Q4 2024 Pinstripes Holdings Inc Earnings Call

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Pinstripes Holdings, Inc. fourth quarter, fiscal 24, earnings conference call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation.

Operator: Inc., fourth quarter, fiscal 24, earnings conference call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this conference is being recorded today, June 27, 2021.

Operator: In this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this conference is being recorded today, June 27, 2024. During management's presentation and in response to your questions, they will be making forward statements about the company's business outlook and expectations, including in respect of guidance for fiscal 2025.

Operator: During management's presentation and in response to your questions, they will be making forward-looking statements about the company's business outlook and expectations, including in respect of guidance for fiscal 2025. These forward-looking statements and all other statements that are not historical facts and reflect management's beliefs and predictions as of today, and therefore are subject to risks and uncertainties as described in the company's annual report on Form 10-K for Fiscal 2024 and subsequent SEC filings.

Please note that this conference is being recorded today, June 27, 2024.

During management's presentation and in response to your questions, they will be making full written statements about the company's business outlook and expectations.

Operator: These four-looking statements and all of the statements that are not historical facts and reflect management's beliefs and predictions out of today, and therefore are subject to risk and uncertainties as described in the company's annual report on Form 10-K for fiscal 2024 and subsequent SEC filings. Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate alternative measures of the company's operating performance that may be useful. Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the early days.

including in respect of guidance for fiscal 2025.

These four looking statements and a

and all other statements that are not historical facts and reflect management's beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the company's annual report on Form 10-K for fiscal 2024 and subsequent subsequent SEC filing.

Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles.

but are intended to illustrate alternative measures of the company's operating performance that may be useful.

Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release.

Operator: The company has posted its fourth quarter fiscal 2024 earnings release and earnings presentation on its website at www.pinstripes.com under the Investor Relations section.

The company has posted its fourth quarter fiscal 2024 earnings release and earnings presentation on its website at www.pinstripes.com under the Investor Relations section.

Dale Shuaway: And now, I would like to turn the conference over to Pinstripes founder, President, NCEO, the El Shuaway. Good afternoon, everyone, and thank you for joining our call today. We're pleased with the progress we've made across our business, including the opening of two new venues in New Jersey and Florida to start the calendar year, along with the 310 basis point improvement in our mature store contribution margin. Despite a challenging consumer environment, we were able to drive both positive comp growth and positive traffic growth in the fiscal fourth quarter. Of course, none of this would have been possible without the passion and dedication of our more than 1,800 team members as they provide our guests with those magical moments they've come to expect from visiting Pinstripes.

Operator: Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles but are intended to illustrate alternative measures of the company's operating performance that may be useful. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release. The company has posted its fourth quarter fiscal 2024 earnings release and earnings presentation on its website at www.pinstripes.com under the Investor Relations section. And now, I would like to turn the conference over to Pinstripes' Founder, President, and CEO, C. L. Shull.

Speaker Change: And now, I would like to turn the conference over to Pinstripe's Founder, President, and CEO , Neal Shorts.

C. L. Shull: Good afternoon, everyone, and thank you for joining our call today. We're pleased with the progress we've made across our business, including the opening of two new venues in New Jersey and Florida to start the calendar year, along with a 310 basis point improvement in our mature store contribution margin. Despite a challenging consumer environment, we were able to drive both positive comp growth and positive traffic growth in the fiscal fourth quarter. Of course, none of this would have been possible without the passion and dedication of our more than 1,800 team members as they provide our guests with those magical moments they've come to expect from visiting Pinstripes.

Neal Shorts: Good afternoon, everyone, and thank you for joining our call today.

Neal Shorts: We're pleased with the progress we've made across our business, including the opening of two new venues in New Jersey and Florida to start the calendar year, along with a 310 basis point improvement in our mature store contribution margin.

Neal Shorts: Despite a challenging consumer environment, we were able to drive both positive comp growth and positive traffic growth in the fiscal fourth quarter.

Neal Shorts: Of course, none of this would have been possible without the passion and dedication of our more than 1,800 team members as they provide our guests with those magical moments they've come to expect from visiting Pinstripes.

Dale Shuaway: Before we dive into the specifics of the quarter and full year, let me remind you of what sets Pinstripes apart from other concepts in the market. While we include bowling and bachi, what truly differentiates our brand is our made-from-scratch dining. Food and beverage comprise approximately 75 percent of our total revenue, with bowling bachi comprising the balance. Equally important is our private event space, where each of our locations host approximately a thousand private events per location per year, representing nearly 50 percent of our revenue. Our events, both social and corporate, are an extraordinarily important and profitable facet of our business, creating a flywheel effect of increased brand awareness.

C. L. Shull: Before we dive into the specifics of the quarter and full year, let me remind you of what sets Pinstripes apart from other concepts in the market. While we include bowling and bocce, what truly differentiates our brand is our made-from-scratch dining.

Neal Shorts: Before we dive into the specifics of the quarter and full year, let me remind you of what sets Pinstripes apart from other concepts in the market.

Neal Shorts: While we include bowling and bocce, what truly differentiates our brand is our made-from-scratch dining. Food and beverage comprise approximately 75% of our total revenue, with bowling and bocce comprising the balance.

C. L. Shull: Food and beverage comprise approximately 75% of our total revenue, with bowling and bocce comprising the balance. Equally important is our private event space, where each of our locations host approximately a thousand private events per location per year, representing nearly 50% of our revenue. Our events, both social and corporate, are an extraordinarily important and profitable facet of our business, creating a flywheel effect of increased brand awareness. While we're proud of our current event business, we're never satisfied.

Neal Shorts: Equally important is our private event space where each of our locations host approximately a thousand private events per location per year representing nearly 50% of our revenue.

Neal Shorts: Our events, both social and corporate, are an extraordinarily important and profitable facet of our business.

Dale Shuaway: While we're proud of our current event business, we're never satisfied. Accordingly, during the quarter, we transition to a new digital marketing agency partner. This transition will allow us to further accelerate the growth in our event's business through more effective campaign development and better utilization of our multi-million dollar digital marketing spend. We have also launched a number of exciting initiatives that will move the needle, both in sales and brand awareness. And we continue to believe that our events business will be an area of strength for us going forward.

