PLAY - Earnings call transcript Q3 2021 | Dave & Buster's Entertainment, Inc.

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Operator

Good afternoon, everyone. Welcome to the Dave & Buster's Entertainment Incorporated Third Quarter 2021 Earnings Results Conference Call. Today's conference is being recorded.

Now, I would like to turn the conference over to Scott Bowman, Chief Financial Officer for opening remarks. Please go ahead.

Scott Bowman

thank for and us Keith, you, you joining all today. Thank

prepared Kevin on Chief Chief our being happy recorded today’s & call me of Entertainment questions. Sheehan, take Operating we'll your to call After on Manning, Joining is Margo Incorporated are Interim and This copyrighted. be and Executive Officer. Dave behalf comments, Buster's Officer; is

our of and statements your in on based subject factors Before company's been of results, from various are and SEC call our on XXXX. our our future our considered to be All the that and fact discussion which website. the which the uncertainties those items are the statements filings to have available these items with meaning results attention of begin such on certain to anticipated. are Act the Private to events risks risk cause relating we like to uncertainties discussed Any questions, Reform may Securities to responses actual could remarks I'd on within differ forward-looking which should in historical be Information facts. entirely forward-looking not published the Litigation

is under financial review in today our measures Principles. Accounting comparable addition, available contained results these announcement our the references also GAAP reconciliation In on not non-GAAP defined earnings our this of will should include Generally the that remarks website. to which afternoon, Accepted are Investors measures released to

Now, I'll turn call Kevin. the over to

Kevin Sheehan

point story. Dave in new everyone. Good role morning, be our here Scott. at central Buster's this I'm & this very to excited at Thanks, in

talented to talented who delivering exceptional And continue our business outstanding our model, service add a group team of members experiences an are to to We guests. we organization. and individuals strong assets have and

markets. are impressive record impending outstanding Buster's role Development. businesses Bautista newly of tuned and and we an & I the internationally, and Head Antonio the As Board our SVP to Antonio behalf team service. a track is Scott’s of Dave experience release, be the International consummate stay him Also, He replacement. to person welcoming to brings D&B for right created will fill thank team we take the believe to management separate and press efforts on announced a of growing on missed. to greatly his international and for his of want Scott has CFO been announcement outstanding the

back a know, business. potential substantial there of we to building the made sales, great unlock know reopening to you As this we lot progress is have also in and more but do

a release, As said in growth new our I here are we innovation, and Buster's. Dave at & press beginning creation phase value of

I you Let me mean. with share what

stores We have destination scale, a high great traffic, and volume team, in areas. significant a passionate brand with accretive trade high

accelerate traffic entertainment potential stores’ are on our our sports returns growth, in to intent and stores, our to full to Our accomplish performance optimize organic current brands. to will is while This incremental In accomplished our existing the our of by goal, order laser-focused be growth. optimizing we to continuing drive broaden to innovation this sports and sports experiences, option improvements class more viewing new on environment including to stores. watch respect we to betting the offering in permitted. organic best With will fantasy of and include as addition achieve immersive the

extract our of are peak initiatives evaluating to opportunity a more also out in value existing off stores. variety our of significant and days traffic We dayparts, and see drive to we

the capitalize new, also And opportunities To a a we legacy we fresh accelerate our can will evaluating games organic where in locations. our one best-in-class our Finally, a potential more has of stores that replacing marketing in refresh supported more of ago its strategically become rollout relocation will located that growth, relevant stores open square will store parts higher of less campaign. markets fuel optimal possibly plus in market. town three. summer new are nearing we town in help term accelerate two efficient store of give remodel and of XX,XXX Think growth program significant stores and one that that XX built we a foot the with end look. one amplify part arcade that years equals lease some on with by Think existing

their to continue to will potential. layouts optimize we Finally, store market sizes our and refine

showing than company. brand's coming are future We in meaningfully are the anticipated. area will in excited this recent making progress returns potential This and expand about of significant this years. much our results higher very I'm

third you will as And a upside. update to way the expectations At our After Margo cover is our to potential. third quarter on thoughts going that our Scott? we COO, meaningful are share and can from Scott results, our this on for Manning see have quarter some results We that quarter. fourth realizing on our operations. time,

