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Lucky Strike Entertainment (LUCK)
NYSE:LUCK
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Lucky Strike Entertainment
(NYSE:LUCK)
49Neutral
Positive Factors
Market Position and Growth Strategy
LUCK remains a leader in a highly fragmented market with potential for long-term upside due to a favorable M&A backdrop.
New Center Openings
LUCK opened four new centers during the quarter, and these centers are off to a strong start, with both California locations generating over $1M of revenue in their first month.
Rebranding and Revenue Growth
The Lucky Strike rebranding is expected to boost guest monetization by creating a premium experience and allowing for more appropriate pricing levels.
Negative Factors
Financial Performance
Lucky Strike Entertainment reported soft fiscal 2Q25 results, with both revenue and adj. EBITDA coming in below expectations.
Valuation Outlook
A reduction in the FY'26 EV/EBITDA target multiple indicates a more conservative outlook on valuation.
Visitor Traffic
LUCK's March foot traffic slightly down year-over-year, indicating ongoing challenges in attracting visitors.
Lucky Strike Entertainment (LUCK) vs. S&P 500 (SPY)
Market Cap
$1.32B
Dividend Yield2.48%
Average Volume (3M)365.58K
Price to Earnings (P/E)―
Beta (1Y)1.13
Revenue Growth8.60%
EPS Growth-99.28%
CountryUS
Employees11,374
SectorConsumer Cyclical
Sector Strength56
IndustryLeisure
Share Statistics
EPS (TTM)-0.03
Shares Outstanding84,477,210
10 Day Avg. Volume381,480
30 Day Avg. Volume365,577
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.21
Price to Cash Flow (P/CF)9.20
P/FCF Ratio504.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.31Price Target Upside66.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Lucky Strike Entertainment Business Overview & Revenue Model
Company DescriptionLucky Strike Entertainment (LUCK) is a prominent player in the entertainment and hospitality sector, offering a unique blend of upscale bowling, dining, and nightlife experiences. The company operates a chain of venues known for their modern design, vibrant atmosphere, and diverse offerings, including state-of-the-art bowling lanes, gourmet dining options, and live music events. Lucky Strike caters to both casual visitors and corporate clients, providing a versatile environment for social gatherings and corporate events.
How the Company Makes MoneyLucky Strike Entertainment generates revenue through multiple streams, primarily driven by its entertainment venues. The core revenue sources include lane rentals for bowling, food and beverage sales, and event hosting fees. The company capitalizes on its upscale dining options and bar services, which attract a wide range of customers. Additionally, Lucky Strike offers corporate event packages and private party bookings, which contribute significantly to its earnings. Strategic partnerships with local businesses and promotional events also play a role in enhancing foot traffic and boosting sales. The company focuses on creating a comprehensive entertainment experience, encouraging repeat visits and customer loyalty.
