Q1 2025 Pinstripes Holdings Inc Earnings Call
¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶
Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Pinstripes Holdings Inc. First quarter fiscal 2025 earnings conference call.
Speaker Change: Today ladies and gentlemen, and thank you for standing by. Welcome to the Penn Strikes Holding Inc. 1st quarter fiscal 2025 earnings conference call. At this time, all participants have been placed in a listen-only mode, and lines will be open for your questions following the presentation.
Operator: At this time, all participants have been placed in a listen-only mode, and minds will be open for your questions following the presentation. Please note that this conference is being recorded today, September 4, 2024. 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 the respect of guidance for fiscal 2025. These forward-looking statements and all their 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 quarterly report on Form 10-K for fiscal 2024 and subsequent SEC filings.
Speaker Change: Please note that this conference is being recorded today, September 4, 2024.
Speaker Change: 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.
Speaker Change: including respect of guidance for fiscal 2025. These forward-looking statements and all those statements that are not historical facts.
Speaker Change: and reflect management's beliefs and predictions as of today. And therefore, our subject to risks and uncertainties as described in the copies quarterly report of one 10K, for fiscal 2024, and subsequent SEC violence.
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. Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release.
Speaker Change: Management will also discuss non-gap financial measures as part of today's conference call.
Speaker Change: These non-gap measures are not prepared in accordance with generally accepted accounting principles. But are intended to illustrate alternative measures of the companies.
Speaker Change: Operating performance that may be useful.
Speaker Change: Reconciliation of the non-gap financial measures to the most directly comparable gap measures can be found into earnings release.
Operator: The company has posted its first quarter fiscal 2025 earnings release and an earnings presentation on its website at www.pinstripes.com under the Investor Relations section.
Speaker Change: The company has posted its first quarter fiscal 2025 earnings release and an earnings presentation on its website at www.constrips.com under the Investor Relations section.
SalesWords: And now, I would like to turn the conference over to Pinstripes Spounder, President and CEO, SalesWords. Good afternoon, everyone, and thank you for joining our call today. A result for the first quarter did not meet our expectations as we faced a more challenging macro environment and softer consumer demand than we anticipated. Despite these top line pressures, we made significant progress on improving our venue level cost structure by removing an annualized $10 million across our system. While these improvements are currently being massed by sales delivery, we are proud to position our brand for improved profitability as the macro environment improves.
Speaker Change: And now I would like to turn the conference over to Pinstrad Spounder, President and CEO, Salesforce.
Pinstrad Spounder: Good afternoon everyone and thank you for joining our call today. A result of the first quarter did not meet our expectations as we faced a more challenging macro environment and softer consumer demand than we anticipated.
Speaker Change: Despite these top line pressures, we made significant progress on improving our venue-level cost structure by removing and annualized $10 million across our system.
Speaker Change: While these improvements are currently being masked by sales, the leverage, we have proud to position our brand for improved profitability as the macro environment improves.
SalesWords: In addition, during the second quarter, we identified $4 million in annualized savings at the corporate level to further ensure that our team is lean and efficient in order to drive long-term growth in both top line sales and corporate EBITDA. I will dive deeper into these initiatives in a moment.
Speaker Change: In addition, during the second quarter, we identified $4 million in annualized savings at the corporate level to further ensure that our team is lean and efficient in order to drive long-term growth in both top-line sales and corporate EBITDA.
SalesWords: But before we do, let me remind you on what said Pinstripes apart from other concepts in the market. While we include bowling and botchy, what truly differentiates our brand is our maid-from-scratch dining. Food and beverage comprise approximately 75% of our total revenue, with bowling botchy comprising the balance. Equally important is our private events, where each of our locations host over a thousand events 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. In addition to our event flywheel, we have also leaned in a local store marketing as well as driving more private event business through tourism and conventions.
Speaker Change: I will dive deeper into these initiatives in a moment. But before we do, let me remind you on what sets pinstrips apart from other concepts in the market.
Speaker Change: While we include bowling and bachi with truly differentiates our brand is our made from scratch dining. Food and beverage comprise approximately 75% of our total revenue with bowling bachi comprising the balance.
Speaker Change: Equally important is our private events where each of our locations host over a thousand events per year representing nearly 50% of our revenue. Our events both social and corporate are an extraordinarily important and profitable facet of our business.
Speaker Change: Creating a flywheel effect of increased brand awareness.
Speaker Change: In addition to our event flywheel, we have also leaned in the local store marketing, as well as driving more private event business through tourism and conventions.
SalesWords: Our local store marketing efforts include initiatives like Kids Club at Pinstripes, where on the first Saturday of the month, guests can enjoy us one hour before brunch for a fun-filled morning of free-kid themed activities. Another example is our paint and sift nights, where guests can enjoy us on select nights to be guided by an art instructor while enjoying a glass of wine and terrific small bites. In terms of tourism and convention, for years we have utilized wedding planners, wedding blogs and wedding vendors as a way to drive increased wedding business. To that end, we are now utilizing a similar playbook to drive increased business from tourism, travel agents, and conventions, especially in tourist-centric cities like our Florida or Washington, D.C.
Speaker Change: Our local storm marketing efforts include initiatives like kids club at 10 stripes around the first Saturday of the month, guests can enjoy us one hour before brunch for a fun filled morning of free kid team activities.
Speaker Change: Another example is our painting Sip Nights, where guests can enjoy boss-ons select Nights to be guided by an art instructor while enjoying a glass of wine and terrific small bites.
Speaker Change: In terms of tourism and conventions, for years we have utilized wedding planners, wedding blogs and wedding vendors as a way to drive increased wedding business.
Speaker Change: To that end, we are now utilizing a similar playbook to drive increased business from tourism, travel agents and conventions, especially in tourist centric cities like Florida or Washington DC location.
SalesWords: locations.
SalesWords: 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 modified company overall. Over the past six months, we've taken an extensive look throughout our company to ensure that we have the resources we need to not only capture the extensive opportunity ahead of us, but also to ensure we are being as efficient as we can be. As stated earlier, our team took a comprehensive look at our venue level cost structure and identified $10 million on an annualized basis that we could remove from our cost structure without negatively impacting the guest experience.
Speaker Change: With respect to profitability, while pinstrives is an established player in the restaurant entertainment space, nationally with the 17-year history, we remain a relatively modern-sized company overall.
Speaker Change: Over the past six months, we've taken an extensive look throughout our company to ensure that we have the resources we need to not only capture the extensive opportunity ahead of us, but also to ensure we are being as efficient as we can be.
