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Pinstripes Holdings, Inc. (PNST)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue grew 10.4% year-over-year to $35.5M on new-store contribution; sequentially, revenue rose from $26.5M in Q2 to $35.5M in Q3 as the seasonally strong events quarter kicked in .
  • Same-store sales declined 7.7% year-over-year, a sequential improvement versus Q2’s -9.4%; venue-level EBITDA margin held at 19.2% (down just 20 bps YoY), and Adjusted EBITDA improved to $2.7M from $0.4M last year and from $(3.1)M in Q2 .
  • Net loss was $8.1M vs net income of $12.2M in the prior year quarter, primarily due to last year’s gain on warrant liabilities; operating loss improved modestly to $(3.2)M vs $(3.1)M YoY .
  • Liquidity is tight: cash was $2.4M; management disclosed going concern doubt, a leverage covenant breach, and received $6.0M incremental funding from Oaktree on Jan 21, 2025; CFO Tony Querciagrossa will step down on Feb 28, 2025 .
  • No formal numeric guidance; management indicated potential margin expansion in Q4 and plans to open Coral Gables in Q4, with Jacksonville later in calendar 2025 contingent on financing .

What Went Well and What Went Wrong

What Went Well

  • Cost actions drove profitability resilience: venue-level EBITDA margin 19.2% (down only 20 bps YoY); Adjusted EBITDA reached $2.7M, the “best corporate profitability quarter in 2 years” per CEO .
  • New stores matured as expected, delivering double-digit venue-level EBITDA margins in the quarter; all new locations were profitable in Q3 per CFO .
  • SG&A declined to $4.8M from $5.3M YoY, reflecting ~$4M annualized corporate cost reductions beginning to flow through; store labor and benefits rate fell 60 bps YoY to 33.1% .

What Went Wrong

  • Same-store sales fell 7.7% YoY; management cited early-quarter marketing changes causing ~300 bps headwind and macro/weather pressures, with improvement late in quarter driven by events .
  • Net loss of $8.1M due to higher interest expense and lack of prior-year warrant gain; occupancy and other operating expense rates increased YoY (140 bps and 60 bps, respectively) .
  • Liquidity stress and covenant breach led to going concern disclosure; cash dropped to $2.4M vs $13.2M at FY start, requiring additional funding and strategic alternatives .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD Millions)$32.162 $26.482 $35.516
Operating Loss ($USD Millions)$(3.057) $(7.874) $(3.235)
Net Income (Loss) ($USD Millions)$12.248 $(9.310) $(8.079)
Diluted EPS ($USD)$0.33 $(0.22) $(0.19)
Segment RevenueQ3 2024Q2 2025Q3 2025
Food & Beverage ($USD Millions)$24.854 $21.108 $27.455
Recreation ($USD Millions)$7.308 $5.374 $8.061
MarginsQ3 2024Q2 2025Q3 2025
Venue-Level EBITDA Margin (%)19.4% 5.0% 19.2%
Mature Venues EBITDA Margin (%)21.9% 8.3% 21.6%
KPIsQ3 2024Q2 2025Q3 2025
Same-Store Sales (%)N/A(9.4)% (7.7)%
Venue-Level EBITDA ($USD Millions)$6.227 $1.321 $6.815
Adjusted EBITDA ($USD Millions)$0.426 $(3.111) $2.679
Cash & Cash Equivalents ($USD Millions)N/A$3.244 $2.385

Note: Same-store sales in Q3 were pressured early by marketing/promo changes; event bookings improved late in quarter .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/UpdateChange
Adjusted EBITDA ($USD)Q3 2025“Adjusted EBITDA to be positive in Q3 and above prior year” $2.679M actual Achieved
Venue-Level EBITDA MarginQ4 2025No formal guidanceManagement “aiming to…expand margins potentially above Q3” Directional upgrade
Unit OpeningsQ4 2025Coral Gables expected to open in Q4 FY25 Plan maintained; Coral Gables in Q4 FY25; Jacksonville later CY2025 subject to financing Maintained
PricingH1 CY2025No material price increases; dynamic gaming pricing; targeted promotions Same stance reiterated Maintained

