By Emon Reiser

Shares for Bowlero climbed after the dining and entertainment company closed out its fiscal year with better-than-expected sales, boosted by a new revenue stream.

The stock rose 12% in pre-market trading Friday to $12.17. Ahead of Thursday's market close, Bowlero's shares were down 23.8% year to date.

Bowlero on Thursday reported a 19% leap in fourth-quarter revenue to $283.9 million, blowing past the $274.3 million expected by analysts polled by FactSet. Jefferies analysts credited the top-line beat in part to its recently established Summer Season pass, which drew $8.5 million in sales since its May 24 launch.

"The [company's] Summer Season Pass was a success, laying the groundwork for additional seasons and growth opportunities," Jefferies analysts said in a note.

Bowlero's inaugural Summer Season pass allowed its customers to play two games of bowling daily until Sept. 2, with an upgrade option for additional perks. The initiative introduced a new revenue stream while setting the stage for a strong boost to their already-improving foot traffic trends, Jefferies analysts said in a note. The company will launch a fall season pass to follow.

"Additionally, management laid out a strong full-year 2025 outlook and appears poised to further its market share gains and top-line growth through acquisitions, new center builds, and ongoing center conversions, all while driving shareholder value," they added.

Oppenheimer analysts also noted the nearly 38% increase in the company's events business, bolstered by corporate gatherings, as well as a new season pass introduced at the company's Raging Waves waterpark.

"New builds (four opening between September and November) should also help drive solid top-line growth this fiscal year," Oppenheimer analysts said. "The company will also continue to roll out a new food and beverage menu across centers."

For fiscal 2025, Bowlero expects revenue between $1.22 billion and $1.28 billion, representing an increase of up to 10% year over year.

Investors appear to be more bullish on Bowlero than its competitor, Pinstripes, which cut its guidance as traffic to its venues slowed over the summer months. Shares for Pinstripes are down 27% week to date and 84% year to date.

Write to Emon Reiser at emon.reiser@wsj.com

(END) Dow Jones Newswires

September 06, 2024 08:34 ET (12:34 GMT)

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