Speaker Change: At the end of the year, our team took a comprehensive look at our venue level cost structure and identified $10 million on an annualized basis that we could remove from our cost structure without negatively impacting the guest experience.
SalesWords: These savings range from strategic hourly and salaried labor savings, a more favorable credit card processing agreement, some more intense negotiations with our various vendor partners, leveraging our growing scale and brand. We have substantially implemented all of these cost-saving initiatives by the end of the first quarter, and we expect to achieve the full run-rate benefit of these savings going forward. In addition, during the first quarter, we reviewed our corporate level costs and identified approximately $4 million of additional annual live savings in our SG&A. These costs range from negotiations with agency partners to strategic corporate head count reduction and a renewed focus on marketing efficiency.
Speaker Change: These savings range from strategic hourly and salary labor savings, a more favorable credit card processing agreement, to more intense negotiations with our various vendor partners leveraging our growing scale and brand.
Speaker Change: We have substantially implemented all of these cost saving initiatives by the end of the first quarter and we expect to achieve the full run right benefit of these savings going forward.
Speaker Change: In addition, during the first quarter, we reviewed our corporate level costs and identified approximately $4 million of additional annual live savings and our SQ&A.
Speaker Change: These costs range from negotiations with agency partners to strategic corporate headcount reduction and a renewed focus on marketing efficiency.
SalesWords: Following our reviews of both venue level and corporate level costs, we believe we now have the appropriate cost structure to drive long-term top-line performance through same-store sales growth as well as new unit openings, while ensuring we are maintaining sufficient corporate level profitability. Driven by these cost-efficiency initiatives and general improvements on our business, we currently anticipate achieving adjusted EBITDA profitability in our third quarter on a sustainable basis going forward.
Speaker Change: Following our reviews of both venue level
Speaker Change: and corporate level cars.
Speaker Change: We believe we now have the appropriate cost structure to drive long-term top line performance.
Speaker Change: Through same store sales growth, as well as new unit openings, while ensuring we are maintaining sufficient corporate level profitability.
Speaker Change: Driven by these cost efficiency initiatives and general improvements on our business. We currently anticipate achieving adjusted e-bethop profitability in our third quarter on a sustainable basis going forward.
SalesWords: With respect to new unit development, as we noted last quarter, our development strategy can be categorized into two distinct classifications. First, an established real estate development where we are typically taking over the location of a previous such as Uniglo or Creighton Barrel, and traffic patterns of the area are already well-defined. A second new development where we typically are among the first to open, and the traffic pattern 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 the new developments is typically longer.
Speaker Change: With respect to new units development, as we noted last quarter, our development strategy can be categorized into two distinct classification.
Speaker Change: First, an established real estate development, where we are typically taking over the location of a previous tenant, such as Uniglo, or a great barrel, and traffic patterns of the area are already well-defined.
Speaker Change: A second new development, where we typically are among the first to open and the traffic pattern continues to grow, as additional retail and dining options open around us.
Speaker Change: While the long-term AUV potential of both types of developments are exciting, the maturation curve on the new development is typically longer.
SalesWords: Within the four venues we opened in fiscal 2024, our Topanga and Aventura venues would fall into the new development classification, while our Orlando and Garden State Plaza in New Jersey locations would fall into the established development classification. Before I provide some additional detail, I'm proud to say we saw an almost $2 million improvement across the venue level EBITDA for these new venues relative to the fourth quarter, which, with each and every venue within the group, seeing improvements. Starting with our new development locations in Aventura and Topanga, we continue to expect these units to be in the $7 million AUV range for the year, and the sales trend improvements we are seeing are in line with what we'd expect based on similar units and our mature store base, like our Bethesda, Maryland venue.
Speaker Change: Within the four venues we often in fiscal
Speaker Change: 2024, our Tepanga and Avintura venues would fall into the new development classification while our Orlando and Garden State Plaza in New Jersey locations would fall into the established development classification.
Speaker Change: Before I provide some additional detail, I'm proud to say we saw an almost $2 million improvement across the venue-level EBITDA for these new venues relative to the fourth quarter, which with each and every venue within the group seeing improvements.
Speaker Change: Starting with our new development locations in Aventura and Dupanga, we continue to expect these units to be in the $7 million AUV range for the year.
Speaker Change: And the sales trend improvements we are seeing are in line with what we'd expect based on similar units in our mature store base like our beset de Maryland venue.
SalesWords: Our established development units in Garden State Plaza and Orlando continue to accelerate up their maturation curves, and we still expect them to be approximately $10 million locations in sales for fiscal 2025. During the first quarter, each of these established development units achieve venue level EBITDA profitability for at least one of the periods in the quarter, and we anticipate the improvement trends to continue in the second fiscal quarter of 2025. As with any of our openings, we made substantial investments in the first few months of operation, particularly in labor, to provide a great guest experience from day one.
Speaker Change: Our established development units in Garden State Plaza and Orlando continue to accelerate up their maturation curves, and we still expect them to be approximately $10 million location in sales for fiscal 2025.
Speaker Change: During the first quarter, each of these established development units achieved venue-level e-bot-dop profitability for at least one of the periods in the quarter, and we anticipate the improvement trends to continue in the second fiscal quarter of 2025.
Speaker Change: As with any of our openings, we made substantial investments in the first few months of operation, particularly in labor, to provide a great guest experience from day one.
SalesWords: Ultimately, these upfront investments put these four new locations on strong footing to ensure they can achieve their long-term potential.
Speaker Change: Ultimately, these up front investments put these forward new locations on strong footing to ensure they can achieve their long-term potential.
SalesWords: Within the development pipeline, we currently expect to open two new venues in Walnut Creek, California, and Coral Gable, Florida, late in the second quarter or in the third quarter of fiscal 2025. We look forward to these new venues joining their sister location in the markets of San Mateo and Avancura. As we look further into the development funnel, we have five locations currently under development with Bellevue and Lake Union in Washington and Jacksonville, Florida, joining Walnut Creek and Coral Gable, and another potential 30 sites and various stages of development development. Combined with our current portfolio of 17 open locations, we now have 22 total locations open or underlies, and our pipeline for new locations remains strong.
Operator: Good day ladies and gentlemen, and thank you for standing by. Welcome to the Pinstripes Holdings Inc. First quarter fiscal 2025 earnings conference call. At this time, all participants have been placed in a listen-only mode, and minds will be open for your questions following the presentation. Please note that this conference is being recorded today, September 4, 2024. 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 the respect of guidance for fiscal 2025.
