Lucky Strike Entertainment Corporation Class A

A copy of the press release is available in the investor relations section of our website. Joining me on the call today are Thomas Shannon, our founder and chief executive, and Lev Exter, our president. I'd like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filings with the SEC. Lucky Strike Entertainment undertakes no obligation to revise or update any events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website. I'll now turn the call over to Tom.

Thanks everyone for joining today's call. We finished the December quarter with a positive same store sales comp of plus 0.3% and total revenue growth of plus 2.3%. The result was driven by continued strength in both our retail and league businesses while we made steady progress turning around our events business, which ended nearly flat for the quarter, its best showing in years. Retail and lease performed well throughout the quarter and provided a stable foundation for the comp. Events, which had been the primary drag on same store sales over the past several quarters, inflected meaningfully in January. The changes we've made to the events organization, pricing, and funnel are beginning to show results. January started off with strong double digit results. We saw one week of headwinds from the biggest snowstorm this country has seen in a while. and then a return back to momentum of strength of retail, leagues, and events. During the quarter, we made deliberate investments in payroll, marketing, and elevated activity levels to drive traffic and return the business to positive same-store sales growth. A number of these investments delivered attractive returns and helped establish positive momentum, particularly in retail, leagues, and the early stages of the events turnaround. However, Not all of the spending generated the ROI we expected, with incremental labor in particular weighing on profitability. As a result, while we remain focused on driving organic growth, we are shifting toward a more balanced approach that places equal emphasis on same-store sales growth and EBITDA expansion. Going forward, investments will be more targeted, more measured, and held to a higher return threshold. In January, we also closed on the acquisition of Raging Waters, the largest water park in California, which will contribute meaningful EBITDA in the June and September quarters. When combined with Wet and Wild Emerald Point in North Carolina and three new family entertainment centers we've acquired, we expect a significant seasonal lift to earnings as we move through the summer months, reflecting the continued diversification of our portfolio. On the brand front, We opened Lucky Strike Alyssa Viejo in Orange County, California in December, and early results have been encouraging. We now operate approximately 100 Lucky Strike locations and remain on track to sunset the Bolero brand by the end of this calendar year. Conversions to Lucky Strike have delivered strong lifts and simplifying the portfolio to two cohesive brands, Lucky Strike and AMF, will drive efficiencies, particularly in marketing spend. At the same time, we plan to roll out a refreshed AMF look later this year that leans into the brand's more than 100-year history. This evolution strengthens our value-oriented offering while clearly differentiating it from Lucky Strike, positioning the portfolio for profitable growth and improved returns. With that, let's turn it over to Q&A.

Ladies and gentlemen, we will now begin the question and answer session. As we enter Q&A, we ask that you please limit your input to one question. To ask a question, please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment, please, for your first question. Your first question comes from the line of Steve Vyshynski of CFO. Please go ahead.