Neal Shorts: creating a flywheel effect of increased brand awareness.

C. L. Shull: Accordingly, during the quarter, we transitioned to a new digital marketing agency partner. The transition will allow us to further accelerate the growth of our events business through more effective campaign development and better utilization of our multi-million dollar digital marketing spend. We have also launched a number of exciting initiatives that will move the needle, both in sales and brand awareness. And we continue to believe that our e-commerce business will be an area of strength for us going forward. With respect to profitability, while Pinstripes is an established player in the restaurant entertainment space nationally, with a 17-year history, we remain a relatively modest-sized company overall.

Neal Shorts: While we're proud of our current event business, we're never satisfied. Accordingly, during the quarter, we transitioned to a new digital marketing agency partner.

Neal Shorts: This transition will allow us to further accelerate the growth in our events business through more effective campaign development and better utilization of our multi-million dollar digital marketing spend.

Neal Shorts: We have also launched a number of exciting initiatives that will move the needle both in sales and brand awareness.

Neal Shorts: And, we continue to believe that our events business will be an area of strength for us going forward.

Dale Shuaway: With respect to profitability, while Pinstripes is an established player in the restaurant entertainment space nationally, with the 17-year history, we remain a relatively modest size company overall. Now with 17 total venues and generating almost 9 million in sales on average annually, we're beginning to better leverage our increased scale to drive cost efficiencies in the business. As we think about our business, we look to our mature store base, those open longer than 24 months, as a showcase of the power and potential of our brand. In the fourth quarter, our mature stores generated restaurant contribution margins of 11.4%, which represents a 310 basis point improvement from a year ago.

Neal Shorts: With respect to profitability, while Pinstripes is an established player in the restaurant entertainment space nationally.

Neal Shorts: with a 17-year history.

C. L. Shull: Now with 17 total venues and generating almost $9 million in sales on average annually, we're beginning to better leverage our increased scale to drive cost efficiencies in the business. As we think about our business, we look to our mature store base, those open longer than 24 months, as a showcase of the power and potential of our brand. In the fourth quarter, our mature stores generated restaurant contribution margins of 11.4 percent, which represents a 310 basis point improvement from a year ago. For the full fiscal year, our mature stores generated restaurant contribution margins of 14.4%, which represents a nearly 120 basis point improvement.

Neal Shorts: we remain a relatively modest-sized company overall. Now with 17 total venues and generating almost $9 million in sales on average annually, we're beginning to better leverage our increased scale to drive cost efficiencies in the business.

Neal Shorts: As we think about our business, we look to our mature store base, those open longer than 24 months as a showcase of the power and potential of our brand. In the fourth quarter, our mature stores generated restaurant contribution margins of 11.4 percent.

Neal Shorts: which represents a 310 basis point improvement from a year ago. For the full fiscal year, our mature stores generated restaurant contribution margins of 14.4%, which represents a nearly 120 basis point improvement.

Dale Shuaway: For the full fiscal year, our mature stores generated restaurant contribution margins of 14.4%, which represents an early 120 basis point improvement. While these improvements may seem substantial, we believe we have even more significant opportunity to improve margins through fiscal 2025. In recent months, our team has done a tremendous job identifying a number of cost savings opportunities, ranging from strategic, hourly and salary labor savings, a more favorable credit card processing, increasing sea agreement to more intense negotiations with our various vendor partners. In the aggregate, we believe these savings will represent approximately $10 million annually that will flow through to EBITDA and represent an improvement of approximately 500 basis points to our mature store contribution margins.

C. L. Shull: While these improvements may seem substantial, we believe we have an even more significant opportunity to improve margins through fiscal 2025. In recent months, our team has done a tremendous job identifying a number of cost savings opportunities, ranging from strategic, hourly, and salaried labor savings, a more favorable credit card processing fee agreement, to more intense negotiations with our various vendor partners. In the aggregate, we believe these savings will represent approximately $10 million annually that will flow through to EBITDA and represent an improvement of approximately 500 basis points to our mature store contribution market. These cost-saving opportunities were initiated at the end of the fiscal year, with the vast majority of the benefits expected to be realized in fiscal 2025.

Neal Shorts: While these improvements may seem substantial, we believe we have even more significant opportunity to improve margins through fiscal 2025.

Neal Shorts: In recent months, our team has done a tremendous job identifying a number of cost savings opportunities.

Neal Shorts: ranging from strategic, hourly and salaried labor savings, a more favorable credit card processing fee agreement, to more intense negotiations with our various vendor partners.

Neal Shorts: In the aggregate, we believe these savings will represent approximately $10 million annually that will flow through to EBITDA and represent an improvement of approximately 500 basis points to our mature store contribution margins.

Dale Shuaway: These cost saving opportunities were initiated at the end of the fiscal year, with the vast majority of the benefits expected to be realized in fiscal 2025. While we're pleased with the savings thus far, we will continue to explore avenues to further improve our store margin performance as we continue to benefit from the improved scale of our business.

Neal Shorts: These cost-saving opportunities were initiated at the end of the fiscal year with the vast majority of the benefits.

Neal Shorts: expected to be realized in fiscal 2025.

Neal Shorts: While we're pleased with the savings thus far, we will continue to explore avenues to further improve our store margin performance as we continue to benefit from the improved scale of our business.

Dale Shuaway: Now let's turn to units development. In the second half of last year, we re-ignited our growth pipeline with the opening of new locations in Los Angeles and Westfield to Pangamool and in Miami at the Esplanade at Aventure. We continued our growth momentum with the opening in Parama, New Jersey, at Garden State Plaza in February, followed by the opening of our Orlando location in April. Both locations have opened strong, and we're excited by the long-term potential of each. That said, not every location is the same.

C. L. Shull: While we're pleased with the savings thus far, we will continue to explore avenues to further improve our store margin performance as we continue to benefit from the improved scale of our business. Now, let's turn to unit development. In the second half of last year, we reinvigorated our growth pipeline with the opening of new locations in Los Angeles at Westfield Topanga Mall and in Miami at the Esplanade at Aventura. We continued our growth momentum with the opening of a Paramus, New Jersey, location at Garden State Plaza in February, followed by the opening of our Orlando location in April. Both locations have opened strong, and we're excited by the long-term potential of each. That said, not every location is the same.

