Bowlero Corp. BOWL reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, Bowlero’s ongoing expansion efforts and efficiency improvements contributed to increased consumer traffic and engagement. It stated benefits from strong season pass sales and acquisitions, including Lucky Strike (achieving record profitability) and Raging Waves (experiencing double-digit year-over-year revenue growth).
With the current economic conditions creating more opportunities for mergers and acquisitions, Bowlero plans to continue its strategy of acquiring assets at attractive prices and systematically improving them. The company expects to see similar returns with the acquisitions of centers from AMF, Brunswick, Bowl America and more than 40 independent locations.
Following the release, the company’s shares moved up 12.9% during after-hours trading on Sept. 5.
Bowlero’s Earnings & Revenue Discussion
Bowlero Corp. Price, Consensus and EPS Surprise
Bowlero Corp. price-consensus-eps-surprise-chart | Bowlero Corp. Quote
During the fourth quarter of fiscal 2024, the company reported a loss per share of 6 cents, wider than the Zacks Consensus Estimate of a loss of 1 cent. In the prior-year quarter, the company reported a loss per share of 9 cents.
Quarterly net revenues of $283.9 million beat the consensus mark of $273 million. The top line increased 18.6% year over year.
BOWL’s Operating Highlights & Expenses
During the fiscal fourth quarter, the cost of revenues came in at $216.5 million, up 18.9% from the prior-year quarter’s level. Selling and administrative expenses increased 15.3% year over year to $40.4 million.
Gross profit during the quarter came in at $67.3 million compared with $57.2 million reported in the prior-year quarter.
Net loss was $62.2 million against income of $146.2 million reported in the year-ago quarter.
Adjusted EBITDA during the quarter totaled $83.4 million compared with $64.5 million reported in the prior-year quarter. Adjusted EBITDA margin came in at 29.4% compared with 26.9% in the prior-year quarter.
Balance Sheet
As of June 30, 2024, the company’s cash and cash equivalents amounted to $66.9 million compared with $195.6 million as of July 2, 2023.
During the quarter, net long-term debt amounted to $1.13 billion compared with $1.14 billion in the prior-year quarter.
For the three months (ended June 30, 2024), net cash provided by operating activities amounted to $6.7 million compared with $9 million reported in the prior-year period.
Bowlero’s Fiscal 2024 Highlights
Total revenues in fiscal 2024 amounted to $1.15 billion compared with $1.1 billion in fiscal 2023.
Net loss in fiscal 2024, came in at $83.6 million against an income of $82 million reported in the previous year.
Adjusted EBITDA in fiscal 2024 came in at $361.5 million compared with $354.3 million in fiscal 2023.
Fiscal 2025 Guidance
For fiscal 2025, the company expects revenues to be in the range of $1.22-$1.28 billion. Adjusted EBITDA is anticipated between $390 million and $430 million. The adjusted EBTIDA margin is likely to be between 32% and 34%.
Zacks Rank & Key Picks
Bowlero has a Zacks Rank #3 (Hold) at present.
Some top-ranked stocks in the Zacks Consumer Discretionary sector are Royal Caribbean Cruises Ltd. RCL, DoubleDown Interactive Co., Ltd. DDI and Monarch Casino & Resort, Inc. MCRI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Caribbean Cruises has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has rallied 59.9% in the past year. The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) calls for growth of 18.1% and 71.1%, respectively, from the year-ago levels.
DoubleDown Interactive has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has surged 44.7% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Monarch Casino & Resort has a trailing four-quarter negative earnings surprise of 3.5%, on average. The stock has increased 16.4% in the past year. The Zacks Consensus Estimate for MCRI’s 2024 sales and EPS indicates an increase of 2.3% and 10%, respectively, from the year-ago levels.
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