Bowlero Corp BOWL has reported a significant upturn in stock value following the release of its second-quarter FY24 results.
The company experienced an 11.8% increase in revenue compared to the previous year, with a total of $305.7 million, surpassing the analyst consensus of $300.5 million.
The same-store revenue showed a modest 0.2% year-over-year growth and an impressive 27.8% increase compared to the second quarter of FY20.
However, the gross profit for the quarter decreased to $90.6 million from $93.7 million in the previous year.
Despite this, the adjusted EBITDA of $103.1 million reflected an increase from $97.0 million, with the margin contracting to 33.7% from 35.5% a year ago.
Unfortunately, the EPS experienced a loss of $(0.44), missing the consensus of $0.12.
As of December 31, 2023, the company held $190 million in cash and cash equivalents. The operating cash flow for the quarter was $55.1 million.
Bowlero currently has a total of 350 operational centers as of February 5, 2024.
Dividend: BOWL declared an initial quarterly cash dividend per share of $0.055 for the third quarter FY24, payable on March 8, 2024, to stockholders of record on February 23, 2024.
Buyback: The company repurchased 7.5 million shares, totaling approximately $80 million during the quarter.
On February 2, 2024, the Board of Directors extended and increased the share repurchase program, raising the authorized repurchase amount to $200 million and removing the program expiration date.
Outlook: Bowlero reiterated FY24 revenue, excluding service fee revenue, to be in the range of $1.14 billion – $1.19 billion, with an anticipated adjusted EBITDA margin of 32% – 34%.
The company plans to heavily reinvest in the business for FY24, with over $190 million allocated for acquisitions (an increase from the prior view of $160 million), $40 million for new builds, and $80 million for conversions (versus $75 million prior).
The company also expects third-quarter revenue, excluding service fee revenue, to fall within the range of $335 million to $350 million compared to the street’s consensus of $350.93 million.
Bobby Lavan, Chief Financial Officer, commented, “In the quarter, we received $409 million net proceeds from our sale-leaseback transaction with Vici. We used proceeds to pay down our revolver balance in full, fund acquisitions including Lucky Strike, and accelerate our capital investment plan.”
Price Action: BOWL shares are up 16.7% at $13.46 on the last check Monday.