Scott Bowman

Kevin. Thanks,

relatively with quarter. the compared third for compared XXXX, we experienced COVID headwinds, Our our sales EBITDA increase to in demonstrated the significant the XX% Despite XXXX. the flat improvement adjusted increased drive XX% in quarter eclipse with which with and related period comps profitability same ability second

grow more with impacts proactive see menu continue higher and these linear commodity efficient amusements have the we marketing more mix headwinds operating a to have from of enabled through labor and due and preopening effective fewer offset and investments. store lower model a margins, by continued new We open. model inflation, from price adjustments, to expenses to and benefit Even wage technology,

of levels for stores COVID pleased our recent Events, are benefiting Special and we restrictions, the forward, new to from initiatives. the return to of removal to return Looking and efforts

total the in comp all had located stores, experienced a we mandates. vaccine and associated stores and during sales, X.X% vaccine excluding quarter. at experienced the XXXX, softness Delta quarter we variant X.X% mask growth negative third with the comp mandates that due Including markets X comp and to X.X% compared a For reflecting

the impacted XXXX, compared has August, comps strong XX% sales in walk-in in X.X% business X.X% post mandates lag had quarter. overall although stores By comp X.X% more at negative Special with Our located events. that which and September significantly markets Events excluding in our during to in continued at X%, corporate fewer October, X to comp the continued vaccine been negative month, our by were

in EBITDA sales XXXX. XX% mix of and was comp to shift denomination more comp of amusements of Adjusted secured nearly WIN! efficient operating a higher XXX Cards. XXXX, quarter, revolving had quarter, performance $XX.X as amusements bonus marketing XX% $XX was our of in of substantial to with minimal XX.X% XXXX. labor cash notes, on ended end period leverage our the quarter due We which debt plan, improved the The XX% explained increased compared the million beverage of payout portion maturing Power compared first compared the in $X.XX due This and lower a with payment the cash and in positive and same year. XXXX. model of despite semiannual which of basis and our in resulting a business. million XX% a was zero of or done which was our results EBITTA secured overall per to period costs. had this the XX% for XXXX our higher Regarding long-term with continued of mainly mix, mix, a quarter than EPS Events senior other and of mix XXXX, negative margin because $XX.X million the with due was flow outstandings $XXX facility. quarter discounting primarily points a diluted previously uncertain driven higher with at for by on in and the to same was reflects $XX.X senior a on Net significant higher adjusted Food compared generated the positive we million income our Special interest was was merchandise redemption in the the the in which receipt half Total These notes million environment share. consisting

we XX% quarter, Subsequent we million another the bringing resulted redeemed will million. $X.X quarter, third to million redeemed balance the notes notes, notes which of of During interest. in but million to annualized save our in the senior conscious $X.X end secured $XXX the redeem to expense a our $XX

second million interest million The the in annualized in expense will savings. $X.X redemption same result and $X.X

new year. Overall, quarter financial X openings of XXX very total footing X with the pleased are year and quarter us the additions, of during store new allowances, we $XX net in quarter. tenant York, and X into going to with we Brooklyn, spending capital the we a sound New results stores fourth fiscal store bring quarter of capital finish additional of third an have In which year. the relocate will established new plan open we store to Turning million final by the to the the the in opened and X end and invested to existing relocation,

fiscal Turning fourth like for some XXXX. to insights offer would of outlook, our the I to quarter

compared sales which XXXX, for be Events our five the with continues sales Special X.X% first by to trends business. negatively our Regarding comp impacted have weeks been

walk-in And Our on start. the by quarter are to up basis. is we date XX% business the strong encouraged

holiday be typically to Special when of business we remainder higher in for impactful softness Events the We continued which in quarter, due the the parties. more expect the much will penetration have December a

million improvements Overall, the we levels. From to million adjusted and impact will $XXX net continues XXX XXXX. to that higher produce invest growth, by in a expense with New allowances positive. experience at fall profitability, CapEx approximately In drive quarter. impact in and holiday a an XXXX period a more $X.X cash commodity or a tenant above flow business. as approximately to with expect compared expect execute and year, XX% basis result to the the and time Friday, our XX% quarter of heavily in be same stores From for EBITDA fourth expect summary, replacements. to we'll and Saturday negative in slightly both in on and team fourth have we on periods. new perspective, investment we'll Wednesday standpoint, and our period slightly increase compared to This our points the marketing, of wage negative due approximately upgrades sales a revenue dedicated with approximately impacts expect games infrastructure calendar to significant holidays current these inflation a from in we our Additionally, invest stores, we margin Including existing to for in holiday be XXXX. shift estimate Year's to the comp XX% a key Christmas organic improve this Tuesday, We initiatives

year with progress the well XXXX. are and positioned to our we as are pleased finish and look forward We

which makes the it team, the wish what and Dave Now, memories before take Margo. I'll the heart and The Dave the I pleasure the & past plans truly & years. friendships of for And like entire I’d like team here. honor Buster's to at I to turn and will Buster’s best half will in that, it many turn over it successful. my company two away to Board been am and time just And a from confident that say I outstanding is be over place, And company it’s in With future. has to the to a work Margo, with for successful. I the to all continue Directors of would the my

Margo Manning

Thank you, Scott. And good afternoon, everyone.

third give insights our operating Let the update you on an me initiatives. into some key and provide results quarter

and refining We new beverage drive continue entertainment offerings, be sales to and executing service store on enhancing model our laser-focused and operations, simplifying to our food profitability.