Neal Shorts: Now let's turn to unit development.

Neal Shorts: In the second half of last year, we reignited our growth pipeline with the opening of new locations in Los Angeles and Westfield to Pangamal.

C. L. Shull: As we think about new store openings, we think about two distinct classes of developments we are entering. The first is an established development where we are typically taking over the location of a previous tenant, such as Uniqlo or Crate & Barrel, and the traffic patterns of the area are already well defined. The second is a new development where, at the time, we are among the first to open, and the customer traffic volume continues to grow as additional retail and dining options open around it. The long-term AUV potential of both types of developments is exciting.

Neal Shorts: and in Miami at the Esplanade at Aventura. We continued our growth momentum with the opening in Paramus, New Jersey at Garden State Plaza in February , followed by the opening of our Orlando location in April .

Neal Shorts: Both locations have opened strong, and we're excited by the long-term potential of each.

Dale Shuaway: As we think about new store openings, we think about two distinct classifications of developments we are entering. The first is an established development where we are typically taking over the location of a previous tenant. such as Uniglo or Creighton Varyl, and the traffic patterns of the area are already well defined. The second is a new development where, at the time, we are among the first to open, and the customer traffic volume continues to grow as additional retail and dining options open around us. While the long-term AUV potential of both types of developments are exciting, the maturation curve on new developments is typically longer.

Neal Shorts: That said, not every location is the same. As we think about new store openings, we think about two distinct classifications of developments we are entering.

Neal Shorts: The first is an established development where we are typically taking over the location of a previous tenant.

Neal Shorts: such as Uniglow or Crate and Barrel, and the traffic patterns of the area are already well-defined.

Neal Shorts: The second is a new development. We're at the time we are among the first to open and the customer traffic volume continues to grow as additional retail and dining options open around us.

Neal Shorts: While the long-term AUV potential of both types of developments are exciting, the maturation curve on new developments is typically longer.

Dale Shuaway: The best example of this with an armature store base is our Bacezza location, which opened as part of the new Piken-Rose development in Bacezza, Maryland, in 2017. The venue opened; it sails volumes lower than system average in the $6 million range. And as the development became more established and additional retail continued to open, we've seen a steady growth in our venue performance, which now generates an excess of 10 million annually, ensailed outperforming the system average. Within the four venues we've recently opened, we see our Topanga and Aventura venues through a similar lens. We currently expect these to be approximately 7 million average unit volume venues in fiscal 2025, with growth outpacing the rest of the system in future years as they grow into their longer-term 9 million plus AUV potential.

Neal Shorts: The best example of this within our mature store base is our Bethesda location, which opened as part of the new Pike and Rose development in Bethesda, Maryland in 2017.

C. L. Shull: The maturation curve on new developments is typically longer. The best example of this within our mature store base is our Bethesda location, which opened as part of the new Pike and Rose development in Bethesda, Maryland, in 2017. The venue opened at sales volumes lower than system average in the $6 million range.

Neal Shorts: The venue opened at sales volumes lower than system average in the $6 million range.

C. L. Shull: And as the development became more established and additional retail continued to open, we've seen steady growth in our venue performance, which now generates in excess of $10 million annually in sales, outperforming the system average. Among the four venues we've recently opened, we see our Topanga and Aventura venues through a similar lens. We currently expect these to be approximately 7 million average unit volume venues in fiscal 2025, with growth outpacing the rest of the system in future years as they grow into their longer-term 9 million plus AUV potential on the established development side of the equation.

Neal Shorts: As the development became more established and additional retail continued to open, we've seen a steady growth in our venue performance, which now generates in excess of $10 million annually in sales, outperforming the system average.

Neal Shorts: Within the four venues we've recently opened, we see our Topanga and Aventura venues through a similar lens.

Neal Shorts: We currently expect these to be approximately 7 million average unit volume venues in fiscal 2025.

Neal Shorts: with growth outpacing the rest of the system in future years as they grow into their longer-term 9 million plus AUV potential.

Dale Shuaway: On the established development side of the equation, we're very pleased with our openings in Orlando and Garden State Plaza as the initial guest reception has been fantastic. We currently expect these to be over 11 million in sales venues in fiscal 2025, with Orlando having the potential to unseat the highest volume venue in our system, San Mateo, over time. With all of our openings, we make a substantial investment, particularly in labor in the first few months of opening to ensure a great guest experience and the long-term success of the venue. While this results in lower store contribution during that time, by the end of the second year of operation, our venues operate largely in line with the system overall as they join our mature store base.

C. L. Shull: We're very pleased with our openings in Orlando and Garden State Plaza, as the initial guest reception has been fantastic. We currently expect these to be over 11 million in sales venues in fiscal 2025, with Orlando having the potential to unseat the highest-volume venue in our system, San Mateo, over time. With all of our openings, we make a substantial investment, particularly in labor, in the first few months of opening to ensure a great guest experience and the long-term success of the venue, although this results in lower still contribution during that time.

Neal Shorts: On the established development side of the equation, we're very pleased with our openings in Orlando and Garden State Plaza, as the initial guest reception has been fantastic.

Neal Shorts: We currently expect these to be over 11 million in sales venues in fiscal 2025 with Orlando having the potential to unseat the highest volume venue in our system, San Mateo, over time.

Neal Shorts: With all of our openings, we make a substantial investment, particularly in labor, in the first few months of opening to ensure a great guest experience and the long-term success of the venue.

C. L. Shull: By the end of the second year of operation, our venues will operate largely in line with the system overall as they join our mature store base. As we look ahead, we were excited to announce last month our new master broker partnership with Newmark that will further accelerate our development efforts. Through this partnership, we will have even greater access to prime real estate both domestically and internationally, as we continue to execute against the great promise of our brand.

Neal Shorts: While this results in lower still contribution during that time.

Neal Shorts: By the end of the second year of operation, our venues operate largely in line with the system overall as they join our mature store base.