Lucky Strike Entertainment Financial Statement Overview
Summary
Lucky Strike Entertainment demonstrates positive revenue growth and operational efficiency but struggles with high leverage and liquidity issues. The company's financial health is impacted by negative stockholders' equity and negative free cash flow, indicating a need for strategic financial restructuring. The balance between growth and financial stability needs attention to ensure long-term sustainability.Income Statement
Lucky Strike Entertainment's revenue shows a promising upward trend from 2020 to TTM with a notable growth rate of 23.79% from 2023 to 2024. However, the company's net profit margin remains low at 1.11% in TTM, suggesting profitability challenges. The gross profit margin of 32.85% and EBITDA margin of 26.68% indicate reasonable operational efficiency. Despite this, the EBIT margin of 8.17% suggests room for improvement in controlling operational costs.65
Positive
Balance Sheet
The company exhibits high leverage with a negative stockholders' equity in TTM, resulting in an undefined debt-to-equity ratio. The return on equity is also undefined due to negative equity. The equity ratio is concerning as liabilities exceed assets, indicating potential financial instability.40
Negative
Cash Flow
Although operating cash flow is positive at $151.78 million, the company has a negative free cash flow of -$20.96 million in TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is strong at 11.61, suggesting efficient cash generation relative to net income. However, the negative free cash flow to net income ratio highlights challenges in maintaining liquidity.55
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.18B | 1.15B | 1.06B | 911.71M | 395.23M | 520.43M | Gross Profit |
| 388.39M | 314.18M | 342.41M | 301.73M | 20.98M | 77.17M | EBIT |
| 96.58M | 91.59M | 200.80M | 116.63M | -38.64M | -1.99M | EBITDA |
| 315.36M | 211.42M | 218.06M | 170.79M | 53.21M | 87.25M | Net Income Common Stockholders |
| 13.07M | -83.58M | 82.05M | -29.93M | -126.46M | -90.89M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 115.66M | 66.97M | 195.63M | 132.24M | 187.09M | 140.71M | Total Assets |
| 1.84B | 3.11B | 2.84B | 1.85B | 1.78B | 1.78B | Total Debt |
| 1.26B | 2.41B | 2.26B | 1.27B | 1.25B | 1.20B | Net Debt |
| 1.15B | 2.34B | 2.06B | 1.14B | 1.06B | 1.06B | Total Liabilities |
| 1.65B | 3.16B | 2.54B | 1.66B | 1.45B | 1.33B | Stockholders Equity |
| 187.63M | -49.85M | 299.55M | 192.32M | 330.12M | 443.81M |
| Cash Flow | Free Cash Flow | ||||
| -20.96M | -39.75M | 68.25M | 12.87M | 15.04M | -100.89M | Operating Cash Flow |
| 151.78M | 154.83M | 217.79M | 177.67M | 58.23M | 18.82M | Investing Cash Flow |
| -272.20M | -385.66M | -253.22M | -220.34M | -46.68M | -129.40M | Financing Cash Flow |
| 11.52M | 102.16M | 98.96M | -12.14M | 34.80M | 137.26M |
Lucky Strike Entertainment Technical Analysis
Neutral
9.21
Price Trends
9.84
Negative
10.32
Negative
11.00
Negative
Market Momentum
-0.29
Negative
50.71
Neutral
62.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LUCK, the sentiment is Neutral. The current price of 9.21 is above the 20-day moving average (MA) of 8.96, below the 50-day MA of 9.84, and below the 200-day MA of 11.00, indicating a neutral trend. The MACD of -0.29 indicates Negative momentum. The RSI at 50.71 is Neutral, neither overbought nor oversold. The STOCH value of 62.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LUCK.
Lucky Strike Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.42B | 15.20 | 18.31% | 1.54% | 3.84% | 19.95% | |
68 Neutral | $1.56B | 12.39 | 1222.83% | ― | 7.44% | 71.46% | |
67 Neutral | $1.53B | 55.38 | 7.28% | ― | 2.49% | -49.97% | |
61 Neutral | $1.46B | 9.45 | 31.30% | ― | 0.76% | 49.95% | |
60 Neutral | $1.09B | 13.07 | -20.16% | 5.62% | -3.57% | 2.31% | |
60 Neutral | $6.78B | 11.63 | 3.24% | 4.20% | 2.36% | -21.91% | |
49 Neutral | $1.32B | ― | -108.04% | 2.48% | 8.60% | -99.28% |
* Consumer Cyclical Sector Average
Performance Comparison
LUCK
Lucky Strike Entertainment
9.21
-2.28
-19.84%
MCRI
Monarch Casino & Resort
77.06
10.03
14.96%
PZZA
Papa John's International
33.48
-27.10
-44.73%
VSCO
Victoria's Secret
18.54
1.11
6.37%
MSGE
Madison Square Garden Entertainment Corp.
32.51
-6.91
-17.53%
SVV
Savers Value Village Inc.
