Shares of bowling company Bowlero (BOWL 15.78%) popped on Monday, even though the market was down. The company reported strong financial results for its fiscal second quarter of 2024 and announced some shareholder-friendly moves. And that’s why Bowlero stock was up almost 14% as of 11:45 a.m. ET.
Bowlero is looking to give back to shareholders
Bowlero’s Q2 ended on Dec. 31. The company owns 350 bowling centers and also owns the Professional Bowlers Association.
In Q2, Bowlero generated revenue of $306 million, up almost 12% year over year. Same-store sales were roughly flat, meaning that its higher revenue came from adding three new locations during the quarter.
Bowlero only just went public in December 2021 via a merger with a special purpose acquisition company (SPAC). This is designed to raise money from shareholders but Bowlero has steadily given back ever since. Since going public, its share count is down by 20% through share repurchases. And in Q2, management instituted what it intends to be a regular quarterly dividend.
The dividend will start at $0.055 per share for shareholders of record as of Feb. 23.
With revenue up and shareholder-friendly moves, no wonder the market is excited about Bowlero stock.
Bowlero looks ahead
For its fiscal 2024, Bowlero expects top-line growth of 10% to 15%, which is a good growth rate.
Bowlero is highly levered, motivating management to talk about adjusted earnings before taxes, interest, depreciation, and amortization (EBITDA) more often than not (adjusted profit numbers exclude the high interest payments). That said, the company expects a full-year adjusted EBITDA margin of 32% to 34%, which is good even for an adjusted metric.
Moving forward, Bowlero intends to spend a lot to remodel and acquire new bowling centers and it intends to continue returning money to shareholders. While its debt load is a risk for investors, right now the company is performing well enough to handle its debt and still grow, which should be encouraging to shareholders.
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
