Lucky Strike’s fourth quarter results were met with a negative market reaction as the company missed Wall Street’s revenue and earnings estimates. Management attributed the quarter’s modest sales growth to continued strength in its retail and league businesses, while the events segment, previously a drag on performance, showed signs of stabilization. CEO Thomas Shannon noted, “The changes we have made to the events organization, pricing, and funnel are beginning to show results,” highlighting early momentum in January. However, deliberate investments in payroll and marketing weighed on margins, resulting in a lower operating margin compared to last year.
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Lucky Strike (LUCK) Q4 CY2025 Highlights:
- Revenue: $306.9 million vs analyst estimates of $313.2 million (2.3% year-on-year growth, 2% miss)
- Adjusted EPS: -$0.15 vs analyst estimates of $0.03 (significant miss)
- Adjusted EBITDA: $77.47 million vs analyst estimates of $97.7 million (25.2% margin, 20.7% miss)
- The company reconfirmed its revenue guidance for the full year of $1.29 billion at the midpoint
- EBITDA guidance for the full year is $395 million at the midpoint, above analyst estimates of $386.1 million
- Operating Margin: 10.9%, down from 15.6% in the same quarter last year
- Same-Store Sales were flat year on year (-6.2% in the same quarter last year)
- Market Capitalization: $1.04 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Lucky Strike’s Q4 Earnings Call
- Steven Wieczynski (Stifel) questioned the decision not to lower EBITDA guidance despite margin pressures, and CFO Bobby Lavan reaffirmed confidence, citing early-year strength and expected seasonal gains from water parks.
- Matthew Boss (JPMorgan) asked about the turnaround in the events business, with Lavan explaining that dynamic pricing and tighter marketing coordination have helped stabilize the segment.
- Jason Tilchen (Canaccord Genuity) inquired about food and beverage performance and attach rates. President Lev Ekster responded that nonalcoholic beverage sales grew sharply, tablet rollouts increased average check size, and new product initiatives are planned.
- Ian Zaffino (Oppenheimer) sought specifics on which investments underperformed. Lavan detailed that incremental labor and certain activity programs did not yield expected returns, prompting a move to more targeted spending.
- Gregory Miller (Shoeh Securities) asked about the pace and impact of upcoming Lucky Strike conversions. CEO Thomas Shannon noted future conversions should accelerate returns as critical mass is built for national marketing.
Catalysts in Upcoming Quarters
Over upcoming quarters, the StockStory team will track (1) the seasonal earnings contribution and guest response at recently acquired water parks, (2) the pace and impact of completing brand conversions to Lucky Strike and AMF, and (3) the effectiveness of targeted cost controls in restoring margin expansion. We will also monitor new product rollouts and improvements in the events business as indicators of sustainable growth.
Lucky Strike currently trades at $7.58, up from $7.33 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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