Lucky Strike Entertainment Corporation (LUCK): A Bear Case Theory

We came across a bearish thesis on Lucky Strike Entertainment Corporation on The Lion’s Roar – Outside the Box Investments’ Substack by Dominick D’Angelo. In this article, we will summarize the bears’ thesis on LUCK. Lucky Strike Entertainment Corporation’s share was trading at $9.48 as of June 24^th. LUCK’s trailing and forward P/E ratios were 24.12 and 63.29, respectively, according to Yahoo Finance.

Lucky Strike Entertainment (LUCK) continues to underwhelm investors, with Q3 results and operational trends highlighting significant underlying issues. The company pulled full-year guidance just two months before year-end, driven by weakness in its corporate events business and further confirmed by similar softness at TopGolf.

Same-store sales were down 5.6% in the quarter, with January impacted by California wildfires and corporate pullbacks, February by macro uncertainty and weather, and March showing no rebound. Retail traffic was flat, leagues saw low single-digit growth, and the events business declined by double digits. Despite easier comps in Q3 and Q4, overall traffic fell ~8.5% YoY, undermining the viability of LUCK’s high fixed-cost model.

The F&B business, once a bright spot due to menu premiumization, is now losing steam, with beverage sales particularly weak. The bowling pricing tailwind is also fading as prior benefits are lapped, compounding pressure. Yet, there are early signs of management discipline: cost reductions are materializing (labor costs down 7.3% YoY), and capital allocation is shifting toward high-ROI projects and deleveraging instead of buybacks. The company’s summer pass initiative shows some momentum, with 2025 sales likely reaching $11M, but it still accounts for less than 1% of revenue.

While insider ownership and dividend mechanics provide liquidity flexibility, there’s increasing pressure to cut the dividend to redirect capital to debt paydown. Without stabilization in same-store sales and improved traffic, LUCK may need to raise funds externally in 2026. The business remains fragile, with upside capped until core operations regain their footing.

Previously, we covered a bullish thesis on Xponential Fitness, Inc. (XPOF) by Inflexio Research in February 2025, which highlighted the company’s franchise-driven growth and turnaround strategy. The company’s stock price has depreciated by approximately 2.68% since our coverage. This is because the thesis didn’t play out as expected. Dominick D’Angelo shares a contrarian view in his bearish thesis on Lucky Strike Entertainment.

Lucky Strike Entertainment Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held LUCK at the end of the first quarter, which was 16 in the previous quarter. While we acknowledge the risk and potential of LUCK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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