Dale Shuaway: As we look ahead, we are excited to announce last month our new master broker partnership with Newmark will further accelerate our development efforts. Through this partnership, we will have even greater access to prime real estate both domestically and internationally as we continue to execute against the great promise of our brand. Within the development pipeline, we're excited to open two venues in Walnut Creek, California, and Coral Gable, Florida, in the second quarter of fiscal 25. And we look forward to the clustering benefits as these new venues join their sister locations in the markets of San Mateo and Aventura.

Neal Shorts: As we look ahead, we were excited to announce last month our new master broker partnership with Numark that will further accelerate our development efforts.

Neal Shorts: Through this partnership, we will have even greater access to prime real estate both domestically and internationally as we continue to execute against the great promise of our brand.

C. L. Shull: Within the development pipeline, we're excited to open two venues in Walnut Creek, California, and Coral Gables, Florida, in the second quarter of fiscal 25. And we look forward to the clustering benefits as these new venues join their sister locations in the markets of San Mateo and Aventura. As we look further into the development funnel, we have two prominent Seattle locations in Bellevue and Lake Union, a new Jacksonville location with Simon Property Group at the St. John's Town Center Lifestyle Project, and another potential 30 sites in various stages of development.

Neal Shorts: Within the development pipeline, we're excited to open two venues in Walnut Creek, California and Coral Gables, Florida in the second quarter of fiscal 25.

Neal Shorts: we look forward to the clustering benefits as these new venues join their sister locations in the markets of San Mateo and Aventura.

Dale Shuaway: As we look further into the development funnel, we have two prominent Seattle locations in Bellevue and Lake Union, a new Jacksonville location with Simon Property Group at the St. John's Town Center Lifestyle Project. and another potential 30 sites and various stages of development. Combined with our current portfolio of 17 open locations, we now have 22 total locations open or under lease.

Neal Shorts: As we look further into the development funnel, we have two prominent Seattle locations in Bellevue and Lake Union.

Neal Shorts: A new Jacksonville location with Simon Property Group at the St. John's Town Center Lifestyle Project.

Neal Shorts: and another potential 30 sites in various stages of development.

C. L. Shull: Combined with our current portfolio of 17 open locations, we now have 22 total locations open or under lease. Through high-quality, connection-oriented dining, entertainment, and event spaces, we continue to be well-positioned to capitalize on the dislocation of the retail industry. And we have the key experiential elements that developers desire to drive traffic and establish or transition their properties into lifestyle centers. In summary, we believe our brand is uniquely positioned for the current consumer environment, and we have a solid foundation of over 1,800 passionate team members that are excited to capitalize on the white space opportunity ahead of them. With that, let me now turn the call over to our CFO, Tony, to discuss our fiscal fourth-quarter results and fiscal 25 guidance in greater detail.

Neal Shorts: Combined with our current portfolio of 17 open locations, we now have 22 total locations open or under lease.

Dale Shuaway: Through high quality, connection-oriented dining, entertainment, event spaces, we continue to be well positioned to capitalize on the dislocation of the retail industry, and we have the key experiential elements that developers desire to drive traffic and establish or transition their properties into lifestyle centers. In summary, we believe our brand is uniquely positioned for the current consumer environment, and we have a solid foundation of over 1800 passionate team members that are excited to capitalize on the ahead of us.

Neal Shorts: through high-quality, connection-oriented dining, entertainment, and event spaces.

Neal Shorts: We continue to be well-positioned to capitalize on the dislocation of the retail industry, and we have the key experiential elements that developers desire to drive traffic and establish or transition their properties into lifestyle centers.

Neal Shorts: In summary, we believe our brand is uniquely positioned for the current consumer environment.

Neal Shorts: And we have a solid foundation of over 1,800 passionate team members that are excited to capitalize on the white space opportunity ahead of us.

Tony: With that, let me now turn the call over to our CFO, Tony, to discuss our fiscal fourth quarter results and fiscal 25 guidance in greater detail. Thank you, Dale, and good afternoon, everyone. For the fiscal fourth quarter, total revenue increased 5.9% to 36.2 million compared to 34.2 million in the same quarter last year, including a 4.9% increase in food and beverage revenues and a 9.5% increase in recreation revenues. This increase was driven by four new unit openings and a 0.4% increase in same-store sales.

Speaker Change: With that, let me now turn the call over to our CFO , Tony, to discuss our fiscal fourth quarter results and fiscal 25 guidance in greater detail.

Tony: Thank you, Dale, and good afternoon, everyone. For the fiscal fourth quarter, total revenue increased 5.9% to $36.2 million, compared to $34.2 million in the same quarter last year, including a 4.9% increase in food and beverage revenues and a 9.5% increase in recreation revenues. This increase was driven by four new unit openings and a 0.4% increase in same-store sales. As a reminder, our fourth quarter last year also included a 53rd week, which contributed approximately $2.5 million in sales to the prior-year quarter and negatively impacted year-over-year growth rates by approximately 10%. Turning to expenses.

Tony: The cost of food and beverage as a percentage of total revenue increased 100 basis points to 18.1%, driven by the opening of new locations with a less event mix relative to our overall portfolio and inefficiencies related to those open. Labor and benefits as a percentage of total revenue increased 271 basis points to 40.3%. Occupancy costs as a percentage of total revenue increased 206 basis points to 19.1%. Other operating expenses, as a percentage of total revenue, increased 114 basis points to 18.8%.

Tony: Thank you, Dale, and good afternoon, everyone. For the fiscal fourth quarter, total revenue increased 5.9% to $36.2 million.

Tony: compared to $34.2 million in the same quarter last year, including a 4.9% increase in food and beverage revenues and 9.5% increase in recreation revenues.

Tony: The increase is primarily due to new store openings... Venue-level EBITDA as a percentage of total revenue decreased 460 basis points to 3.7%, driven by the negative store contribution of our four new locations that opened in fiscal 2024, as these stores continue to progress through the maturation curve, with the profitability of this group already improving substantially. Please refer to our earnings release for a reconciliation of non-GAAP measures. As Dale mentioned, our mature stores, those more than 24 months old, generated average venue-level EBITDA margins of 11.4%, representing a 310 basis point improvement year over year.