Speaker Change: Within the development pipeline, we currently expect to open two new venues in Walnut Creek, California, and Coral Gable, Florida, late in the second quarter or in the third quarter of fiscal 2025.
Speaker Change: We look forward to these new venues joining their sister location in the markets with San Mateo and Evan Jero.
Speaker Change: As we look further into the development funnel, we have five locations currently under development with Bellevue and Lake Union in Washington and Jacksonville, Florida, joining Walnut Creek and Coral Gable.
Operator: These forward-looking statements and all their statements that are not historical facts and reflect management's beliefs and predictions as of today, and therefore are subject to risks and attorneys as described in the company's quarterly report on form 10K for fiscal 2024 and subsequent SEC filings. Management will also discuss non-gap financial measures as part of today's conference call. These non-gap 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-gap financial measures to the most directly comparable gap measures can be found in the earnings release.
Speaker Change: And another potential 30 sites in various stages of development.
Speaker Change: And by with a current portfolio of 17 open locations, we now have 22 total locations open or underlies. And I've pipeline for new locations remain strong.
SalesWords: Despite the current macro volatility and consumer softness, we continue to believe that our high-quality, connection-oriented dining, entertainment, and event spaces put us in a strong position to drive long-term shareholder value.
Speaker Change: Despite the current macro volatility and consumer softness, we continue to believe that our high quality, connection, oriented, dining, entertainment, and event spaces.
SalesWords: Of course, none of this would be 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.
Speaker Change: But it's in a strong position to drive long-term shareholder value.
Speaker Change: Of course, none of this would be 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 pinstrikes.
Operator: The company has posted its first quarter fiscal 2025 earnings release and an earnings presentation on its website at www.pinstripes.com under the investor relations section.
Tony: With that, let me now turn the call over to our CFO, Tony, to discuss our fiscal first quarter results in greater detail. Thank you, Dale, and good afternoon, everyone. For fiscal first quarter, total revenue increased 19 percent to 30.6 million, compared to 25.7 million in the same quarter last year, including a 16 percent increase in food and beverage revenues and a 30 percent increase in recreation revenues. This increase was driven by four new unit openings, offset by a 2.4 percent decrease in things or sales, and there was no price taken in the quarter. Turning to expenses, costs of food and beverage as a percentage of total revenue increased to 100 basis points, to 17.1 percent.
Speaker Change: With that, let me now turn the call over to our CFO Tony to discuss our fiscal first quarter result in greater detail. Thank you, Dale. And good afternoon, everyone.
SalesWords: And now, I would like to turn the conference over to Pinstripes Spounder, President and CEO, SalesWords.
SalesWords: Good afternoon, everyone, and thank you for joining our call today. A result for the first quarter did not meet our expectations as we faced a more challenging macro environment and softer consumer demand than we anticipated. Despite these top line pressures, we made significant progress on improving our venue level cost structure by removing and annualized $10 million across our system. While these improvements are currently being massed by sales delivery, we are proud to position our brand for improved profitability as the macro environment improves.
Tony: For fiscal 1st quarter, total revenue increased 19 percent to 30.6 million, compared to 25.7 million in the same quarter last year, including a 16 percent increase in food and beverage revenues and 30 percent increase in recreation revenues.
Speaker Change: This increase was driven by four new unit openings, offset by a 2.4% decrease in same source sales and there was no price taken in the quarter.
Speaker Change: Turning to expenses, cost of food and beverages is a percentage of total revenue increased to 100 basis points.
Tony: As a percentage of revenue, the increase in food and beverage costs for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, was primarily due to inefficiencies resulting from an increase in relatively higher cost open play sales from the four new locations open in the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, and modest food cost inflation in seafood and poultry. Labor and benefits as a percentage of total revenue increased 200 basis points to 37.1 percent. The increase in store labor and benefits expenses for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, was primarily due to the addition of four new stores contributing to higher store labor and benefits costs. Excluding the addition of four new stores, store labor and benefits costs were flat.
Speaker Change: 1% as a percentage of revenue, the increase in food and beverage costs for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was primarily due to inefficiencies resulting from an increase in relatively higher cost to open place sales.
SalesWords: In addition, during the second quarter, we identified $4 million in annualized savings at the corporate level to further ensure that our team is lean and efficient in order to drive long-term growth in both top line sales and corporate EBITDA. I will dive deeper into these initiatives in a moment.
Speaker Change: From the four new locations, open in the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, and modest food cost inflation in seafood and poultry.
SalesWords: But before we do, let me remind you on what said Pinstripes apart from other concepts in the market. While we include bowling and botchy, what truly differentiates our brand is our maid from scratch dining. Food and beverage comprise approximately 75% of our total revenue with bowling botchy comprising the balance. Equally important is our private events where each of our locations host over a thousand events per year, representing nearly 50% of our revenue.
Speaker Change: Labor and benefits as a percentage of total revenue increase 200 basis points.
Speaker Change: to 37.1%. The increase in stored labor and benefits expenses for the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was primarily due to the addition of four new stores contributing to higher stored labor at benefits costs.
Speaker Change: Excluding the addition of four new stores, store labor, and benefits costs were flat. Occupancy costs is a percentage of total revenue, we're 21.4%.
Tony: Occupancy costs as a percentage of total revenue were 21.4 percent. Other operating expenses as a percentage of total revenue increased 60 basis points, with 17.8 percent. Menu level EBITDA as a percentage of total revenue decreased to 7.2 percent, driven by negative store contribution of our four new locations that opened the fiscal 2024. As these stores continue to progress through the maturation curve, with the profitability of this group continuing to improve. As Dale previously mentioned, all four venues within this group saw substantial improvement in venue level EBITDA sequentially from the fourth quarter to the first quarter.
SalesWords: Our events, both social and corporate, are an extraordinarily important and profitable facet of our business, creating a flywheel effect of increased brand awareness. In addition to our event flywheel, we have also leaned in a local store marketing as well as driving more private event business through tourism and conventions. Our local store marketing efforts include initiatives like Kids Club at Pinstripes, where on the first Saturday of the month, guests can enjoy us one hour before brunch for a fun-filled morning of free-kid themed activities.
Speaker Change: Other operating expenses as a percentage of total revenue increase 60 basis points to 17.8%.
Speaker Change: Then you'll ever leave it to us, a percentage of total revenue.
Speaker Change: Decreased to 7.2% driven by negative store contribution of our four new locations that opened the fiscal 2024. As these stories continue to progress through the maturation curve, with the profitability of this group continuing to improve.
