Dave & Buster's Entertainment Inc Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jake Bartlett - Truist Securities - Analyst : Great. Thanks for taking the question. My question was about the traffic. I assume that your pricing increase, your food and beverage, and your game price initiatives should have driven check-up and price up. So to me, it looks like traffic has decelerated. So the question is, what is driving that deceleration? I imagine it's macro pressures, but I'd like to hear from you. It sounds like your initiatives, you're encouraged by your initiatives, yet it does look like traffic is decelerating at this point. So any comment there would be helpful.

Question: Jake Bartlett - Truist Securities - Analyst : Got it. Great. And then just as a follow-up, you mentioned the improvement in the last five weeks, I think particularly in the last several weeks. What do you think is driving that improvement? Do you think it's more -- it's something that you are doing? Maybe in your answer you can address this -- how some of these initiatives are reaching scale. Maybe just explain exactly which initiatives are getting other than having more remodels, but -- the other initiatives, how are they becoming more and more impactful as the year progresses here and maybe as the quarters progressed in the second quarter?

Question: Jake Bartlett - Truist Securities - Analyst : Great. Thank you.

Question: Sharon Zackfia - William Blair - Analyst : Hi. Good afternoon. I had some questions around the full remodels. When we think about that and the ramp you're having, can you talk about the downtime that you see or the inefficiencies while you're doing the remodels? And then how quickly the labor normalizes once the remodel is complete? I've noticed there does seem to be some labor optimization that has to occur when the new units or I should say the revamped units are fully out there. And just curious on how we should think about that as you ramp this up aggressively.

Question: Sharon Zackfia - William Blair - Analyst : Can I ask a follow-up? I know you just have a handful right now. How are you planning to grow customer awareness of the revamped offerings as this rolls out more broadly? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 12, 2024 / 9:00PM, PLAY.OQ - Q1 2024 Dave & Buster's Entertainment Inc Earnings Call

Question: Sharon Zackfia - William Blair - Analyst : Okay. Thank you.

Question: Andrew Strelzik - BMO - Analyst : Hey, good afternoon. Thanks for taking the questions. I guess my first one -- and then I have a follow-up -- but my first one, there's obviously a lot of initiatives that you guys are working on, and so I'm just trying to think about the sequencing or how you guys are going to be layering those in. And so can you help frame what could be most impactful in fiscal '24 versus what will be more '25 and beyond?

Question: Andrew Strelzik - BMO - Analyst : Okay. That's helpful. And then my follow-up is on the visitation, I guess, between cohorts, specifically your loyalty customers, where you're seeing nice growth in membership there, and the non-loyalty customers. I think you said, if I got this right, that your loyalty members visit 2.5 times as often as regular members. A year ago at the Investor Day, you said that was, I think, 1.5 times. And so you're seeing that gap widen. So I guess is that a function of just the traction that you're seeing with the loyalty members, or are you also seeing moderation in your less frequent customers underneath that? I guess I'm just trying to think about the drivers there and the implications. Thanks.

Question: Andrew Strelzik - BMO - Analyst : Great. Thank you very much.

Question: Dennis Geiger - UBS - Analyst : Great. Thanks, guys. Chris, I wanted to ask a little bit more on some of the customer behaviors that you saw in the quarter in light of some of the macro pressures that you commented on and that the industry is seeing. I know you don't break out the traffic in the food and bev versus the entertainment piece, but anything on spend? You talked a little bit about days of the week. Any additional breakdown on maybe where, where you're seeing more pressure versus where you're seeing less pressure, if there's anything on that front to touch on?

Question: Dennis Geiger - UBS - Analyst : That's very helpful. And maybe just one more following up on the promotional side of things that you touch on there, which sounds encouraging. Just on the food promo, if there's anything more to add there on what you saw in the quarter relative to your expectations? What you attribute that to? And then what that means, maybe on the go forward you just mentioned the midweek promos which sound encouraging. Anything more on promos going forward at a high level on how you're thinking about that? Thank you.

Question: Dennis Geiger - UBS - Analyst : Appreciate it. Thanks, Chris.

Question: Brian Vaccaro - Raymond James - Analyst : Hi. Thanks and good evening. You noted the improvement that you've seen the last several weeks after the first quarter came in below expectations. I guess in the spirit of level-setting trends and reasonable expectations, could you provide some more color on the comps that you saw moving through the first quarter? And how the quarter-to-date trending, or what a reasonable expectation would be as it relates to the second quarter? Could we see comps get back to flat if not positive? Just trying to level set expectations a bit. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 12, 2024 / 9:00PM, PLAY.OQ - Q1 2024 Dave & Buster's Entertainment Inc Earnings Call

Question: Brian Vaccaro - Raymond James - Analyst : All right. That's very helpful. Thank you, Mike. And on the marketing front, could you just level set what was your ad spend in the first quarter? And what level of spend do you contemplate all things today, in 2024 compared to the, I think it was $65 million or $70 million you spent in 2023? Thank you.

Question: Brian Vaccaro - Raymond James - Analyst : That's a helpful color. Thank you. I'll pass it along.