Steven Wieczynski: That’s great color. Second question, whether it’s for you, Bobby, or Tom, but I want to ask about the cost structure at this point, maybe during the quarter. And obviously, it was inflated for a number of reasons that you mentioned. You also called it out in the 10-Q as well. But as we kind of look into now your second quarter and the remainder of the year, just wondering how we should be thinking about the flow-through from here and maybe some other maybe details about how you’re mitigating labor and some of those other cost headwinds?
Bobby Lavan: If you think about our cost structure, our cost structure is – 20% to 25% is payroll. The payroll we’ve been running at, max payroll, that is effectively sequentially will be flat 1Q to 2Q. Another major spend is utilities. Utilities actually goes down about $3 million sequentially into the second quarter and third quarter. The fourth quarter, it’s really air conditioning is sort of the peak-ish cost. And then the rest of the cost structure, we probably have a few million a quarter opportunity to pull back on supply services, repairs, maintenance. We did use sort of the slower time to kind of clean up a bunch of things that just needed to be fixed, but we probably swung a little bit more than we should. So the way I look at cost structure is you should just look at it flat sequentially throughout the rest of the year.
We feel very confident about that. And we really spent the past three months digging into our business and getting understanding of the cost structure better. The one cost structure that we are cutting on is corporate. We’ve taken about $12 million out of corporate so far. Our corporate cost is roughly $25 million to $28 million a quarter, but that is coming down, and we should see more benefits of that in the second and third quarter.
Operator: The next question comes from Jason Tilchen with Canaccord.
Jason Tilchen: I just want to touch on Lucky Strike. Tom mentioned some of the sort of cost synergies that were going to be pulled out by consolidating to your business. I’m just curious sort of what the time line is for when you expect some of those to flow through into the P&L? And then, also on Lucky Strike, what are some of the plans to sort of expand the use of that brand? How do you see over the sort of medium term, the different brands within your portfolio being used?
Thomas Shannon: Well, I think the opportunity is more on the revenue side than on the cost side. When I talked about – we viewed this as 16 to 18 of EBITDA as opposed to 11. That was really the elimination of their overhead. So that’s obviously a cost savings. But going forward, we see the ability to drive event sales in their locations as sort of the key. They have absolutely phenomenal locations downtown in suburban Boston, downtown in suburban Chicago, downtown Denver, Bellevue, Washington, in Downtown LA, Hollywood, Honolulu and Orange County, Downtown San Francisco. So they had an irreplaceable set of assets and we’re very excited to get them. And I think that the early indications are very bullish. We love the name. We did a survey.
We hired Nielsen to do analysis of their brand strength versus Bowlero. We found that their brand strength was about 50% more. And so, we’ve decided that our next handful of new build locations will open as Lucky Strikes and we’ll see how they perform. It’s impossible, obviously, to know how they would have done opening as a Bowlero versus how they’ll do opening as a Lucky Strike. We’ll try and make a determination of whether or not we feel like they were stronger as a result of that brand. But we certainly are bullish on that brand. So Moorpark and Miami will be the first two newbuilds that will open as Lucky Strikes. As I mentioned, we’re investing a lot of capital. Lucky Strikes had been sort of in financial distress for a while. And so, the assets have been underinvested in, and they had become pretty dilapidated.
I failed to mention downtown Philly right in the heart of Philly as well. And so, we’re putting that capital in now as we speak, to upgrade those facilities to sort of return them to their luster, maybe make them better than ever. And I think you’re going to see a lot of revenue performance out of the Lucky Strikes in calendar 2024 and beyond.
Jason Tilchen: Just one other question. You had mentioned during prepared remarks about sort of bringing that sales culture into the center, you talked about that a lot in the last call. I was wondering if you could maybe give a little bit of update on how that’s going and when you expect some of those benefits to sort of flow through in the same-store sales comps.
Thomas Shannon: Well, they already have. That’s why we got an increase on the weekend sales and when we were pushing the special, right, which was an income – it was a third game. Because all of our testing indicated people were bowling about 1.8, 1.9 games per visit. And so, the philosophy behind the special was if we can get any incremental part of a third game, given that there is no variable cost to the game of bowling, all of that revenue is profit. So if we’re charging $8 a game, and I’ll give you the third game for $5 and a $5 arcade card, in a way, it’s almost perceived as free to the guest because they’re getting a $5 arcade card as well for that incremental game, for the incremental $5 spend. What we found is that, that did move bowling revenue higher.
