Shares of Bowlero (BOWL 1.28%), the bowling alley chain and parent of AMF, Lucky Strike, and Bowl America, were moving higher today after the company offered strong guidance in its fiscal first-quarter earnings report.
As a result, the stock was up 12.9% as of 2:16 p.m. ET.
Image source: Getty Images.
Bowlero's good enough earnings
Overall revenue was down 1.2% to $227.4 million, which missed the consensus at $229.9 million, and the company said that same-store revenue fell 5.5% due in part to the company's testing promotions and bundled pricing structures during its seasonally slowest time of year.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell from $65.3 million to $52.1 million, giving it a margin of 22.9%. The company continued to expand, adding 18 bowling centers in the quarter, 17 of which came from acquisitions, including 14 from its Lucky Strike transaction. That brought its grand total to 350.
The company also entered into a sale-leaseback transaction with Vici Properties, selling 38 properties for $432.9 million.
Noting momentum building in the current quarter, CEO Thomas Shannon said: "Same-store revenue turned positive in mid-October. We are happy with those results and continue to push forward with our plan to ensure double-digit revenue growth this year."
Momentum is picking up
Management now expects revenue to grow 10% to 15% for the full year to between $1.14 billion and $1.19 billion, and it forecast an adjusted EBITDA margin of 32% to 34%, or EBITDA of $365 million to $405 million, which seemed to please investors.
In addition to the solid guidance, the company seemed to benefit from low expectations as the stock was trading near 52-week lows before the report, and its short interest is especially high at 69%.
As the company executes its roll-up strategy in bowling, the stock is worth watching. It looks well priced based on its expected EBITDA this year.