No formal revenue/EPS guidance provided in Q3 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2)Current Period (Q3)Trend
Cost reductions~$10M store-level savings fully implemented; targeting ~$4M SG&A savings; Q2 margins improved despite negative comps ~$10M store savings and ~$4M SG&A reductions flowing through; venue-level margin 19.2% Improving
Marketing/promo strategyPulled back paid digital early in Q2, saw sales decline; course-corrected; Q3-to-date comps improved late Nov Early Q3 marketing changes caused ~300 bps headwind; comps improved to -7.7% with events strength Stabilizing
Events businessSeasonally strongest in Q3; strong lead generation/booking noted into holiday season Events drove late-quarter improvement; continued tourism/convention segment investment Improving
Liquidity/financingAnticipated positive Q3 cash flow; evaluating external capital; debt ~$114M Cash $2.4M; going concern doubt; covenant breach; $6M Oaktree tranche funded Jan 21 Deteriorated, then partially supported by funding
Unit developmentOpened Walnut Creek Nov 15 (2nd SF area); no Q2 openings Plan to open Coral Gables in Q4; Jacksonville later CY2025 pending financing Prudent/pacing with capital
PricingDynamic gaming pricing; no material increases; targeted promotions Reiterated: no material price increases on events; dynamic gaming; promotions (e.g., 50% off happy hours) Maintained

Q-1 themes not available in filings repository; table focuses on Q-2 and Q-3.

Management Commentary

  • “Our team’s ability to successfully execute on our cost reduction initiatives…allowing us to deliver strong third-quarter venue-level EBITDA margins of over 19%…While we are not satisfied with our top-line results…” — Dale Schwartz, CEO .
  • “The substantial work…to remove $10 million in annualized cost savings at the store level helped to protect our overall profitability…Our cost-saving initiatives extended to the corporate level with the targeted removal of approximately $4 million of annualized cost savings in our SG&A.” .
  • Liquidity: “As of January 5, we had $2.4 million in cash and cash equivalents…on January 21, Oaktree funded an additional $6 million…we do not intend to make any further public comment until we conclude the strategic and financing alternative process.” .
  • CFO transition: “Tony Querciagrossa…is stepping down, effective February 28, 2025…” .

Q&A Highlights

  • Same-store sales trajectory: comps were double-digit negative early but snapped back in the final month, ending at -7.7%; ~300 bps headwind from promotions/marketing changes; weather affected January/February, with easier Q4 lap ahead .
  • Cost savings: $10M store-level and $4–5M SG&A savings are completed and flowing through; full annualized benefits expected in Q4 and thereafter .
  • Pricing: No material price increases on private events (≈half of sales); dynamic pricing for gaming; targeted promotions (“two for Tuesdays,” happy-hour gaming at 50% off) .
  • Unit growth: Coral Gables targeted for Q4; Jacksonville later in CY2025; further locations contingent on financing .
  • Margin outlook: Potential expansion above Q3, with mature venues expected to snap back and new locations profitable again in Q4 .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Revenue, EPS, and EBITDA for Q3 and Q2, but data access was unavailable due to SPGI daily request limits. As a result, a formal “vs. estimates” comparison cannot be provided at this time [GetEstimates error].

Key Takeaways for Investors

  • Sequential improvement into the seasonally strong events quarter with revenue rising to $35.5M and venue-level margins back to ~19%, supported by cost actions; watch for sustained comp recovery as marketing normalizes .
  • Same-store sales remain negative; management attributes pressure to early-quarter promo mix and macro/weather; events strength is a lever, but consistency is crucial for margin progression .
  • Liquidity risk is material: cash $2.4M, going concern disclosure, covenant breach, and reliance on incremental lender support; strategic alternatives and financing outcomes are key stock catalysts in the near term .
  • Non-GAAP profitability improved markedly (Adjusted EBITDA $2.7M) despite weak comps; focus on sustainability of SG&A/store-level savings and maturation of new units to drive corporate profitability .
  • Unit pipeline paced to capital: Coral Gables in Q4, Jacksonville later CY2025; growth cadence will likely depend on financing progress and liquidity resolution .
  • Pricing discipline: no material event-side increases; dynamic gaming pricing and targeted promotions intended to support traffic without sacrificing value perception .
  • Monitoring items: margin expansion potential in Q4, events booking momentum, further lender actions/Oaktree milestones, CFO transition impact on execution .

Appendices

Additional Operating Detail (from Q3 press release)

  • Cost of food & beverage: 15.5% of revenue (down 10 bps YoY) .
  • Store labor & benefits: 33.1% of revenue (down 60 bps YoY; down ~20 bps ex-new stores) .
  • Occupancy (ex-depr): 16.8% of revenue (up 140 bps YoY) .
  • Other store operating (ex-depr): 16.6% of revenue (up 60 bps YoY) .

Liquidity Snapshot

  • Cash & cash equivalents: $2.385M (Jan 5, 2025) vs $13.171M (Apr 28, 2024) .
  • Oaktree Tranche 2 funded $6.0M on Jan 21, 2025; total debt increased; total liabilities $258.6M .
  • Going concern and covenant breach disclosure (Total Net Leverage >6.00x); strategic alternatives with milestones under Oaktree amendment .