9.40
-7.73
-45.13%
Lucky Strike Entertainment Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -15.12% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed outlook. Despite the successful opening of new centers and operational efficiencies, revenue declined slightly due to macroeconomic uncertainties and external challenges. The company is expanding and rebranding aggressively, which is expected to drive future growth. However, the decline in same-store sales and challenges in alcohol sales present concerns. Overall, while there are positive developments, the current environment poses significant challenges.Highlights
Successful Opening of New Centers
Four new Lucky Strike centers were opened, including two in Denver, one in Beverly Hills, and one in Ladera Ranch, California, each generating over $1 million in revenue within their first 30 days of operation, setting a new record.
Expansion and Rebranding Initiatives
The company began rebranding its centers to Lucky Strike, with four centers already rebranded and plans to reach 75 by year-end. This initiative is expected to boost retail traffic by 10-15%.
Operational Efficiencies and Cost Management
Payroll hours were optimized, resulting in double-digit reductions, and capital expenditures were reduced by 33% year-over-year. Labor, F&B costs, and repairs and maintenance saw savings, contributing to cost efficiencies.
Growth in Food and Amusement Segments
Food and amusements grew faster than other business lines. The F&B revenue attachment to bowling revenue increased to $0.80 from $0.76 a year prior.
Positive Customer Feedback
Net Promoter Score improved to 74 from 72, driven by enhanced food experience with the new menu rollout.
Lowlights
Revenue and Same-Store Sales Decline
Total revenue decreased by 1.8% to $300.1 million from $305.7 million the previous year, with same-store sales down 6.2%.
Impact of Macroeconomic Uncertainty
Heightened macroeconomic uncertainty affected the corporate events business, with a mid-single-digit decline in events revenue.
Challenges in Alcohol Sales
Alcohol sales underperformed compared to food sales, attributed to a consumer shift away from premium alcohol purchases.
Seasonal and External Challenges
Wildfires in LA caused a $5 million revenue hit, and calendar shifts like a later Thanksgiving and New Year's Eve moving to the next quarter affected revenue.
Company Guidance
During the Q2 2025 earnings call, Lucky Strike Entertainment provided guidance reflecting both challenges and strategic initiatives. Despite a 1.8% decline in total revenue to $300.1 million and a 6.2% decrease in same-store sales, the company generated an adjusted EBITDA of $98.8 million. This was achieved through cost efficiencies, including a 33% reduction in capital expenditures and a 9% decrease in payroll and benefits costs. The company opened four new centers, with two generating over $1 million in revenue in their first 30 days, and initiated a rebranding strategy expected to expand the number of Lucky Strike centers to nearly 75 by year-end. Efforts to enhance food and beverage offerings, dynamic pricing, and corporate event structures are anticipated to drive future growth. Despite macroeconomic uncertainties, the company remains cautiously optimistic about meeting its full-year guidance, bolstered by investments in new offerings and marketing channels.Lucky Strike Entertainment Corporate Events
Executive/Board Changes
Lucky Strike Entertainment’s Executive Vice Chairman Retires
Neutral
Feb 20, 2025
On February 18, 2025, Brett I. Parker announced his retirement from Lucky Strike Entertainment after 24 years, officially ending his tenure on February 28, 2025. As Executive Vice Chairman and former CFO, Parker was pivotal in securing billions in financings and navigating the company’s 2021 public listing, significantly influencing Lucky Strike’s growth and market leadership in location-based entertainment.
M&A TransactionsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Lucky Strike Shows Revenue Drop but Gains Net Income
Neutral
Feb 5, 2025
Lucky Strike Entertainment reported its financial results for the second quarter of fiscal year 2025, ending December 29, 2024, showing a decrease in revenue by 1.8% to $300.1 million and a decrease in same-store revenue by 6.2%. Despite this, the company achieved a net income of $28.3 million, a significant turnaround from the prior year’s loss. The company expanded its operations by opening new locations and acquiring Boomer’s, which added family entertainment centers and a water park to its portfolio. The company also engaged in a share repurchase program and declared a cash dividend. The results reflect challenges such as macroeconomic uncertainty and a shortened corporate holiday events window due to the election and calendar shifts, yet highlight growth in the leagues business and steady consumer traffic.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.