Tony: This increase was driven by four new unit openings and a 0.4% increase in same-store sales.

Tony: As a reminder, our fourth quarter last year also included a 53rd week, which contributed approximately 2.5 million in sales to the prior year quarter and negatively impacted year-over-year growth rates by approximately 10 percentage points. Turning to expenses, cost of food and beverage as a percentage of total revenue increased 100 basis points to 18.1%, driven by opening of new locations with less event mix relative to our overall portfolio and inefficiencies related to those openings. Labor and benefits as a percentage of total revenue increased 271 basis points to 40.3%. Occupancy cost as a percentage of total revenue increased 206 basis points to 19.1%. Other operating expenses as a percentage of total revenue increased 114 basis points to 18.8%. The increase is primarily due to new store openings.

Tony: As a reminder, our fourth quarter last year also included a 53rd week, which contributed approximately $2.5 million in sales to the prior year quarter, and negatively impacted year-over-year growth rates by approximately 10 percentage points.

Tony: Turning to expenses.

Tony: Cost of food and beverage as a percentage of total revenue increased 100 basis points to 18.1 percent, driven by opening of new locations with less event mix relative to our overall portfolio and inefficiencies related to those openings.

Tony: Labor and Benefits as a percentage of total revenue increased 271 basis points to 40.3%.

Tony: Occupancy costs as a percentage of total revenue increased 206 basis points to 19.1%. Other operating expenses as a percentage of total revenue increased 114 basis points to 18.8%. The increase is primarily due to new store openings.

Tony: Then you level EBITDA as a percentage of total revenue decreased 460 basis points to 3.7%, driven by the negative store contribution of our four new locations that opened in fiscal 2024, as these stores continue to progress through the maturation curve, with the profitability of this group already improving substantially.

Tony: Venue-level EBITDA as a percentage of total revenue decreased 460 basis points to 3.7% driven by the negative store contribution of our four new locations that opened in fiscal 2024 as these stores continue to progress through the maturation curve with the profitability of this group already improving substantially.

Tony: Please refer to our earnings release for reconciliation of non-GAAP measures. As Dale mentioned, our mature stores, those more than 24 months, generated average venue level EBITDA margins of 11.4%. Representing a 310 basis point improvement year-over-year, we highlight our mature store base to showcase the power of our brand as our locations start to achieve their top line potential. General and administrative expenses increased to 7.4 million, including 1.6 million of expenses related to public company readiness, M&A, and termination of unfavorable vendor contracts quarter. Compared to $3.4 million in the same period last year. Turning the liquidity as of April 28th, 2024, we have $13.2 million in cash and cash equivalents and approximately $113 million of debt outstanding.

Tony: Please refer to our earnings release for a reconciliation of non-GAAP measures.

Speaker Change: As Dale mentioned, our mature stores, those more than 24 months, generated average venue level EBITDA margins of 11.4 percent.

Tony: We highlight our mature store base to showcase the power of our brand as our locations start to achieve their top line. General and administrative expenses increased to $7.4 million, including $1.6 million of expenses related to public company readiness, M&A, and termination of unfavorable vendor contracts in the court, compared to $3.4 million in the same period last year. Turning to liquidity, as of April 28, 2024, we had $13.2 million in cash and cash equivalents and approximately $113 million of debt outstanding. With that, let me now provide you with our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27, 2025 with a 16-week fourth quarter. Themes for sales growth of low single digits.

Speaker Change: representing a 310 basis point improvement year-over-year.

Speaker Change: We highlight our mature store base to showcase the power of our brand as our locations start to achieve their top-line potential.

Speaker Change: General and administrative expenses increased to $7.4 million, including $1.6 million of expenses related to public company readiness, M&A, and termination of unfavorable vendor contracts in the quarter, compared to $3.4 million in the same period last year.

Speaker Change: Turning to liquidity, as of April 28, 2024, we had $13.2 million in cash and cash equivalents and approximately $113 million of debt outstanding.

Tony: With that, let me now provide you with our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27th, 2025, with a 16-week fourth quarter. Same-source sales growth of low single digits. Four new venues opened during the year. Mature store venue level EBITDA margin of between 20% and 22%. General and administrative expenses of approximately $17 million, including $2.5 million of non-cash stock-based compensation and tax. Pre-opening expenses of approximately $3 million. And adjusted EBITDA between 19 and 21 million.

Speaker Change: With that, let me now provide you with our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27, 2025 with a 16-week fourth quarter.

Tony: Four new venues open during the year. Mature store venue level EBITDA margin of between 20% and 22%. General and administrative expenses of approximately $17 million, including $2.5 million of non-cash stock-based compensation and tax. Pre-opening expenses of approximately $3 million, and adjusted EBITDA between $19 and $21 million.

Speaker Change: Same-store sales growth of low single digits.

Speaker Change: Four new venues open during the year. Mature store venue level EBITDA margin of between 20% and 22%.

Speaker Change: General and administrative expenses of approximately $17 million including $2.5 million of non-cash stock-based compensation and tax.

Speaker Change: pre-opening expenses of approximately $3 million and adjusted EBITDA between $19 and $21 million.

Operator: We'd like to thank you again for your interest in Pinstripes. Dale and I are now happy to answer any questions that you may have.

Operator: We'd like to thank you again for your interest in Pinstripes. Dale and I are now happy to answer any questions that you may have. Operator, please open the line for questions.

Speaker Change: We'd like to thank you again for your interest in Pinstripes. Dale and I are now happy to answer any questions that you may have. Operator, please open the line for questions.

Operator: Operator, please open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask the question, please first start on one on your telephone; keep ahead. A confirmation tone will indicate your line is in the question key. You may first start, so if you would like to remove your question from the key. For participants, use the speaker equipment.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question key. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing restart. Our first question comes from the line of Brian Bittner with Oppenheimer & Company. Please proceed with your question.

Brian Bittner: Thanks. Good afternoon.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question key. You may press star 2 if you would like to remove your question from the queue.