Bleu additions, we such our Ravioli, Apple celebrate Tart limited la a by excited time offerings winter Cajun our delicious as offers the seasonal time menu season. Butternut & our Regarding differentiated limited introduces offer holiday BBQ a Shrimp, to Black Mode Squash and food new Flatbread, are

beverage to Turning our menu.

quarter to the such Old and and Peanut limited have be launching our We'll Trivia programming. featuring flavor curated relevancy several the experience, and successfully Butter targeted to offers add overall entertainment Drink! we themed drive as markets. Geeks beverage expand dozen in Punch, QX, appeal a Fashioned and an are elevates QX improves profiles tests and a Shoulder venue with enhancements menu’s beverage have this reach We Night that hosted beverage tightly Monkey offerings test refined new our with We sales. appeal. time the that more launched of and expanded Who to In effort the determine

interactive energy at The and with the We test stores set NC’s complete has entertaining game guests giveaways and during events before with out guests. the experience breaks prize with have our also our to amplify activities football created a resonated halftime. that in D&B games, commercial hosted

tests offerings. QX appetite have and QX entertainment an Our our guests indicate new that for

giving we tune more to goal with continue So to will these fine offerings the visit. our of guests reasons

competitive shows Game twists parties, Nights Bingo New nights. programs karaoke and on and and Improv our Murder tests and Mystery Standup include

Moving to our QX marketing campaign.

life. address the including result January program, we've encouraging enter $XXX,XXX D&B We for campaign, every app, day e-mail during sweepstake per XXX,XXX or once November D&B promotion welcome gives excited new free to new to Winner captured. linked is of rewards seen which with an to This a guests over and incentivizes for X, XX. prize, to X, The a launched our this earned about weeks miles November back deepen bestow for our of by on with will games incentivizes the day unique are the games The chance member airline and when are began connection Everyone's gameplay status XXX% winning rewards played benefits guests change brands. similar programs that playing Through and X-tier that flown. the to that November a period. beginning very promotion on come win Guests applied, first XX through X the

While in-store challenges, of the we already early, guest loyalty some quickly our have have promising tackling guests concept and seen it's embraced engagements.

front. people challenges a we labor seen handful market in difficult, remains the have The and our On markets. stacking of

However, third low brings quarter the typically volumes. seasonally

tablets less we need So our completely new up our ramped hiring platform a of guest our stores efforts the team busy contactless The experience. model The and pressure we that to staffing. service is rollout more we and order-pay the And brand-wide in-store attract to service combines for overall with complete talented holiday model have a new enable members web in regards mobile to experience. season. a provides saw integrated

pleased the for according to workforce. drive Medallia, insights guest report U.S. our our from so survey service am to completed wrap feedback, To continuously over average improved further models now up, how to identify can first in than engagement current months. we higher through I our we our leveraging employee Gallup, guest refine recently that levels an are are XX we've engagement And the XX% experience. that We

are Our high team our in stores, is responsible their we bringing every day fun engagement. and of level the for to life of proud

experience. to Lastly, want their I commitment thank entire for guest our family D&B the to

for the meaningful brand I'll to passion hand now back a call Your over the you. Kevin, makes difference. And

Kevin Sheehan

Thanks, Margo.

numerous as post-COVID requirements, will As our we business. despite results labor the in third are each delivered a helping event a environment quarter forward more you to pleased headwinds, lagging the tailwinds, in chain mask special and vaccine the these and we look heard, pressures, We have of age including challenges with supply normalized fuel business. to seeing headwinds future become further mandates,

potential an earlier, talented As meaningful and I a said we assets to have and upside on exceptional business model, There's we laser-focused strong this reality. that company, for are team. driving

extremely beyond. and Our team XXXX about prospects the excited XXXX well for is and

Now let's your questions. take

Operator

Instructions]. [Operator

Barish Our Jefferies. first with from Andy question

Andrew Barish

maybe get me then and for real Let one for one in Brian, quick. Kevin

focus business, of the that day on Interim announcement are in in as obviously, today. any and Kevin, from you forward, that a going be occupy I place about CEO the programs to given going involved Just, And were being be areas you under we But kind closer should the seeing in other is you thinking the CEO? prior out, international confidence put day role? what assume gives the

Kevin Sheehan

Sure.

