When you are the world’s largest bowling alley operator, and fresh off a rebranding from just over two months ago, Lucky Strike Entertainment (LUCK), formerly Bowlero, has worked to keep itself at the top of the heap. To that end, it has brought out some interesting new offerings to keep customers coming back and paying good money to throw heavy plastic balls down a polished lane at several pins. Investors are concerned, though, and shares are down nearly 4% in Wednesday afternoon’s trading.
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Lucky Strike is rolling out several new features to keep interest, a vital point in a time when people are pinching pennies to be able to afford eggs for breakfast, among many other bills that did not go down just because President Trump has been in office for just over a month. New technology offerings are speeding up ordering processes to allow people to enjoy french fries and cocktails quickly, and new food choices like “crispy shrimp bao buns” are putting a new sparkle on things.
Yet, amazingly, Lucky Strike is rolling all of this out at a time when it is scouring its books looking for budget cuts. Lucky Strike discovered that cutting back on air conditioning overnight has saved “tens of millions of dollars” but not damaged the customer experience a whit. By the end of its fiscal year, this summer, Lucky Strike hopes to pare about $40 million from capital expenditures spending, while also spending $50 million in upgrades.
Baseline Positive
That may sound like an odd play, but reports suggest that Lucky Strike’s operations are doing better than some might think. In fact, reports note, food and drinks alone account for 37% of Lucky Strike revenue. Those new crispy shrimp bao buns might be able to pick things up still further, offering “premium options” in a place that is not exactly known for them.
We also know that Lucky Strike recently picked up the Raging Waves waterpark, a move that might see more Lucky Strike locations come to these places. Lucky Strike likely knows the limits under which it labors, and is working to roll out more options accordingly to capture what it can from a discretionary market that is a bit under fire right now.
Is Lucky Strike Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LUCK stock based on nine Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 12.30% loss in its share price over the past year, the average LUCK price target of $16.72 per share implies 51.31% upside potential.