Speaker Change: As Dale previously mentioned, all four venues have been this curved, soft substantial improvement, and then you level EBITDAF sequentially from the fourth quarter to the first quarter. Please refer to our earnings release for a reconciliation of non-gapmeters.
Tony: Please refer to our earnings release for a reconciliation of non-GAAP measures. Our mature stores, those open more than 24 months, generated average contribution margins of 12.6 percent, representing a 240 basis point decline year over year driven primarily by sales developers. General and administrative expenses increased to 5.5 million compared to 3.5 million in the same period last year. Turning to liquidity, as of July 21st, 2024, we have 5 million in cash and cash equivalents, and 113 million of that outstanding. Subsequently, to the end of the quarter, continually address our long-term capital needs. We secured 5 million in additional financing from our current lenders, and in conjunction with this financing, Oak Tree upsides our potential future funding facility by 10 billion.
SalesWords: Another example is our paint and sift nights, where guests can enjoy us on select nights to be guided by an art instructor while enjoying a glass of wine and terrific small bites. In terms of tourism and convention, for years we have utilized wetting planners, wetting blogs and wetting vendors as a way to drive increased wetting business. To that end, we are now utilizing a similar playbook to drive increased business from tourism, travel agents and conventions, especially in tourist-centric cities like our Florida or Washington, D.C, locations.
Speaker Change: Our mature source, those open more than 24 months, generated average contribution margins of 12.6%. Representing a 240 basis point decline near over year driven primarily by sales delivered.
Speaker Change: General Administrative expenses increased to 5.5 million compared to 3.5 million in the same period last year.
Speaker Change: Turning to liquidity, as of July 21, 2024, we have 5 million in cash and cash equivalence and 113-year-old unit that outstanding.
Speaker Change: Subsequent to the end of the quarter.
Speaker Change: Continually address our long-term capital needs. We secured five million in additional financing from our current lenders. And a conjunction with this financing, O tree upsides our potential future funding facility by 10 billion.
SalesWords: 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 modified company overall. Over the past six months, we've taken an extensive look throughout our company to ensure that we have the resources we need to not only capture the extensive opportunity ahead of us, but also to ensure we are being as efficient as we can be. As stated earlier, our team took a comprehensive look at our venue level cost structure and identified $10 million on an annualized basis that we could remove from our cost structure without negatively impacting the guest experience.
Tony: With that, let me now provide you with some updates to our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27th, 2025, with a 16-week fourth quarter. Same for sales growth of negative low-single digits to positive low-single digits, and a reminder that our subpoena location will enter our Comface in Q3 and have intural enter in Q4. Two new venues, mature store venue-level EBITDA margin of 17-20%. General and administrative expenses of 15 million, including 2.5 million of non-cash stock-based compensation of tax. Note that approximately 50% of the benefits of our recent cost-out actions will impact fiscal 2025, with 100% being reflected in fiscal 2026.
Speaker Change: With that, let me now provide you with some updates to our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27, 2025, with a 16 week report.
Speaker Change: Same for sales growth of negative low single digits, the positive low single digits, and a reminder that our dependable location will enter our comp base in Q3, an adventurer will enter in Q4.
Speaker Change: 2 new venues, mature store venue level EBITDA, March of 17 to 20%.
Speaker Change: General and Administrative expenses of 15 million, including two and a half million of non-cash stock-based compensation attacks.
SalesWords: These savings range from strategic hourly and salaried labor savings, a more favorable credit card processing agreement, some more intense negotiations with our various vendor partners leveraging our growing scale and brand. We have substantially implemented all of these cost-saving initiatives by the end of the first quarter, and we expect to achieve the full-run rate benefit of these savings going forward. In addition, during the first quarter, we reviewed our corporate level costs and identified approximately $4 million of additional annual live savings in our SG&A.
Speaker Change: Note that approximately 50% of the benefits of our recent cost out actions will impact fiscal 2025 with a 100% being reflected in fiscal 2026.
Tony: Pre-opening of approximately 3 million, and adjusted EBITDA of 8 to 12 million.
Speaker Change: pre-opening of approximately 3 million and adjust the diva of 8 to 12 million.
Operator: We'd like to thank you again for your interest in Pinstripes.
Operator: Dale and I are now happy to answer any questions that you may have. Operator, please open the line for questions. Thank you.
Dale: We'd like to thank you again for your interest in pin strikes. Dale and I are now happy to answer any questions that you may have. Operator, please open a line for questions.
Operator: Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad and a confirmation total indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
SalesWords: These costs range from negotiations with agency partners to strategic corporate head count reduction and a renewed focus on marketing efficiency. Following our reviews of both venue level and corporate level costs, we believe we now have the appropriate cost structure to drive long-term top-line performance through same-store sales growth as well as new unit openings, while ensuring we are maintaining sufficient corporate level profitability. Driven by these cost-efficiency initiatives and general improvements on our business, we currently anticipate achieving adjusted EBITDA profitability in our third quarter on a sustainable basis going forward.
Speaker Change: For participants using speaker equipment, they may be necessary to pick up your handset before pressing the star keys.
Brian Dittner: And our first question comes from the line of Brian Dittner with Oppenheimer and Company. Please proceed. Hey, good afternoon. I just want to ask further about the updated financial guidance for fiscal 25. Whether we're looking at EBITDA or venue level margins, you are assuming a dramatic hockey stick-like move in both of those for the rest of the year. I obviously listen to your comments. I understand you anticipate new store profitability to improve. I understand the cost savings measures, but it seems like there's a lot more map on top of those, like your mature stores. You're assuming a major shift in the margin trend from what we just saw to what's going to happen the rest of the year.
Speaker Change: And our first question comes from the line of Brian Dittner with Oppenheimer in Company. Please proceed.
Brian Dittner: Hey, good afternoon.
Brian Dittner: I just want to ask further about the updated financial guidance for fiscal 25. Whether we're looking at EBITDA or venue level margins, you are assuming a...
Speaker Change: Traumatic, hockey stick like move in both of those for the rest of the year. I obviously listen to your comments and understand you anticipate new store profitability to improve. I understand the cost savings measures.
SalesWords: With respect to new unit development, as we noted last quarter, our development strategy can be categorized into two distinct classifications. First, an established real estate development where we are typically taking over the location of a previous such as Uniglo or Creighton Barrel and traffic patterns of the area are already well-defined. A second new development where we typically are among the first to open and the traffic pattern continues to grow as additional retail and dining options open around us.
Speaker Change: But it seems like there's a lot more math on top of those, like your mature stores, you're assuming a major shift in the margin trend from what we just saw to what's going to happen the rest of the year.