by Let enables thanks saying, explain bit me for to question. little me that start actually here. a It

possible. fresh most you this and of the my odd my I'll start by a of you and X -- As let some the experiences. and give know and in everything is at on determining strength: me perspectives coming look taking past saying, just

growth, then successful second employee-owned that years later Rental rental We brand, you that was very and came to to turned and leveraging invested with overwhelmed its and opportunity IPO. they on margins their brand improvement, I best its into buy where recently and improved cruise of improvement there. outsized values share on be all and responsibilities returned and who and Avis experienced went Scientific improvements, a way. realizing on were towards driving when converted we operational So a car sight] to the was of advantage by Budget, return commercial bankruptcy, brand, increased the another it to Car valuation significantly with Most that organic it X the were of an opportunities I And shareholders the a imagine, taking line, acquisitions brink Each market And as result to the Games, best-in-class. leisure of transaction. at and that and core in can of capital optimized Norwegian was business. substantial [losing

our here, few time very organic a have We having need period optimal and of a a lead very boldly difficult into situation into you COVID. to through the having expect gone action could with position. spring and growth this of then brand We moving back similar as to years

is So glean were was it's lot to of for evening the each It's number daypart. growth experience opportunities ahead. Chairman job broadening opportunities. And here, and you been having I been what a look each Having believed opportunities critical. need And Margo to job on, day. what at understand one. every clearly we going couple and but on to as lie It's mentioned is imagine, the day, the organic Organic able saw can enormous one do her huge the when the And of I hours, months, me you have the here see that opportunities. we call also an and was growth. every during part I of have a every enormous we of what the few enabled of a and and in

on those all of opportunities. be we'll focused So

stores of town refresh from some remodel. take we I in but about and the moving town. a that big and have we taking opportunity might we into different parts could of years also are been more talked about, that it prominent talked where same XX optimal relocations As these couple today, parts of these that in benefit to not of ago, maybe and going are the XX, stores

with some opportunities. that because result, art things there's the alluded where we we those part the of very on can hard of other when sports are that fantasy we bigger sports. great in the betting and the of is to And But that's the a activities to viewing, some that we make economics So have to in first that of get it, that me, in agreement there the to But agreement. best the promotional an get that is sure we're partner agreement. go along and sports working getting to you with opportunity and create the

really second So the this the that's biggest of that going we with to the the initiative, opportunity stay cake They or the step. to then you're you're successful an another on stores, some frequency, where beverage, and going you'll they'll part And have icing people appetizer get have are food additional is will is people bring other offering. longer. more increase maybe if into

benefits side about go think other of as the So that late lounge. evening, with examples, along Also, all dayparts, that. just

So group on know come as we that to about weekends think more get that traffic a and the longer, we experience little people in as bit expand at their a them stores opportunity. have drive to maybe traffic that opportunity DJ stay evening introducing seriously starting and good time. more We're nights to how something, can get or very in of evening. Thursday the a Having looking that people about our people

come what just and coming out the tuned come quarters on, we for as going things of lots So with stay together.

Andrew Barish

the with lot the in getting that that seeing the It's brought life. just for margin improvements on And a shift margin? It's XQ. real just share in awesome. you've the much long-term and look quick like to the with Special and are willing think guide line forward of to kind coming Events talked I about just revenue in of labor things holiday the that. you then, softness on nearly is Kevin. million through Brian, the Thanks, of But you efficiencies $XX us how to the impacting

Brian Jenkins

softness store double that general. the in especially in about Special other Events X hit certainly penetration us hard is impacting quarters Yes. of It's The fourth comp The quarter. the sales. in

historically in XX% So total our XXXX. of about sales it's

The other X%. to quarters is X X%

improving, is So it does just to slower than improve walk-in the impact but us it's more. It business.

we coming walk-in are that the our standpoint. we standpoint there's is that from get-togethers we encouraged business, a bolstering And So a with more walk-in do and that informal business. in kind think are margin seeing in so some are stores. that of From that

the to in are marketing look things quarter, marketing As weakness the fourth But of about Special much heavier QX the a we expect business. $X than also I standpoint, from QX. about to at more much there. you us expand margin in of Part couple a more. don't the is as QX, Events in million in think it

about higher, then impact. a Wage so slightly then And margin just in when you that And fully think, in the quarter that as general, be we we'll fourth think labor be commodity a bit have impact will staffed. we does more costs, QX. think, bit inflation an little will to and well relative

Kevin Sheehan

-- back here I in alluded you out, commentary, the through that benefit to But and in other have figure this Events, its that's The XXXX that's think quarter. our get and about running guys of down thing just and should was growing just size, going and enormous quarter, to levels. Scott normalized Special just this we're but XX% into and -- I under mentioned, fourth we're we're XX% solid a that to the when would you about as XXXX business, point

that's for we very opportunity going if a to in So job us will. which nice provide XXXX, do we correctly our

Operator

Bartlett Securities. Truist Jake with from question next our take We'll

Jake Bartlett

Yes, was my clarification. a first one just

includes I'm the think clear, sales that I the negative slightly the quarter, same-store from holiday the double $X.X impact in positive check. want a shift, the to But I million. for just fourth guidance

would as positive, truly reported it slightly So be correct?

Scott Bowman

Jake. right, That's

Kevin Sheehan

to had here. really what's of power be the that's And Right.

