Pinstripes reported first quarter earnings results Wednesday after market, which included a 2.4% decrease in same-store sales. During the company’s earnings call, chief executive officer Dale Schwartz cited a challenging macro environment and softer consumer demand for missing expectations, especially in June when sales fell almost 6% before rebounding to flat in July.
Chief financial officer Tony Querciagrossa said hot weather also played a part in the slowing summer cadence, impacting patio business, while the timing of some corporate events shifted as well.
“We don't have a lot of units, so all it takes is a couple of events to shift things,” he said.
Pinstripes updated its 2025 comp guidance to reflect current conditions. They are now projected to be at a low-single-digit decline to low-single-digit increase. The prior guidance was a solid low-single-digit increase.
The company’s revenues increased 19% year-over-year, including a 16% increase in food and beverage revenues, driven by four new unit openings. Though positive, the increase missed expectations by about $4 million, according to a note from William Blair analyst Sharon Zackfia.
On a positive note, event books increased 5.6% through the first four weeks of the second quarter, marking an improvement in Pinstripes’ event business, which represent nearly 50% of revenue. Food and beverage make up about 75% of Pinstripes’ total revenue, with bowling and bocce making up the balance.
Also, new units are expected to generate $7 million in average unit volumes, while more mature locations are targeted to reach $10 million in fiscal 2025. Pinstripes expects to open two new venues in late Q2 or early Q3. Five locations are currently under development and another potential 30 sites are in various stages of development. Combined with the company’s current portfolio of 17 open locations, 22 total locations are now open or under lease.
Finally, Schwartz noted that the company made progress on improving its structure by removing an annualized $10 million across the system through strategic hourly and salaried labor scheduling and more favorable credit card processing fees and contract negotiations with vendors.
“While these improvements are currently being masked by sales deleverage, we are proud to position our brand for improved profitability as the macro environment improves,” Schwartz said. “We believe we now have the appropriate cost structure to drive long-term topline performance through same-store sales growth, as well as new unit openings, while ensuring we are maintaining sufficient corporate level profitability.”
Notably, Pinstripes’ lower-than-expected earnings came as some of its eatertainment peers also show signs of slowing. Callaway announced on Wednesday it plans to spin off its Topgolf brand next year, for instance, following a negative second quarter. On the other hand, new data from Placer.ai shows that traffic at both Dave & Buster’s and Main Event increased year-over-year during the second quarter, by 6.9% and 4.7%, respectively.
Schwartz remains optimistic about the category and Pinstripes’ place in it.
“For us, and a lot of our peers, we're mostly up against some very sizable sales increases from a year prior … Some of the excitement post-COVID, we're all up against that,” he said. “Our performance has been considerably better than a lot of our peers that have seen more double-digit negative sales. I don't think it's a competitive issue and I don't think it's an overall waning of the category. I think it's just lapping comps.”
Contact Alicia Kelso at [email protected]
