So, one we talked about on the call is we have raised wages at the centers, about $10 million on annualized basis. That will pay for itself in spades. It just takes a few quarters to flow through. So, at the end of the day, I think sequentially you’re going to see SG&A flat, but you’ll see gross margin go up with revenue.
Operator: Our next question comes from line of Eric Handler with ROTH MKM. Please proceed with your question.
Eric Handler : I had a little technical glitch earlier, so hopefully I’m not asking something that was already asked. But what is the total CapEx outlook for this year? And then in terms of the amount of money you’re spending on upgrades, how many centers does that suggest, and how many centers are actually left in your portfolio to upgrade?
Thomas Shannon : So, there’s about 100 to 150 centers to still upgrade. Like, we make conscious decisions on whether or not to upgrade full league houses. So, you won’t see us put like pin strings into lead cap, sort of, but there’s still a long runway, about $300 million today, and as we do M&A, that does replenish that pipeline. From a total CapEx perspective, maintenance CapEx, which is still elevated, should be about $40 million. Conversions are $75 million. And those are kind of the two primary buckets of CapEx. There’s a little bit of corporate CapEx. There’s about $10 million, but that’s how you should look at sort of our total investment in ‘24.
Operator: Our next question comes from line of Michael Kupinski with Noble Capital Markets. Please proceed with your question.
Michael Kupinski : Thank you for taking my question. Just a quick one here. Obviously, there’s been a little bit of resurgence in COVID across the country, and I was just wondering in terms of your current traffic patterns, are they reflective of that increase or is it more just the macroeconomic trends that you’re seeing that are affecting the traffic patterns?
Thomas Shannon: Yeah, we haven’t seen any COVID, I will say that the traffic, when we look at it on a day-to-day basis, the traffic for full-time retail is flat versus the traffic on promotional activity is down double division. So, we actually think we’re getting the beneficiary of people pulling back a little bit. Like obviously, everybody taking a vacation in August has impacted everyone. But ultimately, we’re feeling actually pretty good about the consumer, particularly with the green shoots we have and more leagues have come back. More events are happening. It really is. We pulled back on promotions too hard.
Bobby Lavan : Let me add, there was an interesting takeaway that we haven’t mentioned, and that is that we effectively raised price with the bundle. We raised prices in events, we raised prices on leagues going into the fall, and all of those businesses increased. Where we eliminated some of the promotions, the very deeply discounted nights, we saw a big reduction. And so, the takeaway from that is that we have a very wide range of customers in terms of price sensitivity. So tremendous insight, right? That some people are really interested in a very cheap all you can bowl on a off night of the week, a Tuesday night, for example. But that the retail, the primetime walk-in customer is much less price sensitive than perhaps we realized.
And so, these insights are very, very powerful. And we took them, we took the cost of learning them in our slowest part of the year. So, if you strip out the impact of the elimination of all of the promotions were effectively flat through the summer, which again, given the general weakness that people see in the consumer, certainly our peers and what we know, and it seems like everyone we know traveled that the results were actually pretty respectable and we’re a hell of a lot smarter now than we were three months ago when we embarked on this process. So, a really interesting insight, where we had the most promotionally focused consumers in the Midwest, we were down by far the most, and where we have the least on the coast, we weren’t really down at all.
And so, we have learned an awful lot about consumer behavior in the last couple of months. I’ll say that.
Operator: Thank you. We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.
Bobby Lavan : Thanks, everyone. We look forward to talking to you soon.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.