Jake Bartlett

And fourth during other I on lot the quarter. have season. you the just holiday business obviously the know a is question visibility comes the Great. the then of

percent, of base it December? do in, it lot visibility And much side of not in that what down. say, business? Special business. comp like But XX% maybe if share But really how visibility fourth can do the to you 'XX. might much think were Events walk-in the could seem the much? quarter so be It that larger expect that have I percentage have a a from then down up so is sales see you of you does be You on make you

be clarity in what on So you any of helpful. would terms have there visibility

Scott Bowman

Jake. Sure,

the Events month typically, December, off, on of XX% Special numbers, in based XXXX business. of about First the is

Okay? And bookings then we from do that of fair a have visibility standpoint, we a in the visibility business. as see come amount for

our those And forecast, so the trending look numbers as we booking we'll look we at that and at have. that and see how shapes they're forecast

Jake Bartlett

Okay.

what and then go And could have be in now think of you with new -- if And planning going you're marketing what's Maybe kind over then the I'm driving new is windows on terms some think coming? track. the in if the much Okay. not more the Transformers also sure VR. still peak targeted that's I the approach what time. of of amusements, I fourth during you is to sales quarter?

window weighting the fourth the So 'XX? in quarter when does compare of quarter? marketing to the fourth how marketing in the is And 'XX

Kevin Sheehan

Yes.

from I'll off with piece. marketing start the So --

marketing in we started -- a mid-November. our So campaign

weren't that And windows always-on are the will is, we able that and what in really needed get was takeaway to our an go think to so shorter than kind deep almost of enough we of towards XXXX somewhat last And December. to. scenario, because XXXX marketing I here that end we reach had the

shorter affect we're reach, these it we increase having are able is by results. our that seeing seeing and we're what windows to so our And

see we encouraged a we're really strategy what seeing far. so coming marketing we on and a better we're have that and And better creative, so And through.

that second so is next and helping every takeaways we strategy, will shape have as strategy campaign to new continue us campaign us learnings year. are this marketing And we really that the run, really only with help we and and major that for

Jake Bartlett

Great. sorry. my question Yes? last then -- And

Kevin Sheehan

on going about questions to amusement. I follow just was up your

so will event did kind what for new year, And year. Summer of next have amusements this we Games similar to of

a roll of new We several VR will titles. out couple games,

frame. until out be won't Transformers time March So the

over to. ready spring we've Top be in So the it will break. had the looking delay And we're about attraction, And the to past, that then for appears It Memorial is after attraction. Gun talked time launch so we've we of will with Day forward that which that movie, VR our our to attractions out roll shortly delay track The VR the weekend, that to on and or movie movie.

excited of well. will attractions about VR of Summer and as will Games, the be be X several think new we're give and those that supported nice by on we some will as part as well our marketing us that that, So amusements games some traction

Jake Bartlett

Okay. on the remodels comments rebuild. scrapes And question then and is last the and really around

plan be? remodels, you the extensive that how extensive on First, through do to process. you know I went pretty a

depth how it -- be how sales. scrapes. about I forward? to think XX then Is that going about incremental And of to could figure question the you it it from think the that much expect remodel XX. was Or much out the that? is you kind of less than the to I'm trying

next So should expect make Do be we growth for scrapes to net I guidance 'XX. that what guess and I X openings. I think to understand the the for those would rebuild? include year is some trying X 'XX in I'm sure

Kevin Sheehan

-- remodel scope a From cost so those the of vary. and Sure. the standpoint can remodels

which $X a million. be remodel. a is We remodel of full there's mini certain building. and And could kind kind the aspects refresh, refreshes what's of formal million-plus, a the maybe $X.X of have more remodel, called And refresh, which that then full

strategy from to so longer is that programmatic we think XXXX, plan base, even And look about our more as is, term, a approach. beyond our what store at

our to most prudent is of or for refresh full stores start is XXX it we and So to we'll into. each a remodel? a fall those in And have prioritize they what need, stores, terms what of those year stores

sense next will I term long year that to of a we're and need. to a to be thing those the approach, be what here and kind we those will the is of this approach. you what But stores to continue After key of it. remodels, have be think that year we'll to remodel a it we take kind in going need few So better year that of journey tweaks first start programmatic do next that is needs and that that away make of

Scott Bowman

ones critically start stores was will X be the if our And it's level have those are I not need suspect, to approach went then I is first But programmatic years, to -- X you going few fall or that, be, to that through this that to age. stores to. and that and away -- to a group important, to that to the you stick just we And otherwise, be they refresh every add from in easy and attended companies. to

Operator

our Nicole take with Piper Sandler. from question next Miller We'll

Nicole Miller

what kind today, a to to you some for you the of optimize of commodity are menu are inflation able way The question, the as you inflation? example, use about or food offset seeing? first And talked

Scott Bowman

Sure, Nicole.