Brian Dittner: So can you just help us get some confidence at next quarter? We're not going to see another change in the outlook. What gives you confidence that these numbers are achievable.
Speaker Change: So, can you just help us get some confidence at next quarter? We're not going to see another change in the outlook. What gives you confidence at these numbers are achievable?
SalesWords: So a couple things, Brian and Tony. First, if you look at our business, we're certainly not a linear business. Q3 is very important given the mix of events and really the busy holiday season, and given the degree of operating leverage in the business, it's a big deal. Q3, even on the cost saving side, particularly at the venue level, a lot of it's going to come through in Q3 because it is variable in nature. Secondly, I'd say to the first four weeks of the second quarter, we are seeing the expanded margins just on preliminary results. results.
Speaker Change: So, a couple things, Brian, that's Tony. First, you know, if you look at our business, we're certainly not a linear business, right? So, two, three is very important, given the mix of events, and really the busy holiday season, and, you know, given the degree of operating leverage in the business.
SalesWords: While the long-term AUV potential of both types of developments are exciting, the maturation curve on the new developments is typically longer. Within the four venues we opened in fiscal 2024, our Topanga and Aventura venues would fall into the new development classification while our Orlando and Garden State Plaza in New Jersey locations would fall into the established development classification. Before I provide some additional detail, I'm proud to say we saw an almost $2 million improvement across the venue level EBITDA for these new venues relative to the fourth quarter, which with each and every venue within the group seeing improvements.
Speaker Change: It's a big deal, right? So Q3, you know, even on the cross-saving side, particularly at the venue level, a lot of it's going to come through in Q3, because it is variable in nature.
Speaker Change: Secondly, I'd say to the first four weeks of the second quarter, we are seeing the expanded margins just on preliminary results.
SalesWords: And that's in the face of softer open play sales in particular, but we're still seeing the margin expansion coming through. So, those two data points, I think, in kind of context, and it should help you get some confidence around the ramp and margins through the rest of the year to get to our updated guidance.
Speaker Change: So, you know, an Athens in the face of...
Speaker Change: software or open play sales in particular. But we're still seeing the margin expansion coming through. So, you know, those two data points, I think, in kind of context, I think should help you get some confidence around the ramp in margins.
Brian Dittner: Thanks for that.
SalesWords: And just second question and final question on the unit growth. You're going to open two units this year versus four previously. Is that a signal of any change in near-term unit growth outlook over the next year or two? I know that you're still working on 30 sites, and I know the pipeline is strong, but just trying to get a sense of how you're thinking about more near-term unit growth opportunities, both this year and next. Yeah, look, so, you know, along the creek, Coral Gables, you know, are the two units that are well on track to open in the fiscal year.
SalesWords: Starting with our new development locations in Aventura and Topanga, we continue to expect these units to be in the $7 million AUV range for the year, and the sales trend improvements we are seeing are in line with what we'd expect based on similar units and our mature store base like our Bethesda Maryland venue. Our established development units in Garden State Plaza and Orlando continue to accelerate up their maturation curves, and we still expect them to be approximately $10 million locations in sales for fiscal 2025.
Speaker Change: through the rest of the year to get to our updated guidance.
Speaker Change: Thanks for that, and just second question and final question on the Unic Growth.
Speaker Change: You're going to open two units this year versus four previously. Is that a signal of any change in near-term unit growth outlook over the next year or two? I know that you're still working on 30 sites and I know the pipeline is strong.
Speaker Change: But just trying to get a sense of how you're thinking about more near-return unit growth opportunities, both this year and next.
Speaker Change: Yeah, look, so, you know, Walnut Creek Coral Gables, you know, are the two units that are well on track to open in the fiscal year, you know, our Seattle sites continue to make progress.
SalesWords: During the first quarter, each of these established development units achieve venue level EBITDA profitability for at least one of the periods in the quarter, and we anticipate the improvement trends to continue in the second fiscal quarter of 2025. As with any of our openings, we made substantial investments in the first few months of operation, particularly in labor, to provide a great guest experience from day one. Ultimately, these upfront investments put these four new locations on strong footing to ensure they can achieve their long-term potential.
SalesWords: You know, our Seattle sites continue to make progress; you know, haven't gone away. And, you know, we, and Jacksonville, you know, we just took possession of site very recently. So, everything's on track. It's just pushing a little bit to the right. And our long-term, you know, six-day unit outlook, while it may vary up and down, you know, it's still intact.
Speaker Change: You know, I haven't gone away and, you know, we, in Jacksonville, you know, we, we just, we just took possession of sight very recently.
Speaker Change: So, everything's on track. It's just pushing a little bit to the right, and our long-term, you know, 68 unit outlook while it may vary up and down, you know, it's still intact.
SalesWords: Okay, thank you.
Brian Dittner: Thanks, Brian.
Speaker Change: Okay, thank you.
Peter Salah: And the next question comes from the line of Peter Salah with BTIG; please proceed. Great. Thanks for taking the question. I didn't want to come back to the conversation on unit development. Can you just give us a little bit more color on the timing of Walnut Creek and Coral Gables? I mean, we had anticipated September or October of this year. What are you guys thinking now in terms of the timing of those openings?
Speaker Change: And the next question comes from the line of Peter Sala with D.T.I.G. Please proceed.
SalesWords: Within the development pipeline, we currently expect to open two new venues in Walnut Creek, California, and Coral Gable, Florida, late in the second quarter, or in the third quarter of fiscal 2025. We look forward to these new venues joining their sister location in the markets of San Mateo and Avancura. As we look further into the development funnel, we have five locations currently under development with Bellevue and Lake Union in Washington and Jacksonville, Florida, joining Walnut Creek and Coral Gable, and another potential 30 sites and various stages of development development. Combined with our current portfolio of 17 open locations, we now have 22 total locations open or underlies, and our pipeline for new locations remains strong.
Peter Sala: Great thanks for taking the question. I didn't want to come back to the conversation on the unit development.
Peter Sala: Can you just give us a little bit more color on the timing of Walnut Creek and Coral Gables? I mean, we had anticipated September or October of this year. What are you guys thinking now in terms of the timing of those openings?
SalesWords: Peter, it's Dale. Walnut Creek, we're anticipating October rather imminently; just the nature of just somewhat standard final permits from cities. Coral Gables, roughly November-ish, much the same, but both some permitting as well as completing construction while amongst a mixed-use project with a hotel above us, etc. And Tony pointed out a few of the additional sites next year. We'll layer in the second half of the calendar year.
