Dave & Buster's Entertainment Inc Q1 2025 Earnings Call Transcript

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

Question: Andy Barish - Jefferies LLC - Analyst : Just wondering if at this stage, you're able to kind of have some degree of predictability in terms of the trajectory of the same-store sales in the business, maybe kind of how you're looking at it on a multi-year stack basis or anything like that, that may be helpful for us to try to project the rest of the year and what's been kind of a difficult or moving target.

Question: Andy Barish - Jefferies LLC - Analyst : Okay. Thank you, Kevin. And then Darin, it looks like CapEx is very front-end loaded this year, half of your annual CapEx here in the first quarter, you did, I think most of the remodels that are going to happen this year. Can you just kind of give us a sense of what that sort of last fats look like? Or how much you spent? I imagine there was some spending upfront already for arenas and social bays and just trying to kind of get a breakdown of what that CapEx looks like without having read the Q yet, I guess that's -- that looks like it's out.

Question: Jeff Farmer - Gordon, Haskett Capital Corporation - Analyst : Just drilling down on the improved same-store sales trend. Can you share anything in terms of what that's looked like across things like dayparts, week parts, young adults, families, geographies. Anything that sort of paints a little bit broader picture in terms of what you guys are seeing on the improved trend?

Question: Jeff Farmer - Gordon, Haskett Capital Corporation - Analyst : And then just one quick follow-up. Kevin, you mentioned the -- I think it's a new store manager incentive program. So can you just sort of level set us in terms of where you were and what it looks like now?

Question: Andrew Strelzik - BMO Capital Markets Corp. - Analyst : My first one on the improvement in the comp trends, are you able to identify or unpack which of the initiatives that you've implemented have really been the biggest contributors that you saw kind of a step function, whether it's the marketing side or the upside. And then when you talked about having a very clear road map moving forward over the next three or six months, what are some of the biggest opportunities that you think still remain?

Question: Andrew Strelzik - BMO Capital Markets Corp. - Analyst : Okay. And maybe my follow-up. Over the last couple of years, there were a lot of costs that were either optimized or taken out of the business. Is there any sense as you do this work that you might need to reinvest in the business to kind of drive that long-term performance or any areas specifically where you feel like you need to lean in from an investment perspective? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 9:00PM, PLAY.OQ - Q1 2025 Dave & Buster's Entertainment Inc Earnings Call

Question: Todd Brooks - The Benchmark Company, LLC - Analyst : Two for me as well. First, on the gaming floor, and the newness that's been flowed in over the course of this year, where do we stand for a number of new cabinets after whatever has been flowed in for Summer of Games? And then, what's the outlook exiting the year and there was kind of an earlier discussion that there were a couple of years where we didn't touch the game floor. So can we walk through the cadence of how you get the game floor back to the right balance and newness over the next six quarters here?

Question: Todd Brooks - The Benchmark Company, LLC - Analyst : Okay. Great. Thanks, Darin. And then if we're just looking at the same-store sales result for the quarter, I know there's a lot of moving pieces, and you said you were encouraged by the fact that it was predominantly traffic driven the recent momentum. But can you give us any color looking back to Q1 of kind of a traffic check type of split to understand any sort of pricing changes that were made that might have impacted average check? Or just any sort of nuances that could add some more color to the same-store sales result that was reported?

Question: Dennis Geiger - UBS Securities LLC - Analyst : I wanted to first ask, from here, a lot of compelling initiatives to improve the trajectory. Just as we think about some of the ongoing challenges, Kevin. Maybe framing up how you think about sort of macro as a headwind right now versus some of those brand specific or self-inflected issues that you're clearly improving, but that maybe just take a little bit of time to work through. Is it more the latter than sort of the macro that you were in, in your view as far as some of the lingering pressure that's still out there as you work through the fixes?

Question: Dennis Geiger - UBS Securities LLC - Analyst : No, that makes good sense. And maybe just on that, as you talk about getting through and getting to the other side, you gave some comments on the call. I think with respect to -- at a high level, right, as an algorithm maybe long term, I think you spoke about 3% same-store sales maybe longer term on the other side of this. And I probably heard it wrong, but maybe another 1% or so on new stores. Can you -- and then some other things to drive revenue growth you touched on? Can you correct me on the new store comment that you made and what that new store looks like longer term, if you were directly speaking to that?

Question: Brian Mullan, . - Piper Sandler & Co. - Analyst : Just a question on the game side. On the last call, you referenced, I think, the value proposition for the consumer, perhaps testing some things that could extend the time of play. Can you just talk about those tests? Anything you've learned so far, what you're measuring and looking to see and how you'd expect that to progress?

Question: Brian Mullan, . - Piper Sandler & Co. - Analyst : Okay. Thank you for that. And then on the food side, on this call, you've talked about seeing some average check lift from meet and play, which is great. I wanted to ask about just separately. I think you've talked about making some changes to the menu design or configuration. Have you taken any actions on that so far? Is that something you're still working on if you have, how is the consumer response been?

Question: Jake Bartlett - Truist Securities, Inc. - Analyst : I just wanted to start quickly with a clarification, another stab at the question, Kevin, that you made about unit growth. It's so different to think about 1% to 2% growth versus the 5% to 6% growth that we've seen in the last -- that's guided this year and we've seen recently. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 10, 2025 / 9:00PM, PLAY.OQ - Q1 2025 Dave & Buster's Entertainment Inc Earnings Call So is that the message that you guys are really rethinking the unit growth trajectory of this business and focusing, I think that would mean you're focusing more on same-store sales and free cash flow generation. But I just want to make sure it seems like a really a big change if that really kind of is what you're trying to communicate. And then I have a couple of follow-ups.

Question: Jake Bartlett - Truist Securities, Inc. - Analyst : I really appreciate that. And my other more real questions are -- on -- what should we expect in the next month or two? I look at kind of the May and the performance is really strong and impressive to see that improvement. I want to understand better what is happening in June and July from here. The games that were mentioned, I believe the new ones that came on -- have been in place throughout the last five weeks so that those are going to be included. I think maybe Summer of Games marketing starts. But just to understand what changes from here to potentially, I would think, drive maybe an improvement from here?

Question: Brian Vaccaro - Raymond James & Associates, Inc. - Analyst : Just two quick ones on margins, if I could. First, obviously, in the first quarter, there was the sales deleverage in the margins. But can you unpack the other OpEx line a bit more for us? And are you expecting -- I think there was some higher [ad and maybe some R&M], but are you expecting those to continue into the second quarter or rest of the year?

Question: Brian Vaccaro - Raymond James & Associates, Inc. - Analyst : All right. Thank you. And then if I could just follow up on just the comps themselves and the trajectory here. Any color on walk-in versus your events business? I know there's been some investments in new SaaS and team members to lead to special events business. So any color there? And then any color differences between Dave & Buster's and Main Event because I think a lot of these initiatives are focused on Dave & Busters. So any differences worth noting there?