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Description of Business and Significant Accounting Policies | 9 Months Ended
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Mar. 29, 2026
Accounting Policies [Abstract] |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Lucky Strike Entertainment Corporation, a Delaware corporation, and its subsidiaries (collectively referred to herein as the “Company,” “Lucky Strike Entertainment,” “Lucky Strike,” “we,” “us,” and “our”) is one of the world’s premier operators of location-based entertainment. The Company operates location-based entertainment venues under several brand names. Our AMF and Bowl America branded locations are traditional bowling locations, while our Lucky Strike and Bowlero branded locations offer a more upscale entertainment experience with lounge seating, enhanced food and beverage offerings, and elevated customer service for both individuals and group events. The Company also operates other forms of location-based entertainment, including Octane Raceway, Raging Waves water park, Shipwreck Island water park, Big Kahuna’s water park, Wet ‘n Wild Emerald Pointe water park, Raging Waters Los Angeles water park, Castle Park and Boomers Parks locations. All of the Company’s locations are managed on a fully integrated and consistent basis, as all locations operate within the same business of location-based entertainment. Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2025. Principles of Consolidation: The condensed consolidated financial statements and related notes include the accounts of Lucky Strike and the subsidiaries it controls. Control is determined based on ownership rights or, when applicable, based on whether the Company is considered to be the primary beneficiary of a variable interest entity. We use the equity method to account for investments in which we have the ability to exercise significant influence over the investee’s operating and financial policies, or in which we hold a partnership or limited liability company interest in an entity with specific ownership accounts, unless we have virtually no influence over the investee’s operating and financial policies. All significant intercompany balances and transactions have been eliminated in consolidation. Segment Reporting: We manage our business activities on a consolidated basis and operate as a single operating segment: Location-based entertainment. The Company’s Chief Executive Officer, Thomas Shannon, is the Company’s chief operating decision maker (“CODM”). The CODM reviews the financial information presented on a consolidated basis since the Company provides its offerings and views key metrics, costs and margins similarly among our various location-based entertainment venues. As a result, the CODM assesses performance and allocates resources based on net income (loss), as reported on our condensed consolidated statements of operations. The CODM manages and evaluates the results of the business in a consolidated manner to drive synergies and develop uniform strategies. Accordingly, key components and processes of the Company’s operations are centrally managed, including location acquisitions and development, customer service, marketing, human resources, finance and accounting, legal and government affairs. Segment asset information is not used by the CODM to allocate resources. The operating financial results along with significant segment expenses and other segment items are presented on the Company’s condensed consolidated statements of operations. Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the balance sheets, statements of operations and accompanying notes. Significant estimates made by management include, but are not limited to, cash flow projections; the fair value of assets and liabilities in acquisitions; derivatives with hedge accounting; share-based compensation; depreciation and impairment of long-lived assets; carrying amount and recoverability analyses of property and equipment, assets held for sale, goodwill and other intangible assets; valuation of deferred tax assets and liabilities and income tax uncertainties; and reserves for litigation, claims and self-insurance costs. Actual results could differ from those estimates. Change in Estimates: During the first quarter of fiscal year 2026, management conducted a review of the estimated useful lives of fixed assets due to operational changes, improved maintenance practices, and technological enhancements that are extending asset durability and reducing wear and tear. As a result of this review, the estimated useful lives were revised to better reflect their estimated future economic benefits. The following table shows the impact of the changes in estimates:
|  | Three Months Ended |  | Nine Months Ended
|  | March 29, 2026 |  | March 29, 2026
Decrease to depreciation expense |  | $ | 8,157 |  |  | $ | 23,942 |
Increase to net income or decrease to net loss |  | 8,157 |  |  | 23,942 |
Increase to net income or decrease to net loss per share |  | $ | 0.06 |  |  | $ | 0.17 |
Fair-value Estimates: We have various financial instruments included in our financial statements. Financial instruments are carried in our financial statements at either cost or fair value. We estimate fair value of assets and liabilities using the following hierarchy using the highest level possible: Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities. Level 2: Observable prices that are based on inputs not quoted on active markets, but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash equivalents. Prepaid Expenses and Other Current Assets: Prepaid expenses consist primarily of payments made for goods and services to be received in the near future. Prepaid expenses consist of sales tax, insurance premiums, deposits, and other costs.
