Dave & Buster's Entertainment Inc Q4 2024 Earnings Call Transcript

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

Question: Andy Barish - Jefferies - Analyst : Just wondering kind of where you've seen the improvements in March and into April here. And just given, obviously, some of the changes and uncertainties that have been created in the economy. Anything sort of up to date in the last week or so that you're willing to share?

Question: Andy Barish - Jefferies - Analyst : Let me follow up. Is there -- I mean, a lot of calendar shifting in a late Easter, and I just want to make sure we're all on the same page, is that -- at this point? Or I just -- yes, I just want to get a sense of where we are with all that going on?

Question: Andy Barish - Jefferies - Analyst : Got you. And then just on the CapEx, I mean that is a -- you just spent $170 million gross in the 4Q. I don't know if the net number in front of me, but the $220 million net, I understand that is net of anticipated landlord tenant improvements. Is there any sale-leaseback, cash against that CapEx as well? I'm just trying to understand, obviously, CapEx has been off because we've been buying some properties and things like that. So just trying to understand how that rolls in.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : My first one I wanted to ask about the Back to Basic strategy and what that means for the cost structure? Are you adding back costs? I know there's been a lot of efforts made to manage the P&L? And what is that -- what is the implication, I guess, for the remodel cadence? You said it would be tempered. So what is your updated expectation there?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Okay. And remodel and sorry, and then I have another question. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 07, 2025 / 9:00PM, PLAY.OQ - Q4 2024 Dave & Buster's Entertainment Inc Earnings Call

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Okay. And then my other question is about the value proposition. So as you've looked at the execution against the strategy, and I know that there -- you referenced some of the pricing that was taken in F&B previously. And I'd be curious for you to address also the amusement side. Do you feel like there is a value proposition issue for the brand? Have you done work around the perception there? I'm just curious as you kind of come back to digging through all the different pieces over the last couple of years, how that, in your view, stacks up?

Question: Dennis Geiger - UBS Securities LLC - Analyst : I have two high-level questions. Kevin, the first one, maybe sort of in light of the comments you've made around unwinding some ill-advised changes to initiatives. Can you break down sort of how you think about some of the recent traffic and sales pressures over the past several quarters? How much of that is macro versus brand positioning sort of versus did if that makes sense?

Question: Jake Bartlett - Truist Securities, Inc. - Analyst : Kevin, my question is kind of back to the idea that you were doing well before -- before some of these changes were made. My understanding was that prior management team was trying to put in place some -- basically some kind of -- some -- some differentiations, some competitive differentiation to really better compete in an environment that was getting more and more competitive. Historically, your same-store sales were before COVID were struggling. So the question is getting back to what you were doing, is that good enough in your view in terms of the approach? Or do you think that while you need to write some of these mistakes that were made, you also -- you still need to figure out how to improve the differentiation and how to become a better competitor for the long term?

Question: Sharon Zackfia - William Blair - Analyst : I guess on the improvement you've seen in March and April, I know you had talked about historically over the past year, seeing a kind of disproportionate weakness with a lower income consumer. Have you seen that consumer improve along with the broader business?

Question: Brian Vaccaro - Raymond Jame - Analyst : Darin, just back to the CapEx outlook. I understand the $220 million net. But what would be the gross CapEx guidance before sale leasebacks? Or maybe you could walk us through the buckets of new units, remodels and then sort of maintenance and other? And then I have a follow-up.

Question: Brian Mullan - Piper Sandler & Co. - Analyst : I just want to ask about the competitive environment in the category. If I were to rewind to pre-COVID, the growth of the entertainment category competitors, it was often cited as a headwind to same-store sales back then by a prior management team. Kevin, you later came as Interim-CEO later on. Obviously, you wound up buying one of those competitors, Main Event. So my question is just, Kevin, as you come back into the seat again, and you look at the current competitive environment, how do you view the landscape? And do you think that the growth of competitors has been a factor to some of the recent top line struggles? Or do you really believe it's all just internal execution related? Just would love to get your perspective.

Question: Todd Brooks - The Benchmark Co. LLC. - Analyst : I'll lump two clarification points together here. Kevin, you talked about a more reasonable approach on the spend of remodels. Can you talk to how much you're able to lower the hurdle rate? I think the old remodels are requiring a low double-digit type of rate to give them to pencil. So how much will that be lowered? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. APRIL 07, 2025 / 9:00PM, PLAY.OQ - Q4 2024 Dave & Buster's Entertainment Inc Earnings Call And then on the TV advertising, if we look to fiscal '25, maybe what's the mix kind of entering Q1 here for how much we're back to TV spend versus digital? And what's your hope for an exit rate coming out of '25?