Lucky Strike Entertainment executives highlighted modest positive comparable sales and early signs of improvement in its long-challenged events business during the company’s fiscal second-quarter 2026 earnings call for the period ended December 28, 2025. Management also discussed a shift toward tighter cost discipline following heavier spending on labor and marketing, as well as expectations for a more meaningful earnings contribution from recently acquired seasonal assets in the back half of the fiscal year.
Quarter results: Slightly positive comp, retail and leagues steady, events near flat
Founder and CEO Thomas Shannon said the company finished the December quarter with a same-store sales comp of +0.3% and total revenue growth of +2.3%. He attributed the performance to continued strength in the retail and league segments, along with progress in turning around the events business, which he said ended “nearly flat” for the quarter and marked its “best showing in years.”
Spending, margins, and a pivot toward EBITDA expansion
Management said it made “deliberate investments” during the quarter in payroll, marketing, and activity levels to drive traffic and return to positive same-store sales. Shannon said some of that spending generated attractive returns, but not all of it met expectations, with incremental labor weighing on profitability. As a result, he said the company is shifting to a more balanced approach that gives equal weight to same-store sales growth and EBITDA expansion, with future investments “more targeted” and held to a higher return threshold.
In response to analyst questions about margin pressure, Lavan quantified several year-over-year cost increases that management characterized as headwinds during the quarter:
- Center payroll on a comparable basis up $6 million year over year
- Marketing investment up $4 million year over year
- Marketing team investment up $1 million year over year
Lavan said the company is working to “optimize” those expense levels after seeing strong January results, and he expects “material” margin growth in the fourth quarter as water parks and family entertainment centers shift from off-season drag to meaningful EBITDA contributors.
Events turnaround: Dynamic pricing and marketing coordination
Executives emphasized pricing discipline as a key driver of improvement in events. Lavan said the company “chased price” for two years by routinely offering discounts, but is now using dynamic pricing to better align discounts with periods of lower demand. He said the company built dynamic pricing reporting systems in September, and while the events business had been tracking down double digits at that time, it was brought “all the way back,” largely through price rather than volume.
He added that corporate events remained challenging from a volume standpoint and would require building marketing functions and awareness, while marketing efforts were also supporting kids’ birthday parties and consumer events.
Marketing metrics, brand conversions, and the Bowlero transition
President Lev Ekster said increased marketing spend was aimed at brand building and awareness, and he pointed to several metrics management tracks. Ekster said media impressions increased 200% year over year, from 340 million in the prior-year quarter to more than 1 billion this year. He also said online revenue rose 28% year over year and booking conversions improved 2x.
Ekster said the company completed 30 Lucky Strike rebrands in Q2 and expects to finish all rebrands within the calendar year, adding that moving from three brands to two should improve national awareness and efficiency. Shannon told analysts the next tranche of conversions should not be meaningfully different from earlier ones, noting the timing has often been dictated by permitting processes in various municipalities. He also described the importance of reaching “critical mass” in individual markets to make marketing dollars more effective.
Shannon reiterated the plan to sunset the Bowlero brand by the end of the calendar year, while Lavan said conversions to Lucky Strike have delivered “strong lifts” and that a simpler two-brand structure (Lucky Strike and AMF) should drive efficiencies, particularly in marketing. The company’s legacy brand was also discussed in the context of a planned refresh: management said it intends to roll out a refreshed AMF look later in the year that leans into the brand’s more than 100-year history.
Bowlero (NYSE:BOWL) was referenced in this context as the company described consolidating its brand portfolio.
Seasonal assets: Water parks, Boomers, and acquisition activity
Shannon said the company closed on the acquisition of Raging Waters, described as the largest water park in California, in January. He said it should contribute meaningful EBITDA in the June and September quarters. Alongside Wet ’n Wild Emerald Pointe in North Carolina and three newly acquired family entertainment centers, management expects a seasonal lift to earnings during the summer months as the portfolio diversifies.
Executives provided additional detail on water park and family entertainment center operations and capital projects. Shannon said Big Kahuna’s in Destin saw a 20% increase after a “comprehensive facelift,” including structural and aesthetic improvements such as rebuilt bridges, replaced fencing, painting, slide work, and equipment fixes. He also said preliminary results showed legacy Boomers locations up 25% in revenue over the last two weeks, benefiting from capital investment.
On specific assets, Shannon said the company added covered event spaces at Raging Waves and obtained a beer license in mid-2024, which contributed “a couple hundred thousand dollars” in alcohol sales last year. He said the company plans to increase food and beverage availability and optimize guest flow for this season. He also said the company purchased 66 acres adjacent to Raging Waves but currently has no plans for the land. A larger park expansion, including pools and an action river to increase capacity by 1,500 to 2,000 people, was deferred after permitting delays, with a target of a 2027 summer opening.
For Raging Waters in California, Shannon said the park does not have a liquor license and the company plans to apply, but does not expect it for this summer.
Lavan also addressed weather impacts, saying snowstorms created a roughly $5 million revenue hit in January and another $2 million impact in December. When asked about additional deals, Lavan said the company has completed $95 million of acquisitions this year, but is currently focused on executing a strong summer season.
About Bowlero (NYSE:BOWL)
Bowlero Corporation operates one of the largest bowling center networks in North America, offering an array of bowling and entertainment experiences under its Bowlero, Bowlmor Lanes and AMF Bowling brands. The company’s venues combine traditional ten-pin bowling with modern amenities such as full-service bars, food and beverage offerings, premium bowling lanes, and private event spaces. Bowlero also enhances guest experiences through live entertainment, arcade games, billiards tables and league-play programs tailored for casual bowlers and competitive enthusiasts alike.
Since its origins in the mid-20th century as AMF Bowling, the business underwent a series of strategic transformations, including a merger with boutique operator Bowlmor Lanes and a subsequent rebranding initiative that introduced the Bowlero concept in the late 2010s.
