Bobby Lavan: And Matt, it’s Bobby. Like when I look at December, we took 2 points on retail. We look back at it after 4 weeks of running and we saw no consumer pushback. So we rolled it out in events in January and events is up 3% in January. So the consumer is not pushing back on our price movements. And frankly, they see the value in what we’re charging. And so ultimately, we feel like the opportunity to continue going where we increase price in some places, potentially like increased shoe pricing, maybe lower the price of bowling, but increase the price of food, like there’s just a lot of opportunities to continue taking wallet share while giving the consumer a premium product.
Matthew Boss: Great. And then, Bobby, maybe just as we think multiyear, what’s your level of visibility to the new unit pipeline for next year where we sit today? Or just the potential opportunity to accelerate new builds and just how you view the white space opportunity in the highly fragmented Bowling center total addressable market?
Bobby Lavan: Yes. Well, we look at the white space as the total entertainment market. So you can see in our press release, we’re moving away from the word center. We’re moving towards locations. The white space is significant. From a new build perspective, we’ve got at least five a year for the next few years. And remember, these new builds, they come in at $7 million, $8 million versus our average unit value is $3 million. So for every new build that comes up, it’s effectively three smaller acquisitions. On the acquisition side, the bid-ask hasn’t really come in yet. So we’re kind of building dry powder while we expect a little bit more volatility in the entertainment space over the next year. So I don’t want to get pinned down by sort of unit count and unit growth, but we are building dry power when we expect sort of the ask to come down.
Matthew Boss: That’s a great color. Best of luck.
Operator: Your next question comes from the line of Eric Handler from ROTH MKM. Your line is open.
Eric Handler: Yes, good morning. Thank you for the question. Bobby, you spoke about increased payroll costs in the quarter on a same comp basis. I’m curious, is that what weighed on your gross margin on a year-over-year basis? And as that anniversaries itself, I believe you said at the end of the March quarter, does that allow gross margin then to start improving in fiscal ’25?
Bobby Lavan: So there are two things that weighed on our gross margin. So there is $6 million of payroll in the comp centers that ultimately cost us about 200 basis points on gross margin. The bigger one, and I want to just give these numbers is that Lucky Strike and the new acquisitions did $14 million of EBITDA, but they have $8 million of D&A. So you effectively have $6 million of gross profit on $41 million of sales. So the M&A accounting does depress our gross margin. But ultimately, when you use a seven-year formula for D&A for a business that is 50 years plus, it’s kind of skewing it in the short term, but it will benefit in the long term. If I think about D&A, last quarter on acquisitions, it was $4 million, now it’s $8 million. Additionally, in the quarter, we had $1.4 million of D&A from we closed West Nyack Lucky Strike. So we are being very focused on cash flow and performance, but it does create some noise in the numbers.
Eric Handler: Okay. Great. And then the implementation of a dividend was a nice surprise. I’m curious what made you decide now is the right time to increase capital returns, complementing your buybacks with now you’ve got this dividend. At the same time, you’re increasing your investment spending. So maybe you could talk a little bit about your balance sheet.
Bobby Lavan: Yes. So I joined here in May. And I have been unbelievably impressed by sort of the cash flow generation of this business in the second quarter and third quarter. We discussed that internally. When we look at all of our different outflows needed over the next few years, M&A, conversions, new builds, and we looked at our liquidity, and we had ample liquidity to continue buying back stock and pay a dividend. And so it’s effectively, we’re really excited about where the business is, but we’re much more excited about where the business is going and sort of the exit rate on FY ’24 and just the opportunities in capital. And frankly, there’s more capital if we want to bring it in. But right now, we’re still sitting on a lot of cash. So at the end of the day, we’re going to reward shareholders and continue to invest in the business.
Eric Handler: Great, thank you very much.
Operator: Your next question comes from the line of Eric Wold from B. Riley Securities. Your line is open.
Eric Wold: Thanks, good morning. Two questions kind of a follow-up on prior comments. I guess, Bobby or whoever going to take it, I guess, on the average of 2% price taken in December, I know you talked about kind of going in various forms from possibly shoes, food and beverage, bowling. I guess, what drove the decision in each market or each center to make specific pricing moves, you’re going higher or lower, were there competitive offerings in the market? Was it the specific trends of that location kind of what drove each decision on pricing?