Operator: It may be necessary to pick up your hands at before pressing the start.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing restart.

Ryan Bittner: Our first question comes from the line of Ryan Bittner with Oppenheimer and Captain. Please proceed with your question. Thanks, good afternoon. I wanted to dive a little deeper into your EBITDA guidance of 19 to 21 million in 2025. I'm trying to get there in the model in Tony. It seems like you need venue level EBITDA across your portfolio to approach 40 million in 2025 to get there versus 13 million in 24. Is that correct? Because that would suggest a venue level margin for the system that's incredibly high, at least in line with the mature margin guidance that you've given.

Speaker Change: Our first question comes from the line of Brian Bittner with Oppenheimer & Company. Please proceed with your question.

Brian Bittner: I wanted to dive a little deeper into your EBITDA guidance of $19 to $21 million in 2025. I'm trying to get there in the model. Tony, it seems like you need venue-level EBITDA across your portfolio to approach $40 million in 2025 to get there versus $13,024,000. I mean, is that correct? Because that would suggest a venue-level margin for the system that's incredibly high, at least in line with the mature, margin guidance that you've given. So can you help us maybe understand, I don't know, what revenue base you're using to get to this EBITDA guidance or anything I may be missing in getting there? Yeah,

Brian Bittner: Thanks, good afternoon. I wanted to dive a little deeper into your EBITDA guidance of 19 to 21 million in 2025. I'm trying to get there.

Tony: In the model, and Tony, it seems like you need venue-level EBITDA across your portfolio to approach $40 million in 2025 to get there versus

Speaker Change: 13 million and 24 I mean is that correct because that would suggest a venue level margin for the system that's incredibly high at least in line with the mature

Tony: Can you help us maybe understand what revenue base you're using to get to the EBITDA guidance or anything missing and getting there? Let me break it down a little bit, as we walk year over year. We've got $10 million to cost savings, $1 million of top growth in the mature stores. Again, this is all flow through to the EBITDA. $6 million lower in pre-opening year over year. Then about $10 million in non-comp. This is the four stores that we're open as of the end of fiscal 24. That's going from a loss of about $3.2 million up to about $7 million of venue level EBITDA.

Speaker Change: margin guidance that you've given so can you help us maybe understand I don't know what revenue base you're using to get to this EBITDA guidance or anything I may be missing in getting there?

Tony: Hey Brian, let me break it down a little bit kind of as we walk year over year so we've got ten million dollars of cost savings right? A million dollars of comp growth in the mature stores. Again, this is all, you know, going to flow through to EBITDA.

Brian Bittner: Hey, Brian . Let me break it down a little bit, kind of as we walk year over year. So we've got $10 million of cost savings.

Brian Bittner: Right? A million dollars of comp growth in the mature stores. Again, this is all, you know, flow through to the EBITDA.

Tony: Six million lower in pre-opening year over year, and then about $10 million in non-comp, so this is the four stores that were open as of the end of fiscal 24. So that's going from a loss of about $3.2 million up to about $7 million of venue-level EBITDA, and then rounding that out would be about $5 million of new stores that will open venue level. Your overall.

Brian Bittner: Six million lower in pre-opening year-over-year.

Brian Bittner: And then about $10 million in non-comp, so this is the four stores that were open as of the end of fiscal 24. So that's going from a loss of about $3.2 million up to about $7 million of venue level EBITDA.

Tony: Then rounding that out would be about $5 million of new stores that will open venue level EBITDA. You're overall percentage seemed a bit high relative to what we're seeing, but I think that walk should be helpful for you.

Brian Bittner: And then rounding that out would be about $5 million of new stores that will open venue-level EBITDA.

Speaker Change: Your overall percentage seemed a bit high relative to what we're saying, but I think that walk should be helpful for you.

Brian Bittner: Okay. And in the press release, you said that traffic was positive in the fourth quarter. And so, what was the average check maybe in the fourth quarter? Can you help us understand what's driving the positive traffic versus maybe the average check headwinds you're seeing? Are consumers just managing their check more tightly, but you're obviously doing a great job of driving traffic, trying to understand the bifurcation between those dynamics?

Tony: In the press release, you said that traffic was positive in the fourth quarter.

Speaker Change: you.

Speaker Change: Okay, um, and in the press release you said that traffic was positive in the fourth quarter?

Tony: and so what what was average check maybe in the fourth quarter can you help us understand what's driving the positive traffic first maybe the average check headwind you're seeing our consumers just managing their check more tightly but you're obviously doing a great job of driving traffic trying to understand the bifurcation between those dynamics yeah typically how we've bifurcated before right as we call out price which was zero in the in the quarter and so what's left is is traffic average check was pretty pretty consistent about forty dollars so you know I think traffic was positive it wasn't majorly positive but we had no price in the quarter so we lacked all the price from the prior year in the quarter okay that's helpful my last question and I'll get back in the queue is just the 25 guidance for venue openings of four that compares to kind of the six to eight annual openings that you guys are targeting moving forward is the delta between the four and the six days just a timing of openings in fiscal 25 situation or is there anything else to unpack as it relates to 2025 unit opening yeah it's just timing you know permitting has been a problem in many markets and we're just being honest with ourselves about that okay thank you thank you our next question comes with a line of Peter Salo with BTIG you can proceed with your question hey great thanks for taking the question Tony maybe can you can you help us out a little bit on just the cadence of development for fiscal 25 I mentioned two units in the second quarter can you just help us out with the remaining two when should we expect those to open and and where Peter it's Dale let me give you a little flavor so Walnut Creek we're planning to open late August rather soon coral gables months to after that and then we're doing both Bellevue and Lake Union called in the greater Seattle market will open the beginning of fiscal 25 Jacksonville the Simon project that we're doing uh St.

Speaker Change: And so what was average check maybe in the fourth quarter? Can you help us understand?

Speaker Change: What's driving the positive traffic versus maybe the average check headwinds you're seeing? Are consumers just managing their check more tightly? But you're obviously doing a great job of driving traffic. Try and understand the bifurcation between those dynamics.