now, we're inflation digits. right high the seeing So in single commodity

on rolled benefit some as seeing are new menu its so And of we new out the in and the cost. menu, terms structure we of

have response And is menu. helping the menu We're But because guests. we we from so think of change good costs menu themselves. that by We our to getting a that. our just commodity good want offset don't to from

and our put labor from offers improve some of to inflation either to by on to to in technology commodity efficiencies. changes that and leaner been keep or our menu offset the going what done And we've guests. driven stores model mostly be operating would feedback the we inflation, so our limited we've But -- make we overall, able by we're time that any

Nicole Miller

currently? price how there seasonal the is in a increase menu? price much associated with And new the system Was

Scott Bowman

X%, our necessarily We of seasonal more action. seasonal the price menu is about but some take pricing Not a versus with kind board items variety menu across did for the menu. of

Nicole Miller

a the it's we obviously question is a it's just Events but on and drag, clear the last I appreciate And mean space. then it is Special that, rebounding. it's also inverse

it space to And so with is you would something you guest back? something as over the Or different local coming that And the about business think the remodel, there side? social is on do that's opportunity time?

Margo Manning

it's Margo. So I'll Nicole, --

corporate what we're of think we're corporate the that of through earlier. saw So a way. on in been come after in to activity repositioned sales team back pretty in I a the And holiday season indicating is that year business see terms well. you'll upcoming sales as certainly what the team we thoughtful go from seeing sort has But that, the social is seeing side

next we that out flexible, what we programming and So to addition have to can particularly more think conversations about had the because be looking doing. we going Special we're of us. year build terms because look of this excited at very have back as a start And the we about you it's space in that interesting strong bring opportunity bring for we're that it to up the arm be fully how base, it's Events, at

So have it I don't a can broad that be you to as to is in we now, it with frequently utilized more relates we how anything entertaining are right to thought that space share more a but make way.

Kevin Sheehan

Events Special opportunity And it using Margo I important uses. for it's not like still can the Events, for flexible, we're use when for not an is the thing Being opens think we mentioned, but there that Special it necessarily other up either/or.

Operator

next from our Brian Mullan Bank. take with Deutsche We'll question

Brian Mullan

handle I'm many Kevin, opportunity sense think still unit organization I provide have existing stores can whether your Maybe you environment, support long on a growth same-store what's the you're domestically growth over. right of today that of a driving you while normalized over pace the sales in could the consistent U.S. term? the some the can of stores? you that at base a the you at mean long-term taking and do thoughts fresh with of hoping how look taking

Kevin Sheehan

a few pieces question. There's Yes. to that

jump me that of It a out new that ones, let slightly have and use new space. find a concept the then in. to and or So as opens more are optimal for returns lot we smaller stores will these brand. significantly markets up But is better Scott the Margo cover expand maybe us more

of and So we grow years room to to come. years have for plenty

but I The changed attention is have and have of market big, of really is locations good time over conversation maybe that the hopefully, -- has center unyielding the part other the locations because patterns traffic been that it's the the where everybody waned think and focused these historically on is. is big

So stores couple taking the expands them and into converting also of some stores a footprint. of those big

plenty of opportunity. there's So

I refreshing and to system, arrival bit into we're feel new across stores that the big here the think immediately something the and with to opportunity back them we working a that we guest a that the be that have experience, the experience little a think talked That store, that opportunity something thoughtful at there's big that experience. -- so we factor though, comes a relook Scott the they them is in immerse is to coming. I that feel have to about make every on when to make have we opportunity and store to a need sure exciting a each

like have it, tuned in also come in increase and on you of to then do -- So these people the look again. if markets. it the in to those the a a huge we back stores at existing just right, stay and that it stores new the almost that. enables us demand investment try and lot in expands if get traffic come And But

think anywhere. as because -- you ability a we So have were never are when want our say, And we I franchise the way with don't models, to so in franchise so generate this audience think of and an this. to charge going it's but so going we sure uses this, an you getting never complicated on be missed way right market point I we a it. make have the overly person to -- you're for owner, have stores seamless shareholders guests, all blame in anybody, And but And put person to being as and of last frustration, right to the of stated we feel part, we're number get or existing And strongly done, that's we as There's the then a capital each experience still very to the a the lot a we cash And successful. since we as to a we're flow, and attentive balanced of store "Hey, to also I across I when to, much you make think and lot alluded think store markets to very need make thoughtful we there," keeping the all of calls could very, I that need be I calls doing get all cash the are we of to of all here, getting balancing don't this us And get we our it allocation -- be running, the about, of sure year. want build will stores not If sense. the need and a I globe. think around agreements. possible. the that a

when on. then we 'XX, look out in So turn in going that of starts X to top becomes getting the a X, even that but X, it the I'm growth XXXX, to footprint on can into for percent and growth and few years, that it top that you on and in XXXX not economics and or started, a plant getting be And 'XX at rate incrementally line help X, X, our line. seeds

better not okay. a opportunities hope at you'd stores, business, and opportunity. a different to and in each at only or job grow the look not new look to doing only have you answered every I it's XX revenue, but I that, when it's So it's organic

