky Shrug brand identity. And, you know, the results speak for themselves.
Theres just a lot of demand.
For this brand and I think we're going to get better with it our marketing department engage with an agency right now where we're going to develop the lucky strike brand identity and.
The results speak for themselves Lucky strike more park, the food and beverage sales relative to bowling dollars. Some of the highest we've seen right. So it's just a totally different concept.
Lev Ekster: Food and Beverage Sales Relative to Bowling Dollars, some of the highest we've seen. Right. So it's just a totally different concept.
Lev Ekster: And I think we're really going to lead into that. And as strong as the Lucky Strike brand is, you know, we're just really strong operators. And we know which levers to pull now to maximize Yeah, and if you look at just the math, right now, you know, lucky is operating a little bit better than sort of the 20 low 20s EBITDA margin. There's no reason that that margin couldn't be our corporate wide margin. I got it.
And I think we're really going to leading to that and as strong as it was the lucky strike brand.
Just really strong operators, and we know which levers to pull now to maximize it.
Yes.
If you look at just the math.
Right now.
He is operating a little bit better than sort of the 20 low <unk> EBITDA margin like Theres, no reason that that margin could be our corporate wide margin.
Got it Thats helpful.
Jeremy Scott Hamblin: That's helpful. Let's switch to just technology investments. You noted that, you know, the website is getting updates. I think it sounds like that's coming here in a couple of months, in terms of the refresh you're doing there. Wanted to just marry that also with Money Bowl, and you noted that that's becoming more of an out-of-center operation.
Let's switch to just technology investments you noted that.
The website is getting updates I think it sounds like that's coming here in a couple of months.
In terms of the refresh you're doing there wanted to just marry that also.
With money ball.
And you noted.
That that's becoming more of an out of center operation wanted to see if you could just provide some update there on the technology side and get a little bit deeper.
Robert Lavan: Wanted to see if you could just provide some updates there on the technology side and get a little bit deeper. Yeah, so Money Bowl is still operating in 64 centers. So we haven't, we haven't increased that yet. Money Bowl will be relaunching as a loyalty app. The company has a third-party loyalty app that has a lot of demand, but it doesn't have a lot of functionality, and that will be rolling out this summer.
Yes, so <unk> is still operating in 64 centers. So we havent, we havent increased that yet.
<unk> will be re launching as a loyalty app.
The company has a third party loyalty app that has a lot of demand, but it doesn't have a lot of functionality.
And that will be rolling out this summer.
Number.
Got it.
Jeremy Scott Hamblin: And then last thing, just, you know, looking ahead, over the summer period, you talked about, you know, summer games, and, and, you know, kind of bringing back some of the things you've done before. Just want to get a sense for when you're in an Olympic year, like this year, and, you know, some of the media that you have available within the locations and the centers. Is that something that, historically, has been positive or negative for traffic? And, you know, is this something you see as an opportunity, maybe to keep people in centers longer? Anything you've kind of got planned around that? No, this is Lev.
And then last thing just looking ahead.
Over the summer period, you talked about summer.
Summer games.
And kind of bringing back some of the things you've done before I just wanted to get a sense for when you are in an Olympic year like this year and.
Some of the media that you have available within the locations and the centers.
Is that something that in the past historically has been a positive or negative for traffic.
And is this something you see as an opportunity maybe to keep people in centers longer or anything you've kind of got planned around that.
No. This is I would argue that's a strike I don't think that has any bearing on our business, but I will tell you what media does have a bearing on our business. So we bought the PBA in 2019.
Lev Ekster: I would argue that's a stretch. I don't think that has any bearing on our business, but I will tell you what media does have a bearing on our business. So, when we bought the PBA in 2019, leagues across the country were dwindling. Our league business, you see, is strong. It's growing, and it's growing by headcount. It's growing by average price per game, and, obviously, revenue.
[noise] leagues across the country were dwindling.
