Pinstripes Holdings Reports 18.9% Revenue Growth, Operating Losses and Liquidity Concerns

Pinstripes Holdings, Inc. reported significant financial developments for the twelve weeks ended July 21, 2024, compared to the same period in the previous fiscal year. The company generated total revenues of $30.6 million, an increase of 18.9% from $25.7 million in the prior year. This growth was driven by a 16.1% rise in food and beverage revenues, which reached $23.8 million, and a 29.7% increase in recreation revenues, totaling $6.8 million.

Despite the revenue growth, Pinstripes experienced a substantial operating loss of $7.6 million, compared to a loss of $873,000 in the same quarter of the previous year, marking a 771.9% increase in operating losses. The net loss for the period was $10.0 million, a significant rise from $3.0 million in the prior year, reflecting a 228.5% increase. The basic loss per share improved slightly to $(0.23) from $(0.38) year-over-year.

The company’s financial position showed a decline in cash and cash equivalents, which fell to $5.0 million as of July 21, 2024, down from $13.2 million at the end of the previous quarter. Total current assets also decreased to $9.5 million from $17.4 million. Current liabilities increased to $72.3 million, contributing to a total liabilities figure of $245.3 million, up from $236.5 million in the previous quarter. The accumulated deficit grew to $(135.8 million) from $(125.8 million).

Strategically, Pinstripes completed a business combination with Banyan Acquisition Corporation on December 29, 2023, which was treated as a reverse recapitalization. This transaction resulted in significant share conversions and the issuance of 23.9 million warrants, which remain unexercised as of the reporting date. The company is actively exploring additional financing options and a capital raise to address liquidity concerns, as it has substantial doubt about its ability to continue as a going concern.

Operationally, the company opened four new locations, contributing to increased revenues but also leading to higher costs in food and beverage, store labor, and occupancy. Management is implementing cost reduction strategies and renegotiating leases to improve financial stability. The company is also facing challenges related to staffing and inflation, which have impacted its operational costs.

Overall, while Pinstripes Holdings, Inc. has shown revenue growth, it continues to grapple with significant operating losses and liquidity challenges, necessitating strategic financial management and operational adjustments.