Brian Mullan

And as it you Can then just leverage managing your nature? Yes, that? you to Or share you think the investors that from about see there follow-up, And capital here? be should perhaps color. opportunistic? more programmatic authorization. just be to is plan ratio a of in was how allocation about encouraging expect talk mindful deploying Do a repurchase target as great you was more to approach

Kevin Sheehan

Yes.

on finish year I'm points of me -- almost Let our sure, that, has it's market. that. is But leverage Scott, where some start view and we the a hash

Xx. it's think I

belong? reason to that is every to sure to for -- I'm having have to trying value what to sure shareholders drive to we them, understand that day jobs. It's making the where want come one our of have is what each a and the responsibility. each -- And and I we and office value that of So actually, the to benefit leaders doing does create our we what -- our responsibility every make that

about talked cash, pecking stores So we of you investment have think you of full to bank? now, of do we've in we're when we you that's a and the as including look And And do shareholders smart number where the investment complement and order at at the about on the to building, sentiment allocation that sure talk our And reasons, something for a and et the the stores us and it's the in an in variety enormous have XXXX. incumbent at our business right I managed balance the an cash appropriate Or capital new and balance to sheet. a I'm sit as when still we're in games are of for X industries, look of We back points and the basis shareholders? the do do amount trading multiple, you allows. in cetera. investment of what very existing low return our maintenance, on to

here. a us it see to our down We're and the going to But we thoughtful how more confidence marketplace visibility about So share be we're be lot going for for I our environment reckless makes count. the once to sense some want be bringing not mean shares able and to be buying that, prudent. have in to We improves. shareholders in

Scott Bowman

Yes.

we case. We think to So that we'll we we business, undervalued, and think continue that's and monitor are to want pretty the are the opportunistic. trends we to be close and

have back market And so we point want time when some to flexibility into the at to right. get that the is

leverage have don't As right far as and now. the specific ratio, target we a

will us, needs the in the of lower we've longer will of form more internal a But to are very the opportunities ratio and depends things in of be able those be been future. with help us that happy and here on kind investments, that buybacks opportunities target front leverage, leverage against attain. term, that those like really it balance whether our leverage whether definite and that We

Operator

our next Farmer Gordon We'll with question take from Jeff Haskett.

Jeffrey Farmer

Great.

with move markets quarters? sports were could forward sports to betting how you quickly you Would would theoretically partnership, you if pursue decided to what is, in guys next that betting this several end testing pull guys a for Basically, steps question the include? a you If up the trigger? few

Kevin Sheehan

to players field. get that make couple when we having a relationship, there's benefit right I answers of to by question because the And and relationship. in both we're you to because deep think sure sure a that a want make there's bunch that we deep prominent in of we talking partnership can that develop done, want deal you a

And going right, So done, you're with deal a opportunities of sports to couple it of out. moving test then at sports brand, and least the currently. process place the that's across that betting in And focus see you and once going talk quickly as a course that fantasy already of you And to we're concepts quarters. about are. capabilities you're it through our out constructs the I then to part in with get over start states and the the then more roll the what

Jeffrey Farmer

falling and your to unrelated, your and And read in in traffic of concept we Okay. XXXX just see numbers, then quarters, last Omnicron people over headlines. even you've COVID the as on customer when what's terms case your case terms a back several what been What of -- for on going about or gotten seen Omnicron, about to some of Sort now, the business? rising impact headlines that has customers are have been of where traffic impact trends? COVID

Kevin Sheehan

this We seen at haven't the big with traffic point. to impact Omicron variant our really a

a our As very be impact to and haven't seen we big walk-in really at so I strong, mentioned business the continues outset, there.

that I very be by with we the think Omnicron, expected But walk-in we're business Events business. encouraged fourth Special the softer the strength of our without for or to quarter.

Jeffrey Farmer

versus of that just improvement? terms initiative any in Is quarter-to-date then QX same-store specific driver you or -- sequential the sales performance along sequential Nice there quarter in XXXX. what those And Okay. improvement of drove to question lines. terms that point final

Kevin Sheehan

marketing and out our point to would of things. I program We've new a couple campaign. rolled loyalty our

summer the And trends based condensed to marketing, of due started period the say least that kind of testing it's that that many to that frame. done. business. all the variables, some we've lift is of here in the hesitate some our on time done heavier we some marketing and with because in analysis So of we've more weighting. campaign, our that with we're I we've mid-November some think this campaign seeing to but to our similar good of marketing that due the part seen marketing And at

we think continuing And to that look playing forward is so a part that we strategy. refine definitely to and here,

