On November 26, 2024, Pinstripes Holdings Inc (PNST, Financial) released its 8-K filing detailing the financial results for the fiscal quarter ended October 13, 2024. Pinstripes Holdings Inc, known for its unique blend of Italian-American cuisine, bowling, bocce, and private events, operates 17 venues across the United States.
Performance Overview
Pinstripes Holdings Inc reported a 7.5% increase in total revenue, reaching $26.5 million compared to the previous year's fiscal quarter. This growth was driven by new venue developments, with food and beverage revenues rising by 8.6% to $21.1 million and recreation revenues increasing by 3.6% to $5.4 million. Despite these gains, the company faced an operating loss of $7.9 million, slightly higher than the $7.2 million loss in the prior year, primarily due to increased pre-opening expenses and operational costs associated with new locations.
Financial Achievements and Industry Context
The company's revenue growth is a positive indicator in the restaurant and entertainment industry, where experiential dining concepts are gaining popularity. However, the increase in net loss to $9.3 million from $7.3 million in the previous year highlights ongoing challenges in managing operational costs and achieving profitability. The decrease in same-store sales by 9.4% underscores the need for strategic adjustments to enhance customer retention and sales at existing locations.
Key Financial Metrics
Pinstripes Holdings Inc's Venue-Level EBITDA was reported at $1.3 million, a decrease from the previous year's $1.6 million, with a margin of 5.0%. This decline is attributed to the less efficient ramp-up of four new locations. However, mature venues showed a slight improvement in EBITDA margin, increasing by 51 basis points to 8.3%. Adjusted EBITDA improved to $(3.1) million from $(4.2) million, reflecting efforts to streamline operations and reduce costs.
Dale Schwartz, Founder and CEO, stated, “We continue to make significant progress on rationalizing our cost structure by removing an annualized $15 million at the store and corporate level, and we have also initiated several local-store marketing campaigns that are driving awareness and sales at all venues.”
Income Statement and Balance Sheet Insights
The income statement reveals that food and beverage costs remained stable at 17.5% of total revenues, while store labor and benefits costs increased to 38.9%, influenced by the addition of new stores. General and administrative expenses rose to $5.1 million, reflecting increased public company readiness initiatives and stock-based compensation. The balance sheet shows a decrease in cash and cash equivalents to $3.2 million from $13.2 million, highlighting the need for effective cash management and potential capital raising to support future operations and expansion.
Analysis and Future Outlook
Pinstripes Holdings Inc's focus on expanding its venue footprint and enhancing operational efficiency is crucial for long-term success. The company's ability to manage costs while driving revenue growth through new venues will be key to improving profitability. The strategic initiatives to strengthen the balance sheet and raise additional capital are essential steps in supporting the company's growth ambitions and enhancing shareholder value.
| Metric | Q2 Fiscal 2025 | Q2 Fiscal 2024 |
|---|---|---|
| Total Revenue | $26.5 million | $24.6 million |
| Net Loss | $(9.3) million | $(7.3) million |
| Venue-Level EBITDA | $1.3 million | $1.6 million |
| Adjusted EBITDA | $(3.1) million | $(4.2) million |
Pinstripes Holdings Inc's latest earnings report reflects both the opportunities and challenges faced by the company in the evolving dining and entertainment landscape. As the company continues to expand and refine its operations, maintaining a balance between growth and cost management will be pivotal in achieving sustainable profitability.
Explore the complete 8-K earnings release (here) from Pinstripes Holdings Inc for further details.