Tony: Yeah, typically, how we've bifurcated before, right? We call out price, which was zero in the quarter, and so What's left is traffic. Average check was pretty consistent, about $40. Um, So, you know, I think traffic was positive. It wasn't majorly positive, but we had no price in the quarter. So we lapped all the price from the prior year in the quarter.

Speaker Change: Yeah, typically how we've bifurcated before, right, is we call out price, which was zero in the quarter. And so...

Speaker Change: What's left is traffic. Average check was pretty pretty consistent, about $40.

Speaker Change: So, you know, I think traffic was positive, it wasn't majorly positive, but we had no price in the quarter, so we lapped all the price from the prior year in the quarter.

Speaker Change: Okay, that's helpful. My last question, and I'll get back in the queue, is just the 25 guidance for venue openings of four.

Brian Bittner: Okay, that's helpful. My last question, and I'll get back in the queue, is just the 25 guidance for venue openings of four. That compares to kind of the six to eight annual openings that you guys are targeting moving forward. Is the delta between the four and the six to eight just a timing of openings in fiscal 25, or is there anything else to unpack as it relates to 2025 unit openings?

Speaker Change: That compares to kind of the six to eight annual openings that you guys are targeting moving forward. Is the Delta between the four and the six to eight just a timing of openings in fiscal 25 situation or is there anything else to unpack as it relates to 2025 unit opening?

Tony: Yeah, it's just timing, you know; permitting has been a problem in many markets, and we're just being honest with ourselves about that. Okay, thank you.

Speaker Change: Yeah, it's just timing, you know, permitting has been a problem in many markets and we're just being honest with ourselves about that.

Speaker Change: Okay. Thank you.

Speaker Change: Bye.

Operator: Our next question comes from the line of Peter Sala with VTIG. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Peter Sala with VTIG. Please proceed with your question.

Speaker Change: Hey, great. Thanks for taking the question. Tony, maybe can you help us out a little bit on...

Peter Sala: Hey, great. Thanks for taking the question. Tony, maybe you could help us out a little bit on just the cadence of development for Fiscal 25? I think you mentioned two units in the second quarter. Can you just help us out with the remaining two? When should we expect those to open, and where?

Speaker Change: Just the cadence of development for Fiscal 25, I think you mentioned two units in the second quarter. Can you just help us out with the remaining two? When should we expect those to open and where?

Dale: Yeah, Peter, it's Dale. Let me give you a little flavor of Walnut Creek. We're planning to open in late August, rather soon. Coral Gables.

Dale: Yeah Peter, it's Dale. Let me give you a little flavor so...

Dale: Uh... month two after that, and then we're doing both Bellevue and Lake Union, calling it the Greater Seattle Market. We'll open at the beginning of Fiscal 25. Jacksonville to Simon, a project that we're doing. St. John's Center, that will open. Q4 of our fiscal 25. So those are the signed committed locations, and then there are a number of other sites under LOI or under serious consideration that would come after that at possibly the end of fiscal 25 or in calendar 25.

Dale: months to after that.

Dale: And then...

Speaker Change: We're doing both Bellevue and Lake Union, calling the Greater Seattle Market.

Peter Sala: Okay, so as you see right now with the four venues that are going to open in fiscal 25, relative to your six to eight, I guess, prior expectations on an annual year, should we expect fiscal 26 to be, you know, above that range or at the high end of the, you know, call it six to eight? Just try to understand if this is timing, if more units are shifting into fiscal 26. Yeah, fair question.

Dale: Yeah, fair question. I'd say more of the latter. The expectation for Fiscal 26 will be more back to that 6 to 8 location.

Speaker Change: We'll open the beginning of Fiscal 25.

Speaker Change: Jacksonville, the Simon project that we're doing.

Dale: John Center that will open Q4 of our fiscal 25, so those are the thine committed locations, and then that there are a number of other fights under L.O.I.

Speaker Change: St. John's Center, that will open Q4 of our fiscal 25.

Speaker Change: So those are the signed committed locations and then there are a number of other sites under LOI or under serious considerations that would come after that in possibly end of fiscal 25 or in calendar 25.

Dale: or under serious consideration that would come after that in possibly end of fiscal 25 or in calendar 25 understood okay so as you see it right now with the four venues that are going to open in fiscal 25 you know relative to your 6 to 8 I guess prior expectations on an annual year should we expect fiscal 26 to be you know above that range or at the high end of the you know call it 6 to 8 just just try to understand if this is timing if more units are shifting into uh it's 26.

Speaker Change: Understood. Okay, so as you see it right now with the four venues that are going to open in fiscal 25, you know, relative to your six to eight,

Speaker Change: I guess prior expectations on an annual year. Should we expect fiscal 26 to be, you know, above that range or at the high end of the, you know, call it 6 to 8, just try to understand if this is timing, if more units are shifting into fiscal 26.

Dale: Fair question. I said more the latter; the expectation for fiscal 26 will be more back to that 6 to 8 locations. Yes.

Speaker Change: Yeah, fair question. I'd say more of the latter. The expectation for fiscal 26 will be more back to that six to eight locations.

Dale: Okay, and just lastly on my end in terms of pricing for fiscal 25. What are your expectations? Are you guys planning on taking more pricing, or are you holding the line there? Thank you. Price increase going in in the beginning of Q2, so we're putting in place about 30 days from now. Got it. Okay. Thank you very much.

Peter Sala: Okay, and just lastly, on my end, in terms of pricing for fiscal 25, what are your expectations? Are you guys planning on taking more pricing, or are you holding the line there? Thank you.

Speaker Change: Yes.

Speaker Change: Okay, and just lastly on my end, in terms of pricing for Fiscal 25,

Speaker Change: What are your expectations? Are you guys planning on taking more pricing, or are you holding the line there? Thank you. Price increase going in in the beginning of Q2, so we're putting it in place about 30 days from now.

Dale: Price increase is going in at the beginning of Q2, so we're putting it in place for about 30 days.

Peter Sala: Got it. Okay. Thank you very much. I'll pass it along.

Operator: I'll pass it along.

Speaker Change: Got it. Okay. Thank you very much. I'll pass it along.