Speaker Change: The Peter's Dale
Speaker Change: Uh, Walnut Creek.
Speaker Change: We're anticipating October
Speaker Change: Rep. Rather imminently, just the nature of just some of standard final permits from cities, corrogables.
Speaker Change: Roughly Novemberish, much to same, but both from permitting as well as completing construction while amongst a mixed-use project that the hotel above us, et cetera.
SalesWords: Despite the current macro volatility and consumer softness, we continue to believe that our high-quality connection oriented dining entertainment and event spaces put us in a strong position to drive long-term shareholder value. Of course, none of this would be 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.
Speaker Change: And it's Tony pointed out a few of the additional sites next year, we'll lay her in second half of the calendar year.
Peter Salah: Great.
Peter Salah: And then just on the same store sales, you know, I think when we last spoke, you guys had exited April. It looked like April was a really strong month. And here we are, you know, down to four in terms of same store sales. Can you just give us some color around how the quarter progressed and, you know, the breakout between, you know, a check price called mix and traffic? I was under the impression you guys were going to take about 200 beast points of price in the month of July. So just try to understand how that all.
Speaker Change: Great and then just on the same for sales, I think when we last spoke, you guys had exited April, it looked like April was a really strong month.
Speaker Change: um
Speaker Change: And here we are, you know, down two, four in terms of the same store sales. Can you just give us some color around?
Speaker Change: How the quarter progressed and, you know, the break-out between
Tony: With that, let me now turn the call over to our CFO Tony to discuss our fiscal first quarter results in greater detail.
Speaker Change: You know, check price, called mix and traffic. I wasn't really impression you guys want to take about 200-based points of price in the month of July, so just try and understand how that all shakes out.
Tony: Thank you, Dale, and good afternoon, everyone. For fiscal first quarter, total revenue increased 19 percent to 30.6 million, compared to 25.7 million in the same quarter last year, including a 16 percent increase in food and beverage revenues and 30 percent increase in recreation revenues. This increase was driven by four new unit openings, offset by a 2.4 percent decrease in things or sales, and there was no price taken in the quarter. Turning to expenses costs of food and beverage as a percentage of total revenue increased to 100 basis points, the 17.1 percent.
SalesWords: Yeah, in terms of how we paced, you know, May was down about 1%, June really hit us hard, almost down 6%, and then July flattened out. So how we sort of paced in terms of breakdown, you know, we do indicate price. Price went into effect in the beginning of the second quarter, about 2%, which is I think what you just said. And, you know, the balance, we just say is volume or traffic, so we don't we don't break out check at this time. Got it understood.
Speaker Change: Yeah, in terms of how we paced, you know, May was down about 1% June really had us hard almost down 6% and then July flatten out.
Speaker Change: So, I thought we sort of paced in terms of breakdown, you know, we do indicate price. When into effect at the beginning of the second quarter, it's about 2%.
Speaker Change: Which is, I think what you just said, and, you know, the balance we, we just say is volume or traffic, so we don't, we don't break out check at this time.
Tony: As a percentage of revenue, the increase in food and beverage costs for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, was primarily due to inefficiencies resulting from an increase in relatively higher cost open play sales from the four new locations open in the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, and modest food cost inflation in seafood and poultry. Labor and benefits as a percentage of total revenue increased 200 basis points to 37.1 percent.
Peter Salah: Okay, I'll pass it along. Thank you very much.
Speaker Change: I got it understood okay I'll pass it along. Thank you very much.
Sharon Zach: I mean, the next question comes from a line of Sharon, Zach, with William Blair. Please proceed. Yeah, thanks for taking the question. I guess just to follow up on the cadence through the quarter, so you haven't been public that long, is it pretty unusual to have kind of an outlier like June or is the business. Kind of more susceptible to, I guess, some more volatility and it's recorder trends. I don't know what kind happened in June, if it was a weather dynamic or anything else that you can really attribute it to, because it looks like May and July were relatively similar.
Speaker Change: In the next question, comes from the line of Sharon Zaccia with William Blair, please proceed.
Sharon Zaccia: Hi, thanks for taking the question. I guess just to follow up on the cadence through the quarter, so that you haven't been public that long. Is it pretty unusual to have kind of an outlier like June or is the business...
Tony: The increase in store labor and benefits expenses for the first quarter of fiscal 2025, compared to the first quarter of fiscal 2024, was primarily due to the addition of four new stores contributing to higher store labor and benefits costs, excluding the addition of four new stores, store labor and benefits costs were flat. Occupancy costs as a percentage of total revenue were 21.4 percent. Other operating expenses as a percentage of total revenue increased 60 basis points with 17.8 percent.
Speaker Change: kind of more susceptible to, I guess.
Speaker Change: It's a more volatility and it's recorded trends. I don't know what kind of happened in June if it was a weather dynamic or anything else that you can really attribute it to because it looks like May and July were relatively similar.
SalesWords: Yeah, Sharon, there's a couple of things. One is we had some, you know, we don't have a lot of units, so all it takes is a couple of kind of events to shift things. So on open play, you know, we saw some weather dynamics kind of her patio business and a few ways. And then events can cause volatility, so we did see some corporate events shift to the right. Okay, you know, as an example, though, you know, in the first four weeks of the second quarter, event bookings, which don't necessarily actualize immediately, of course, we're up 5.6% versus prior year.
Speaker Change: Yes, Sharon, yeah, there's a couple things. One is
Speaker Change: We had some, you know, we don't have a lot of units, so all it takes is a couple of kind of a men's to shift things. Don't open play, you know, we saw some leather dynamics kind of hurt our patio business.
Tony: Menu level EBITDA as a percentage of total revenue decreased to 7.2 percent, driven by negative store contribution of our four new locations that opened the fiscal 2024. As these stores continue to progress through the maturation curve, with the profitability of this group continuing to improve. As Dale previously mentioned, all four venues within this group saw substantial improvement in venue level EBITDA sequentially from the fourth quarter to the first quarter.
Speaker Change: And a few ways. And then events can cause volatility. So we did see some corporate events shift to the right.
Speaker Change: As an example, though, in the first four weeks of the second quarter, event bookings, which don't necessarily actualize immediately, of course, we're up 5.6%.
SalesWords: So we're seeing a little bit of shifting around of events, but, and that can cause volatility. But, you know, overall the events business is still looking pretty good. Okay, and then this kind of June, would you have just characterized that as an outlier? I mean, was August kind of more similar to May and July? August was a little bit like June.
