8-K: Pinstripes Reports 14.1% Revenue Growth in Fiscal Third Quarter 2024, Fueled by Strong Same-Store Sales

Pinstripes Holdings, Inc. announced a 14.1% increase in total revenue for the fiscal third quarter of 2024, driven by a 6.9% rise in same-store sales.

Summary

• Pinstripes Holdings, Inc. reported a 14.1% increase in total revenue for the third fiscal quarter of 2024, reaching $32.2 million.
• Food and beverage revenue grew by 14.2% to $24.9 million, while recreation revenue increased by 13.8% to $7.3 million.
• Same-store sales saw a 6.9% increase compared to the same period last year.
• The company experienced an operating loss of $(3.1) million, which included $1.9 million in pre-opening expenses.
• Net income was $12.2 million, primarily due to a gain on the change in fair value of warrant liabilities.
• Venue-Level EBITDA was $6.2 million, an 8.3% increase year-over-year, with a margin of 19.4%.
• Adjusted EBITDA was $0.4 million, compared to $3.0 million in the prior year period.
• Two new venues opened during and after the third quarter, bringing the total to 16 locations as of February 21, 2024.
• The company has plans to open three additional venues in the coming months.
• Pinstripes completed its transaction with Banyan Acquisition Corporation, becoming a public company and raising over $70 million in gross proceeds.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to strong revenue growth and expansion plans, but tempered by an operating loss and decreased Adjusted EBITDA. The company's future outlook is uncertain, and the market will likely react cautiously.

Positives

• Pinstripes experienced strong revenue growth of 14.1% year-over-year.
• Same-store sales increased by a solid 6.9%.
• Venue-Level EBITDA saw an 8.3% increase, indicating improved operational performance.
• The company successfully became a public entity and raised over $70 million.
• Pinstripes is expanding its footprint with two new venues opened and three more planned.

Negatives

• The company reported an operating loss of $(3.1) million, impacted by pre-opening expenses.
• Adjusted EBITDA decreased to $0.4 million from $3.0 million in the prior year period.
• Venue-Level EBITDA margin decreased by 104 basis points to 19.4%.

Risks

• The company's operating loss was impacted by pre-opening expenses and increased general and administrative costs related to becoming a public company.
• The company's Adjusted EBITDA decreased compared to the prior year period.
• The company's future performance is subject to various risks, including competition, the ability to manage growth, and the impact of economic factors.

Future Outlook

The company anticipates low single-digit same-store sales growth and a Venue-Level EBITDA margin of 13-16% for the fourth quarter of fiscal 2024. They also expect general and administrative expenses of $4.0-4.5 million, pre-opening expenses of $1.0-1.5 million, and an Adjusted EBITDA between $(0.75) and $0.3 million.

Management Comments

• Dale Schwartz, Founder and CEO, stated that the company grew revenue approximately 14% year-over-year and delivered a robust Venue-Level EBITDA margin of over 19%.
• Schwartz also mentioned the successful opening of the Aventura Pinstripes venue and the potential for at least 150 total locations domestically.
• Management believes the company is at an exciting inflection point and is well-positioned for growth.

Industry Context

Pinstripes operates in the experiential dining and entertainment sector, which is currently experiencing growth as consumers seek unique and engaging experiences. The company's expansion plans and focus on multi-generational activities align with current industry trends.

Comparison to Industry Standards

• Pinstripes' 6.9% same-store sales growth is a positive indicator, but it is important to compare this to other experiential dining and entertainment companies such as Dave & Buster's, which has seen varying same-store sales results in recent quarters.
• The Venue-Level EBITDA margin of 19.4% is a key metric, and it should be compared to similar companies in the restaurant and entertainment space to assess its competitiveness.
• The company's expansion plans to reach 150 locations are ambitious and will need to be executed effectively to compete with established players in the industry.

Stakeholder Impact

• Shareholders will be impacted by the financial results and future outlook.
• Employees will be affected by the company's growth and expansion plans.
• Customers will benefit from the opening of new venues.
• Suppliers will see increased business with the company's expansion.

Next Steps

• The company plans to open three new venues in Orlando, FL; Walnut Creek, CA; and Coral Gables, FL in the coming months.
• Pinstripes will continue to focus on its growth strategy and expansion plans.
• The company will host a conference call to discuss the financial results.

Key Dates

Keywords

Pinstripes, Revenue Growth, Same-Store Sales, Venue-Level EBITDA, Adjusted EBITDA, Experiential Dining, Entertainment, Public Company, Restaurant, Bowling, Bocce