Zach Riddle: Thank you. And our next question comes from the line of Zach Riddle with William Blair.

Operator: And our next question comes from the line of Zach Riddle with William Blair. Please proceed with your question.

Speaker Change: Thank you. And our next question comes from the line of Zach Riddle with William Blair. Please proceed with your question.

Zach Riddle: Do you foresee your two questions? Hi, thanks. Just a couple of questions here on my end. I guess first could you help us triangulate the improvement in mature unit level margins in fiscal 25? Where would I guess where are most of the cost savings coming from, or could you give us a little bit more detail on that? Sure. So about I'll break down kind of the 10 million that we've been referencing, so about 5 million comes from labor, and that's pretty evenly split between salary to an hourly labor. And then we've got, you know, other store Outbacks, which is across, you know, a few key vendors of about 4 million.

Zach Riddle: Hi, thanks. Just a couple of questions here on my end. I guess first, could you help us triangulate the improvement in mature unit level margins in fiscal 25? Where would I guess most of the cost savings coming from, or could you give us a little bit more detail on that?

Zach Riddle: Hi, thanks. Just a couple of questions here on my end. I guess, first, could you help us triangulate the improvement in mature unit-level margins in fiscal 25? Where would, I guess, where are most of the cost savings coming from, or could you give us a little bit more detail on that?

Tony: Sure, so I'll break down kind of the 10 million that we've been referencing. So about 5 million come from labor, and that's pretty evenly split between salaried and hourly labor. And then we've got, you know, other store op-ecks, which are across, you know, a few key vendors of about $4 million. And then we've got, you know, a couple, you know, kind of smaller amounts of about $1 million, you know, in liquor and food.

Speaker Change: Sure, so about, I'll break down kind of the 10 million that we've been referencing, so about 5 million comes from labor, and that's pretty evenly split between salaried and hourly labor.

Speaker Change: And then we've got, you know, other store op-ecs.

Speaker Change: which is across, you know, a few key vendors of about 4 million. And then we've got, you know, a couple, you know, kind of smaller amounts of about $1 million, you know, in liquor and food.

Tony: And then, and then we've got, you know, a couple, you know, it's kind of smaller amounts of about a million dollars, you know, in liquor and food.

Tony: Great.

Zach Riddle: Great. And then, I guess just kind of moving on to trends during the quarter, would you be able to help us, kind of, what do you think about the health of the consumer across the walk-in and the entertainment sides of the business?

Tony: And then I guess just kind of moving on to trends during the quarter, which you be able to help us kind of how do you think about the health of the consumer across walk-in and the entertainment sides of the business? I mean we saw, you know, softening the consumer. You know, as we sit here now in Q1, we're seeing what everybody else is seeing. You know, but as we paced kind of in Q4, you know, January was sort of flat. February was a bit negative you know almost down 5%. March was flat and then April was actually strong up 8% really led by our events business. So I mean overall macro you know backdrop we're seeing you know some consumer softening everyone's seeing you know but nothing drastic.

Speaker Change: Great, and then...

Speaker Change: I guess just kind of moving on to trends during the quarter, would you be able to help us

Speaker Change: How do you think about the health of the consumer across walk-in and the entertainment sides of the business?

Tony: I mean, we saw, you know, a softening in the consumer, you know, as we sit here now in Q1, we're seeing what everybody else is seeing, you know, but as we paced kind of in Q4, we, January was sort of flat, and February was a bit negative, you know, almost down 5%. March was flat, and then April was actually strong, up 8% really led by our events business. So, I mean, the overall macro, you know, backdrop, we're seeing, you know, some consumer softening that everyone's seeing, but nothing drastic.

Speaker Change: I mean, we saw, you know, softening the consumer, you know, as we sit here now in Q1, we're seeing what everybody else is seeing.

Speaker Change: You know, but as we paced kind of in Q4, you know, we January was sort of flat February was was a bit negative, you know, almost down 5% March was flat and then April was actually strong up 8% Really led by our events business

Speaker Change: So, I mean, overall macro, you know, backdrop, we're seeing, you know, some consumer softening that everyone's seeing, you know, but nothing drastic.

Tony: Great. And then I think the last one for me, so I know you said you were playing on taking pricing about 30 days. How much price do you plan to take? It's going to be about 2% is the effective you know the effect on sales.

Zach Riddle: Great. And then I think the last one for me. So I know you said you were planning on taking the price in about 30 days. How much price do you plan to take?

Speaker Change: Great, and I think the last one for me, so I know you said you were planning on taking price in about 30 days. How much price do you plan to take?

Tony: It's going to be about 2%, which is the effective, you know, the effect on sales. Great, thanks.

Speaker Change: It's going to be about 2%.

Speaker Change: is the effective, you know, the effect on sales.

Zach Riddle: Great thanks. I'll jump back in the kill. Exactly. Thank you.

Zach Riddle: Great, thanks. I'll jump back in the queue.

Speaker Change: Great, thanks. I'll jump back in the queue.

Speaker Change: Thanks, Hank.

Dale Shuaway: And ladies and gentlemen, we have reached the end of today's question, and I'd like to turn a call back over to Dale's. We just want to, Tony and I thank you for joining us today. We're excited with all the progress we've made, and we certainly welcome you joining us soon in Walnut Creek and Coral Gables and enjoying the magic at any of our locations. Thanks for joining us.

Operator: And ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn the call back over to Dale Schwartz for his closing remarks.

Hank: Thank you.

Speaker Change: And ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn the call back over to Dale Schwartz for closing remarks.

Dale Schwartz: No, we just want to, Tony and I, thank you for joining us today. We're excited with all the progress we've made. And we certainly welcome you joining us soon at Walnut Creek and Coral Gables and enjoying the magic at any of our locations. Thanks for joining us.

Operator: And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Dale Schwartz: Tony and I thank you for joining us today. We're excited with all the progress we've made and we certainly welcome you joining us soon at Walnut Creek and Coral Gables and enjoying the magic at any of our locations. Thanks for joining us.

Operator: And this concludes today's conference, and you may disconnect your line at this time. Thank you for your participation. Pinstripes Holdings

Speaker Change: And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.