Business, you see a strong it's growing and it's growing by head count it's grown by average price per game and obviously revenue.
Lev Ekster: So now we have this halo effect that the PBA gives us, right? Viewership for our first event for the TBA was up 17% year over year in January.
So now we have this halo effect that the PBA gives us right viewership on our first event for the PPA.
The players championship was up 17% year over year in January.
Lev Ekster: I think that property is getting stronger. But we have this flywheel now, and we send our PBA stars into our centers on busy league nights, and we delight and surprise our bowlers. That's something that we have at our disposal, and we're going to continue to lean into it. But I think, you know, in my growing involvement with the PBA, I think... It's all upside. We're trying new things with our core business, but we're trying new things with the PBA. So this year will be the first ever PBA All-Star Weekend in March. And we had a really interesting property in the PBA called the Elite League. It was team-based. We did one event a year. I attended last year's Bayside Bowl.
I think that property is getting stronger.
But we have this flywheel now and we send our PBA stars into our centers on busy Lee Knights, and we delight and we surprised our bowlers that's something that we have at our disposal and we're going to continue to lean into but I think.
In my growing involvement with the PVA I think.
It's all upside we're trying new things like our core business, but we're trying new things with the PVA. So this year will be the first ever PBA All star weekend in March.
We had a really interesting property in the PVA called the ALLETE lead. This team based we did one is on the year I attended last year Bayside Bowl.
Lev Ekster: It was electric. So we said, "Why shouldn't we do this more?" We're going to have five events for the league this season, and we're going to continue to grow the casual viewership for that property and increase awareness around bowling in our centers as a result. So that's more of the media that we're focused on. Great. Very helpful. Best wishes, guys. Thanks. Thank you. Your next question comes from the line of Michael Kupinski from Noble Capital Markets. Your line is open. Thank you and thank you for taking my questions and congratulations on the quarter. I want to go back to the increase in payroll during the quarter. I know last year you indicated that you were tweaking some of your staffing levels, and I was just wondering if you could give us a sense of where you are today in terms of your goals and in terms of center staffing levels. Hi Michael, this is Tom Shannon.
It was the electric so we said why shouldn't we do this more we're going to have five events for the league. This season, and we're going to continue to grow the casual viewership to that property and more awareness around bowling in our centers as a result, that's more of the media that we're focused on.
Okay.
Great Super helpful.
<unk> wishes guys. Thanks.
Thank you.
Your next question comes from the line of Michael Kopinski from Noble capital markets. Your line is open.
Thank you and thank you for taking my questions and congratulations on the quarter I wanted to go back to the increase in payroll in the quarter I know last year. You indicated that you were tweaking some of your staffing levels and I was just wondering if you can give us a sense.
Where you are today in terms of your goals in terms of center staffing levels.
Hi, Michael Tom Shannon, well, so as Bobby mentioned last March we gave all of our management staff.
Thomas F. Shannon: Well, as Bobby mentioned, last March, we gave all of our management staff in the field increases in salaries that range from 12% to 17 and a half, and we viewed that really as a one-time market adjustment. So we're going to lap that in short order, which will make the payroll comp much easier. We did that with the goal of reducing turnover and increasing guest satisfaction, and both have been achieved. We've dramatically reduced manager turnover, which is really important as the company continues to grow. You know, we need to retain managers and develop them for future leadership roles.
In the field.
Increases in salary that range from 12% to 17, 5% and we view that really as a one time market adjustment.
So we're going to lap that in short order, which will make the payroll account much easier.
We did that with the goal of reducing turnover and increasing guest satisfaction and both have been achieved we have dramatically reduced manager turnover.
Which was really important as the company continues to grow we need to retain managers and develop them for future leadership roles.
<unk>.
<unk>.
We added about 25 locations last year, we continue to be ambitious in our growth plan and we need a stable.
And an experienced group of managers to get you there and Thats, what we achieved we also.