Operator

We'll take with Strelzik our next question BMO. Andrew from

Andrew Strelzik

times so in when the you upside you over think first points first answer how of there has prior more that you've in time, you one, mentioned, of the XXX think some line but about structural Scott of do be curious the of that, as outlined But I'm how and thinking in margins. of the just margin terms you is, then margin you forward. going My the Obviously, on on improvement. potential there. been I'm And of you're potential just there? Q&A so business. that a the basis prior or of the margin experiences your there's Kevin, the business to sales And Great. the gave the top obviously, focus some potential curious far about that side can separate of through outlook sales when grown strategy well, went those tied volumes the But lot and and the

Scott Bowman

as market and to get good to bit back that bringing done efficiencies conditions. is question. next of and smart going Are cost. at a and costs as things, we improvement little bit to are tremendous reality, headcount a with services a in things getting subject I labor of now. Yes, team in you -- have I looking the team, bring coupled of we the know, back little my some initiatives That, the we goods It's situation, you think is, job, the little The we And is back, a the doing when that -- as lean right it? bit think her experience little got doing going at it? a from A are will at you and the bit Margo I that, though, labor we've today. part to to of we possible? an market of way a has to do point technology Are think be thing, come solutions so year. how stabilize much there's if fresh in noise, step look do commodity If we're

that. start all benefit the is, I to good successful see normalizing we a maybe the from least some are on market from as be we're I working future the the then of So the on as as initiatives behind margins and scenes. think it continuation we get If that organic initiatives, should that we at

Andrew Strelzik

was that Okay. on walk-in quarter-to-date side. XX%, That's I then comp obviously, And growth the I number. the there a helpful. believe was know

significant you check just more to that. maybe growth. But want to you So remember I speak were don't seeing pretty broadly,

forward curious continued And year? could would And evolve. think on you how to kind sustainable be hang go you I'm so of we do to into much or that's next how as

Scott Bowman

still We're been and has prior seeing it's and specialty It's pretty We've cap consistent. amusements significant range. on calls still that amusement. growth on in per close XX%, check been in and our talked to that

get is of and there see reassess And the into of XXXX. we'll like ticket, amusement with then remainder as higher staying for the we we in so feel quarter, that and especially kind power

Andrew Strelzik

that of is than a curious on that reasonable there for color XQ there for Was rate for run kind Okay. moving Just And then of is in any out? Or anything just last question G&A, anticipated which higher was my great. the on we would a bit quarter. forward? to be call and kind

Scott Bowman

to in additional there's million our $X.X about $X a million comp. is, had in about There's additional We One in $X.X about couple of million stock-based severance costs. additional Sure. G&A things and note costs. and bonus

bridges gap So between the this kind really and of XXXX. that year

Andrew Strelzik

Scott, best your I And want you all in chapter. next just the wish to

Scott Bowman

you. Appreciate it. Thank

Operator

take the from William Alex our Blair. we'll last Vasti with day And question of

Alex Vasti

that with quick about the Could start the you held per the how maybe card one and monthly comps Just talk one. on has color quarter. in up? for Thanks spend

Kevin Sheehan

Yes, up than us. is very for per XXXX. XX% card spend, about it's still nicely held higher It

that seen some feel we quarter. staying for power very us confidence remainder give that does we're And the by has consistency encouraged some we've of so the it And that the there.

Alex Vasti

partner international, there? Antonio the And over how planning then how can? frame there, if up recent then with And that are guys guys quickly any do expect taking announcement reach to on you agreements you you size, in opportunity to maybe

Kevin Sheehan

Yes.

getting little go-getter, in in of January the he's and need we things off until ground. getting partners, getting So attracted this china which agreements do was the like et He a are X, realistic, But that a contacts, early. selecting and investment starting the to that 'XX think to I in in a shop 'XX me start to it's to be done, him develop a years but in one getting stuff doesn't relationships, cetera. he's place, bull the and that

So good moving to say, 'XX. And going until see it to from to to point going you're a are XXXX experience, aggressively up it, starts it sized number. the then an as 'XX starts it's you based when January. I EBITDA look being to, be not from ramp that and where in once my And business at see that achievable on I on in model he

Operator

additional Ladies and turn session. question-and-answer today's gentlemen, or your this closing remarks. for to back the does speakers conference conclude like would to I

Kevin Sheehan

listen got happy stay to thanks, just here holidays, us so and We're just We've ask tuned. everybody. really excited. for to a for Hey and huge opportunity much I'd happening. tuned. the the taking Thanks call lots time guys, to you and just everybody, got stay We've

Operator

appreciate participation. Ladies and today's gentlemen, conference. this your concludes We

disconnect. now may You

Dave & Buster's Entertainment (PLAY) 8 Dec 212021 Q3 Earnings call transcript