Q4 2021 Dave & Buster's Entertainment Inc Earnings Call
Good day and welcome to the Dave <unk> Buster's Entertainment incorporated fourth quarter 'twenty 'twenty. One earnings results Conference call. Today's conference is being recorded now I would like to turn the conference over to Michael quite hairy Chief financial officer for opening remarks.
Thank you operator, and thank you all for joining US today joining me on today's call are Kevin Sheehan Board Chair and interim Chief Executive Officer, and Margo Manning Chief operating officer.
After our prepared comments, we will be happy to take your questions. This call is being recorded on behalf of Dave <unk> Buster's Entertainment incorporated and is copyrighted.
Before we begin our discussion on the company's results I'd like to call your attention to the fact that in our remarks and our responses to questions certain items will be discussed which are not entirely based on historical fact.
Any of these items should be considered forward looking statements relating to future events within the meaning of the private Securities Litigation Reform Act of 1995.
All such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.
Information on the various risk factors and uncertainties have been published in our filings with the SEC, which are available on our website.
In addition, our remarks today will include references to financial measures that are not defined under generally accepted accounting principles.
Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released yesterday, which is also available on our website now I'll turn the call over to Kevin.
Thank you Mike Good morning, everyone. We're pleased to be speaking with you today as we reported another strong quarter of financial results.
We have an exceptional business model strong assets and a talented group of team members, who are delivering outstanding service and experiences to our guests.
We've made great progress that's a fourth quarter revenue approached pre COVID-19 levels, while net income and adjusted EBITDA exceeded pre pre COVID-19 results compared to the fourth quarter of 2019, However, there's much more opportunity to unlock the potential of this business, we have begun a new phase of innovation.
Growth and value creation here at Dave <unk> Buster's.
As I said last quarter, we have a great brand with significant scale, a passionate team and a fleet of stores in high traffic high volume destination trade areas. We are focused on optimizing our current stores full potential and accelerating innovation to drive incremental traffic to our brand.
We're ramping up our unit growth this year and will begin a more formal program.
To remodel our stores and give them a fresh look that's more in line with our new prototype.
We're broadening our entertainment offering to include more immersive sports viewing experiences, including improvements to the watch environment as Margo will detail. Shortly we recently announced a partnership with UFC and WWE to bring all their pay per view events to our D&B locations across.
North America.
Finally, our best in class arcade will get even better with our summer of games rollout supported by a significant marketing campaign.
As you can tell I'm very excited about the future of this company, we have meaningful upside and as you can see from our fourth quarter, where our weight. We are on our way to realizing that potential at this time, Mike is going to cover the fourth quarter results and share some thoughts on our expectations for the first quarter and fiscal year 2000.
'twenty two.
After that our CLO Margo Manning will update you on our operations, Mike Thanks, Kevin our fourth quarter results demonstrated our ability to drive significant improvement in profitability with relatively flat comp store sales compared to 2019. Despite COVID-19 implications, we continue to see a benefit from a higher mix of.
Amusements and a leaner operating model.
Even with headwinds from wage and commodity inflation, we've continued to grow margins and have offset these impacts that are in more efficient labor model enabled by technology lean process improvements proactive pricing adjustments and more effective marketing investments.
Looking forward, we are poised for our stores to return to new levels benefiting from the removal of Covid restrictions the return of special events and the efforts of recent initiatives for.
Our fourth quarter sales, we experienced a comp store sales decrease of two 6%, excluding the 14th stores that had vaccine mandates during the quarter, including all stores, we experienced negative six 8% comp and total revenue decline of one 2% compared with 2019, reflecting softness due to the.
Omicron.
Variant and associated vaccine mandates and the reduced special events business due to COVID-19 .
Our walk in sales continued to post positive comps at two 1%, although our special events business continued to lag at negative 58% compared to 2019 by.
By month, our overall comps were positive seven 5% in November negative 14, 9% in December and negative eight 4% in January which highlights the timing of when the omicron variant hit.
Our walk in comps, which excluded the impact of our lagging special events business. During a seasonally strong holiday party season were positive 13, 9% in November negative four 1% in December and negative <unk>, 9% in January .
Regarding sales mix amusements, and other had a positive 7% comp and was 65% of our overall mix compared with 56% of our mix. In 2019. This is mainly due to minimal discounting and a continued shift to higher denomination power cards.
<unk> had a negative 24% comp compared with 2019, a substantial portion of which was due to the special events business.
Adjusted EBITDA for the quarter was $87 7 million or 12, 7% higher than the same period in 2019.
This reflects a 25, 5% adjusted EBITDA margin, which was over 300 basis points higher compared to the same period in 2019.
The improved performance was primarily driven by the higher amusement mix and leverage on our labor due to a more efficient model.
Net income increased 700000 to $25 7 billion in the quarter compared with 2019, resulting in EPS of <unk> 52 per diluted share.
These results generated positive operating cash flow in the quarter.
We ended the quarter with $26 million in cash and approximately $492 5 million of liquidity under our $500 million revolving credit facility net of outstanding letters of credit and our net leverage ratio was only one two times total long term debt was $440 million at the end of the quarter consisting of our <unk>.