Thomas F. Shannon: And, you know, as. [inaudible] We're about to do that. On the hourly side, you know, there aren't a lot of tweaks with the model other than getting the allocations between some of the back of the house and front of the house functions correct. So as we go deeper into the data, we find disconnects where we are running, for example, too much mechanic labor and not enough server labor, and that's really a function of how bowling centers have been run since the beginning of time.
Excuse me, we saw meaningful increases in net promoter score results, which was the other part of the goal so.
We're about to lap that.
On the hourly side.
Lot of tweaks with the model other than.
Getting the allocations between some of the back of the house and front of the house functions correct. So as we go deeper into the data we find disconnects, where we're running for example, too much mechanics labor and not enough server labor.
And Thats really a function of how Boeing centers have been run since the beginning of time and so going in and they are using the data we have and are available at our fingertips to really make the most informed and rational decisions with regard to allocations of labor within the center I think we will have a meaningful impact.
Thomas F. Shannon: And so going in and now using the data we have at our fingertips to really make the most informed and rational decisions with regard to allocations of labor within the center, I think will have a meaningful impact going forward. I can't quantify it, but I think it'll be pretty substantial. Thanks for that color.
Going forward I can't quantify it but I think.
It will be pretty substantial.
Thanks for that color all my other questions have been addressed thank you so much.
Michael A. Kupinski: All my other questions have been addressed. Thank you so much. Thank you. Your next question comes from a line by Audix Selhausen from Oppenheimer.
Thank you.
Your next question comes from the line of Ike So housing from Oppenheimer. Your line is open.
Operator: Your line is open. Hey, good morning. This is Isaac Gunn for Ian.
Hey, good morning. This has it gone through Ian Thanks for taking the question.
Isaac Gunn: Thanks for taking the question. It's been pretty much answered. But, you know, follow up on the event business. Looks like it continues to be very strong. Now, how much of that strength is driven by corporate demand versus birthday parties, other events, etc.? I guess, is there more room for upside as far as corporate event recovery is concerned? Thank you. Yeah, it's gonna keep going. I mean, it's it's both corporate and family.
Pretty much answered, but I'll follow up on the on the event business. It looks like it continues to be very strong how much of that strength was driven by corporate demand versus birthday parties other events et cetera.
I guess is there more room for upside as far as the corporate but recovery. Thank you.
Yes, it's going to keep going I mean, it's both corporate and family as I mean, we saw.
Robert Lavan: I mean, we saw significant strength on the corporate side in December and through January, despite the weather, we're still seeing a good increase in birthday parties and family events. So we are the beneficiary of trade down in this dynamic where, you know, we're not too expensive that it's something that a company can't do anymore or enough of a premium product that it's a place you'd be willing to bring your employees. And so we're definitely seeing a benefit: we always do well with birthday parties.
Significant strain on the corporate side in December and through January despite the weather, we're still seeing a good ramp on birthday parties and family events.
So we are the beneficiary of of trade down in this dynamic where.
We're not.
Too expensive that is something that like a corporate can't do anymore or enough of a premium product that its place you'd be willing to bring your employees and so we're definitely seeing a benefit that we always do well with birthday parties.
Robert Lavan: Okay, great. And then just on the pricing, I guess, you mentioned the 2% event in January. Is guidance assumes any more incremental price increases in the back half of the year? Or just will you continue to be flexible and adjust with demand as you move through the year?
Okay great.
Just on the pricing I guess.
You mentioned the 2%.
In January I guess does guidance assume any more incremental price increases in the back half of the year.
Or you just will you continue to be flexible and adjust with demand.
Through the year.
Robert Lavan: It does not assume any more price. Okay, great. Thank you very much. There are no further questions. This concludes today's conference call. Thank you for your participation. You may now disconnect.
It does not assume any more price increases.
Okay, great. Thank you very much.
There are no further questions. This concludes today's conference call. Thank you for your participation you may now disconnect.
Okay.
Okay.
Okay.
Yeah.