Tony: Please refer to our earnings release for a reconciliation of non-gap measures. Our mature stores, those open more than 24 months, generated average contribution margins of 12.6 percent, representing a 240 basis point decline near over year driven primarily by sales developers. General and administrative expenses increased to 5.5 million compared to 3.5 million in the same period last year. Turning to liquidity, as of July 21st, 2024, we have 5 million in cash and cash equivalence, and 113 million of that outstanding.
Speaker Change: versus prior year. So we're seeing a little bit of shifting around of events, but
Speaker Change: And that can cause volatility, but overall the event's business is still looking pretty good.
Speaker Change: Okay, and then this kind of tune, would you just characterize that as an outlier? I mean, was August kind of more similar to May and July.
Speaker Change: I guess it was a little bit like June.
Sharon Zach: Okay, how do I think about kind of the magnitude of the profit revision? Because there are so many moving parts going on, and you know, it's two months since you gave that initial profit guidance. And we're kind of cutting it in half. So the comp got changed a little bit, but not a lot. Obviously, you're maybe losing a few units, which impacts the leverage you get there. So if you could help kind of triangulate all the puts and takes on the profit guide. Sure. So if you look at just the midpoints where we went, it's about $10 million net.
Speaker Change: OK.
Speaker Change: How do I think about kind of the magnitude of the profit revision? Because there are so many moving parts going on, and it's a few months as you gave that initial profit guidance.
Tony: Subsequently, to the end of the quarter, continually address our long-term capital needs. We secured 5 million in additional financing from our current lenders, and in conjunction with this financing, oak tree upsides our potential future funding facility by 10 billion.
Speaker Change: And we're kind of cutting it in half. So the comp gun changed a little bit, but not a lot. Obviously, you may be losing a few units, which impacts the leverage you get there. So if you can help kind of triangulate all the putton takes and the profit guide.
Tony: With that, let me now provide you with some updates to our fiscal year 2025 guidance. As a reminder, our fiscal year ends on April 27th, 2025, with a 16-week-fourth quarter. Same for sales growth of negative low-single digits to positive low-single digits, and a reminder that our subpoena location will enter our Comface in Q3 and have intural enter in Q4. Two new venues, mature store venue-level EBITDA margin of 17-20%. General and administrative expenses of 15 million, including 2.5 million of non-cash stock-based compensation of tax. Note that approximately 50% of the benefits of our recent cost-out actions will impact fiscal 2025, with 100% being reflected in fiscal 2026. Pre-opening of approximately 3 million, and adjusted EBITDA of 8 to 12 million.
Speaker Change: Sure. So if you look at just the midpoints where we went, it's about $10 million net. So $5 million is a combination of sales, delivery, and a few cost misses that we've.
SalesWords: So $5 million is a combination of sales, delivery, and a few cost misses that we've addressed, but obviously already had a quarter of those $7 million and say a new store drag. You know, just not being at the profitability level when we set the initial guidance. And then that's offset by the $2 million of additional energy to take out that we just announced.
Speaker Change: address, but obviously, I already had a quarter of those, $7,000,000, I'm saying, a new store drag, you know, just just.
Speaker Change: Not being at the profitability level when we set the initial guidance. And then that's offset by the $2 million additional SGA takeout that we just announced.
Sharon Zach: And then I guess last question for me, there's been kind of two schools of thought on kind of what's going on and kind of the more experiential dining category. One is that competition's ratcheting up. So it's just tougher. The other is that, you know, maybe the segments kind of waiting. I guess when you look at, you know, obviously softer than expected quarter than you would have expected. Do you think either of those arguments have any kind of validity? Yeah, sharing a scale. I think for us, in a lot of our peers, as you know, we're mostly up against some very sizable thanks to our sales increases from a year prior.
Speaker Change: And then, I guess last question for me, there's those in kind of two schools of five.
Speaker Change: I'm kind of what's going on and kind of the more experiential dining category. One is that, competitions, ratcheting up, such as tougher. The other is that, you know, maybe the segments kind of waning.
Operator: We'd like to thank you again for your interest in Pinstripes.
Operator: Dale and I are now happy to answer any questions that you may have. Operator, please open the line for questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: I guess when you look at, you know, obviously it's softer than expected quarter than you would have expected, or do you think either of those arguments have any kind of validity?
Sharon Estale: I'm Sharon Estale.
Speaker Change: I think for us and a lot of our peers, as you know, we're mostly up against the very sizable banks to ourselves and creases from a year prior.
SalesWords: So some of that call it revenge spend, or some of the excitement post-COVID, we're all up against that. Of course, our performance has been considerably better than a lot of our peers that have seen more, as you know, double-digit negative sales tops. So no, I don't think it's a competitive issue per se, and I don't think it's an overall waning of the category. I think it's just lapping tops mostly that. Thank you.
Speaker Change: So
Speaker Change: Some of that call it revenge band or some of the...
Brian Dittner: And our first question comes from the line of Brian Dittner with Oppenheimer and Company. Please proceed. Hey, good afternoon.
Speaker Change: Excitement post-COVID, we're all up against that. Of course, our performance has been considerably better than a lot of our peers that have seen more.
SalesWords: I just want to ask further about the updated financial guidance for fiscal 25. Whether we're looking at EBITDA or venue level margins, you are assuming a dramatic hockey stick-like move in both of those for the rest of the year. I obviously listen to your comments. I understand you anticipate new store profitability to improve. I understand the cost savings measures, but it seems like there's a lot more map on top of those, like your mature stores.
Speaker Change: Because you know, double digit negative sales top.
Speaker Change: No, I don't think it's a competitive issue per se and I don't think it's an overall waning of the category. I think it's just lapping tops.
Speaker Change: Mostly that.
Operator: Ladies and gentlemen, we have reached the end of today's question-and-answer session.
SalesWords: I like to turn the call back over to Dills Worse for closing remarks. I want to thank everybody again for joining us this afternoon. We're looking forward to opening our next two locations rather soon, and we welcome you all again to enjoy any of our locations and have fun with the magic that we deliver. Thank you.
Speaker Change: Ladies and gentlemen, we have reached the end of today's question in the answer session. I like to turn the call back over to Dale Schwartz for closing remarks.
SalesWords: You're assuming a major shift in the margin trend from what we just saw to what's going to happen the rest of the year. So can you just help us get some confidence at next quarter? We're not going to see another change in the outlook. What gives you confidence that these numbers are achievable.
Dale Schwartz: I want to thank everybody again for joining us this afternoon, we're looking forward to opening our next two locations rather soon and we welcome you all again to enjoy any of our locations and have fun with the magic that we deliver. Thank you.