| March 29, 2026 |  | June 29, 2025
Prepaid expenses | $ | 25,104 |  |  | $ | 17,731 |
Non-trade receivables | 11,148 |  |  | 10,087 |
Other | 2,031 |  |  | 1,548 |
Total prepaid expenses and other current assets | $ | 38,283 |  |  | $ | 29,366 |
Equity Method Investments: The aggregate carrying amounts of our equity method investments was $25,890 and $25,841 as of March 29, 2026 and June 29, 2025, respectively, and are included as a component of Other Assets in our accompanying condensed consolidated balance sheets. Substantially all of our equity method investments consist of a limited partner interest in a subsidiary of VICI Properties Inc. (“VICI”). Equity method investments are adjusted to recognize (1) our share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) additional contributions made or distributions received, (3) amortization of the recorded investment that exceeds our share of the book value of the investee’s net assets, and (4) impairments resulting from other-than-temporary declines in fair value. Cash distributions received from our equity method investments are considered returns on investment and presented within operating activities in the condensed consolidated statement of cash flows to the extent of cumulative equity in net income of the investee. Additional distributions in excess of cumulative equity are considered returns of our investment and are presented as investing activities. Derivatives: We are exposed to interest rate risk. To manage this risk, we entered into interest rate collar derivative transactions associated with a portion of our outstanding debt. The interest rate collars, which are designated for accounting purposes as cash flow hedges, establish a cap and floor on the Secured Overnight Financing Rate (SOFR). The Company's interest rate collars expire on March 31, 2026. For financial derivative instruments that are designated as a cash flow hedge for accounting purposes, the effective portion of the gain or loss on the financial derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the forecasted transaction affects earnings. Gains and losses on the financial derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. The interest rate collar agreements effectively modified our exposure to interest rate risk by converting a portion of our interest payments on floating rate debt to include a cap and floor, thus reducing the impact of interest rate changes on future interest expense. See Note 7 - Debt for more information. Net Income (Loss) Per Share Attributable to Common Stockholders: We compute net income (loss) per share of Class A common stock and Class B common stock under the two-class method. Holders of Class A common stock and Class B common stock have equal rights to the earnings of the Company. Our participating securities include the Series A preferred stock that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock, but do not participate in losses, and thus are not included in a two-class method in periods of loss. In periods where the Company reports a net loss, all potentially dilutive securities are excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and accordingly, basic and diluted net loss per share attributable to common stockholders will be the same. Dilutive securities include Series A preferred stock, earnouts, stock options, and restricted stock units (“RSUs”). See Note 14 -Net Income (Loss) Per Share. Emerging Growth Company Status: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult because of the potential differences in accounting standards used. We will lose our emerging growth company status on June 28, 2026, which is the last day of the fiscal year following the fifth anniversary of Isos’ IPO (March 5, 2026). Recently Issued Accounting Standards: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures through the standardization and disaggregation of rate reconciliation categories and income taxes paid in both domestic and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be applied prospectively, with early adoption and retrospective application permitted. The Company adopted ASU 2023-09 in the first quarter of fiscal year 2026 and the adoption of this guidance will result in updates to annual disclosures to adhere to the new requirements, but will not otherwise have a significant impact on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. We are currently evaluating the impact of this standard to our consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal Use Software (“ASU 2025-06”), which will improve disclosures surrounding internal-use software and the timing of capitalization when companies use the incremental and iterative development method. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and is to be applied prospectively, with early adoption and retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

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