Dave & Buster's Entertainment Inc Q3 2024 Earnings Call Transcript

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

Question: Jake Bartlett - Truist Securities - Analyst : I wanted to start with Chris's departure and really how we should think about the plan that Chris was so critical in putting together. He's left but the plan remains. How confident should we be that the plan stays as is? Or as you look for a replacement new CEO. What do you look for in terms of attributes that might change the plan going forward. A second part of that question is, what has not gone wrong -- not gone right in your mind. So what needs to be course corrected in terms of kind of what's been executed so far? And then I have a couple of follow-ups. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00PM, PLAY.OQ - Q3 2024 Dave & Buster's Entertainment Inc Earnings Call

Question: Jake Bartlett - Truist Securities - Analyst : Great. And a follow-up, it was very helpful to get that guidance for the year on EBITDA I think it's important for us to understand how sales is driving that. So I'm hoping you can give us a little more detail. I know it's not typical. But on the quarter-to-date November, how it's trended, I'm trying to understand, you gave us a range for EBITDA. How does that correspond in terms of sales? And how confident are you in an acceleration in the same-store sales in the fourth quarter or perhaps not?

Question: Jake Bartlett - Truist Securities - Analyst : Okay. And then just last question just on that point. It sounds like you've talked about higher bookings, you have considerably higher or leased deposits. I believe your deferred revenue is down year-over-year. Maybe just kind of help us understand what we should -- how we should read in terms of deferred revenue. But in the context of that, you mentioned -- I think you're talking about kind of same-store sales roughly being the same as they were in the fourth quarter as in the third? But if you have those special events, a big part of the business, you're seeing some good movement there. why would we expect? And is there something that maybe is walking decelerated or something? Is there an offset that you're seeing that would make us feel like the special events was not going to be driving an improvement?

Question: Andy Barish - Jefferies - Analyst : Hey, guys, and yes, welcome back, Kevin, at least on the call. Darin, just on the calendar shift benefit within that guidance, again, without having to parse it too much. assuming the negative impact of the third quarter flips around in the fourth quarter, and I know it doesn't fully offset an extra week, but can you give us some sense of sort of or at least what's going on with that shift in the 4Q?

Question: Andy Barish - Jefferies - Analyst : Yes. Very helpful. And then just maybe nitpicking here, but obviously important as you move into '25. You didn't kind of give a sales increase in the fully program remodels? And prior to now, I think you guys have kind of said, hey, we need and are seeing a double-digit increase to justify the returns on a, let's say, a $3.5 million investment. So is there anything that you're seeing that's not generating similar types of returns? Or are you just kind of being a little bit more conservative right now? I think that's an important area just to kind of help parse out here?

Question: Andy Barish - Jefferies - Analyst : Okay. Helpful. And then just finally, I know things are in flux and the annual budget is probably being worked on, but there's some discussion of 60 fully programmed remodels for fiscal '25 coming up. Can you comment on that at this point? Or would you rather hold off?

Question: Sharon Zackfia - William Blair & Company - Analyst : I guess I wanted to ask about the brands and kind of your research with your core customers on where the relevancy is of the brand at this point? Where you think that can improve? And then on the remodels, I would be interested in hearing about the utilization of the social base?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : My first one, I know that you continue to talk about the strong returns you get on the new stores. But I guess just as kind of they're implementing all these things and doing the remodels and going down the path of repositioning the business. Is there any thought to pulling back on the store-opening pace temporarily to focus on the core for a period of time and kind of get the comps in the right place, improve the cash flow profile? I know you talked about kind of getting with the board to talk about capital allocation priorities. So I'm just wondering if there's any consideration to that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00PM, PLAY.OQ - Q3 2024 Dave & Buster's Entertainment Inc Earnings Call

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Okay. And then my other question is about the marketing optimization, which I think if I go back to the original Investor Day deck was identified as the biggest revenue and EBITDA opportunity amongst all the things that you guys have identified. And it sounds like we're kind of still a work in progress towards that. So from here, I guess, what's the pathway? When do we start to see that full expression of the marketing optimization really flow through and start to realize the benefits of that? How far away are we from that driver really playing out?

Question: Dennis Geiger - UBS Equities - Analyst : I'm curious if you guys could talk at all about the Friendswood location, sort of just the latest update there as it relates to year. And then if anything else to share on those remodels, I'm sort of -- I know it's early days for many of them. But just on the trajectory of the performance following the initial open as it -- are they generally especially phase one? Are they generally tracking in line or either perhaps better than your expectations? Just how that's generally looked if there's anything notable to call out there?

Question: Dennis Geiger - UBS Equities - Analyst : No, that's great. I appreciate that. Just the second unrelated question, if I could. Just looking back at 3Q, and you guys called out some of the pressures, some weather and different things and clearly the macro, just curious if any other notable observations. Are the macro pressures still generally impacting visit patterns, spending patterns in a generally similar way, again, if you kind of cut through some of the noise maybe on some of the call-outs that you mentioned? Any kind of notable changes in those behaviors, visits, spending, et cetera, better or worse, generally similar?

Question: Todd Brooks - The Benchmark Company - Analyst : First question, just following up on Dennis' question, Darin, if you look at kind of some of the pressures that you called out in the third quarter between the calendar whether the remodels. Can you size maybe what the bucket of that pressure meant from a same-store sales drag? And then on the remodel portion of that drag, are the remodels taking longer than expected or where it was a bigger than expected drag versus what you thought going the quarter?

Question: Brian Vaccaro - Raymond James - Analyst : Darin, you touched on it a little bit earlier, but your review of the advertising and the shift away from linear TV in recent years. I'm curious just how much of a role you think that's played in the company's negative comp performance if there's a way to kind of frame that high level.