SalesWords: So a couple things, Brian and Tony. First, if you look at our business, we're certainly not a linear business. Q3 is very important given the mix of events and really the busy holiday season and given the degree of operating leverage in the business, it's a big deal.
Operator: This concludes today's conference. You may disconnect your lines of this time. Thank you for your participation.
Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
SalesWords: I think we'll come back on. I'm glad that's for you.
SalesWords: Q3, even on the cost saving side, particularly at the venue level, a lot of it's going to come through in Q3 because it is variable in nature. Secondly, I'd say to the first four weeks of the second quarter, we are seeing the expanded margins just on preliminary results, results. And that's in the face of softer open play sales in particular, but we're still seeing the margin expansion coming through. So, those two data points I think in kind of context, and it should help you get some confidence around the ramp and margins through the rest of the year to get to our updated guidance. Thanks for that.
SalesWords: And just second question and final question on the unit growth. You're going to open two units this year versus four previously.
SalesWords: Is that a signal of any change in near-term unit growth outlook over the next year or two? I know that you're still working on 30 sites and I know the pipeline is strong, but just trying to get a sense of how you're thinking about more near-term unit growth opportunities, both this year and next. Yeah, look, so, you know, along the creek, coral gables, you know, are the two units that are well on track to open in the fiscal year.
SalesWords: You know, our Seattle sites continue to make progress, you know, haven't gone away. And, you know, we, and Jacksonville, you know, we just took possession of site very recently. So, everything's on track. It's just pushing a little bit to the right. And our long-term, you know, six-day unit outlook, while it may vary up and down, you know, it's still intact.
SalesWords: Okay, thank you.
SalesWords: Thanks, Brian.
Peter Salah: And the next question comes from the line of Peter Salah with BTIG, please proceed. Great. Thanks for taking the question. I didn't want to come back to the conversation on unit development. Can you just give us a little bit more color on the timing of Walnut Creek and coral gables? I mean, we had anticipated September or October of this year. What are you guys thinking now in terms of the timing of those openings?
SalesWords: Peter, it's Dale. Walnut Creek, we're anticipating October rather imminently just the nature of just somewhat standard final permits from cities, coral gables, roughly November-ish, much the same, but both some permitting as well as completing construction while amongst a mixed-use project with a hotel above us, etc. And Tony pointed out a few of the additional sites next year. We'll layer in second half of the calendar year. Great. And then just on the same store sales, you know, I think when we last spoke, you know, you guys had exited April.
SalesWords: It looked like April was a really strong month. And here we are, you know, down to four in terms of same store sales. Can you just give us some color around how the quarter progressed and, you know, the breakout between, you know, a check price called mix and traffic? I was under the impression you guys were going to take about 200 beast points of price in the month of July. So just try to understand how that all.
SalesWords: Yeah, in terms of how we paced, you know, May was down about 1%, June really hit us hard almost down 6% and then July flattened out. So how we sort of paced in terms of breakdown, you know, we we do indicate price price went into effect in the beginning of the second quarter, about 2%, which is I think what you just said. And, you know, the balance, we just say is volume or traffic, so we don't we don't break out check at this time. Got it understood. Okay, I'll pass it along.
SalesWords: Thank you very much.
Sharon Zach: I mean, next question comes from a line of Sharon, Zach, with William Blair, please proceed. Yeah, thanks for taking the question. I guess just to follow up on on the cadence through the quarter, so you haven't been public that long, is it pretty unusual to have kind of an outlier like June or is the business. Kind of more susceptible to, I guess, some more volatility and it's recorder trends. I don't know what kind of happened in June if it was a weather dynamic or anything else that you can really attribute it to because it looks like May and July were relatively similar.
Sharon Zach: Yeah, Sharon, there's a couple things. One is we had some, you know, we don't have a lot of units, so all it takes is a couple of kind of events to shift things. So on open play, you know, we saw some weather dynamics kind of her patio business and a few ways. And then events can cause volatility, so we did see some corporate events shift to the right. Okay, you know, as an example, though, though, you know, in the first four weeks of the second quarter event bookings, which don't necessarily actualize immediately, of course, we're up 5.6% versus prior year.
Sharon Zach: So we're seeing a little bit of shifting around of events, but and that can cause volatility, but you know, overall the events businesses is still looking pretty good. Okay, and then this kind of June, would you have just characterized that as an outlier? I mean, was August kind of more similar to May and July? August was a little bit like June. Okay, how do I think about kind of the magnitude of the profit revision?
Sharon Zach: Because there are so many moving parts going on and, you know, it's two months since you gave that initial profit guidance. And we're kind of cutting it in half. So the comp got changed a little bit, but not a lot. Obviously, you're maybe losing a few units, which impacts the leverage you get there. So if you could help kind of triangulate all the puts and takes on the profit guide. Sure. So if you look at just the midpoints where we went, it's about $10 million net.
Sharon Zach: So $5 million is a combination of sales, delivery, and a few cost misses that we've addressed, but, but obviously already had a quarter of those $7 million and say a new store drag. You know, just just not being at the profitability level when we set the initial guidance. And then that's offset by the $2 million of additional energy to take out that we just announced.
SalesWords: And then I guess last question for me, there's there's been kind of two schools of thought on kind of what's what's going on and kind of the more experiential dining category one is that competitions ratcheting up. So it's just tougher. The other is that, you know, maybe the segments kind of waiting. I guess when you look at, you know, obviously softer than expected quarter than you would have expected. Do you think either of those arguments have any kind of validity?
SalesWords: Yeah, sharing a scale. I think for us in a lot of our peers, as you know, we're mostly up against some very sizable thanks to our sales increases from a year prior. So some of that call it revenge spend or some of the excitement post COVID, we're all up against that. Of course, our performance has been considerably better than a lot of our peers that have seen more as you know, double digit negative sales tops. So no, I don't think it's a competitive issue per se, and I don't think it's an overall waning of the category.
SalesWords: I think it's just lapping tops mostly that.
SalesWords: Thank you.
Operator: Ladies and gentlemen, we have reached the end of today's question and answer session.
SalesWords: I like to turn the call back over to Dills worse for closing remarks. I want to thank everybody again for joining us this afternoon. We're looking forward to opening our next two locations rather soon, and we welcome you all again to enjoy any of our locations and have fun with the magic that we deliver.
Operator: Thank you. This concludes today's conference. You may disconnect your lines of this time.
Operator: Thank you for your participation. I think we'll come back on. I'm glad that's for you.