Senior notes maturing in 2025 during the quarter, we redeemed $55 million of our senior secured notes, which resulted in a $1 $7 million expense to redeem the notes, but we'll save $4 2 million in annualized interest.
Turning to capital spending we invested $26 million in capital additions net of tenant allowances, we opened one new store during the quarter in the first quarter. We plan to open two additional stores in April in fiscal year 'twenty. Two we plan to open a total of eight new stores.
As you can tell we're pleased with our fourth quarter results and the sound financial footing, we've established going into fiscal year 'twenty two.
Turning to our outlook I'd like to offer some insights.
For the first quarter of fiscal year 'twenty two.
Regarding sales trends our comp sales for the first eight weeks have been positive five 4% compared to 2019.
Our Washington business is up nine 1% on a quarter to date basis, and our special events business is down 42% on the quarter to date basis.
Fiscal 'twenty two projected capital additions net of tenant allowances are expected to be approximately 200 million with 70% dedicated to new stores and improvements to the existing stores.
10% for games, and 20% for infrastructure upgrades and replacements.
In summary, our team continues to execute on our initiatives to drive organic growth improve profitability and produce significant cash flow for the business. We are pleased with our progress and are well positioned as we enter in fiscal 'twenty two.
With that I'll turn it over to Mark.
Thank you, Mike and good morning, everyone. Please continue.
Thanks, a lot.
Yes.
Although our food and beverage and entertainment offering to drive sales and profitability.
Guest satisfaction score so the many calls Nathan.
'twenty one.
Right.
Additionally, we have established a new title for food and beverage limited time offers per year aimed at driving.
So the tax rate starting in Q1, we are rolling out reservation capability throughout the brand to make it even easier for our guests to diagnose.
Jeff will now be able to reserve a table in our dining rooms.
So to go on the website or high vol.
Our new service level designed to evolve.
Those rates.
In Q4, we launched a highly curated beverages the lesson elevating the experience at new flavor profiles and rather than today.
He was.
Strong class to revitalize our late night segment through a combination of marketing on <unk>.
And any effort.
Our late night happy hour.
Have a theory at London.
Custom content.
However, kitchen cabinet.
Lastly on the <unk> day.
Hopeful over the air rate.
Yes.
As discussed on prior call rehab.
We have launched several classes of retirements and excellent.
Hi, Jeremy.
Hey, Kevin.
Hi for any entertainment offerings, and we are continuing to refine these offerings with the goal.
Maureen.
As Kevin mentioned <unk> Q1, we launched a nationwide partnership with both USD and WWE to brand our pay per view events to the D&B locations across North America.
Thanks, Dave investors place.
Okay, all right well I'm excited to have them.
The partnership with WWE will launch with Wrestlemania on April <unk>.
With the summer Slam was in July .
We've got more attention to March madness.
With difficult final on more integration on our digital finance.
Brad that was that throughout the tournament.
We have also been investing.
Allegheny to support organic home almost sedan with the stage rollout of live remote capabilities into our store.
Allow us to provide real time high definition video such as T. J said concert.
Okay.
Now, let's move to at that sales recovery, which was depressed in Q4.
While lagging.
<unk> welcome.
Net sales have accelerated in recent weeks, specifically, we are seeing our corporate segments start to rebound with the centralization of our sales team. We believe we are positioned to optimize outbound call activity to drive incremental.
Our new centralized sales center operated by local store management has already demonstrated.
Based vesting level our sales representative.
And maybe any rewards program, which is typical on the App launched on November eight.
Need to exceed projections.
Q1, our localized marketing leveraging.
Leveraging connected TV.
To support spring break week.
Brian .
We are bringing back one of our most successful promotion.
<unk> combo will run at a limited time offer or the length of haul to capitalize on that demand from our more value for any help with gas.
Believe that sector this will drive incremental spending behavior.
Yes sure Brandon.
Lastly, I'm pleased to share that we've been able to increase our stores hourly staffing level. What are you seeing an increase in our app.
Positive refreshment trend for ITE.
Tom has enabled us to shift our focus on containing these new hire training.
Development and providing a great employee experience.
The entire D&B Stanley. Thank you for all of your efforts. This past year you are the heart of this brand and the reason the Sun comes to life in our stores with that I'll hand, the call back over to you Kevin.
Thanks, Margo, we're pleased with the results we delivered in the fourth quarter, despite numerous headwinds, including vaccine mandates omnicom wage and labor pressures supply chain challenges and the lagging special events business.
We are optimizing our return to a more normalized post COVID-19 environment.
Headwinds, we have experienced become tailwind that's fueling our business as we move forward, we have an exceptional business model strong assets and a talented team there is meaningful upside potential for this company and we are laser focused on driving that to reality.
Team is extremely excited about the prospects for 'twenty, two and 2023 and well beyond.
Let me end with these thoughts we can't Signet, we came very close to reporting record fourth quarter revenue, despite being significantly impacted by omnicom were starting to see a recovery in our special events business, which was down by 72% on an annual basis in 2021 compared to 2019.
<unk>.
We are shaping our strategic initiatives and also making great process progress improving margins our international efforts will start to blended we believe beginning in the latter part of 2023, and then you can add in our heightened focus on sports viewing and sports betting all of these actions will begin to write.
The script for the next couple of years, so tightly seatbelts as we are on the move now we'll take your questions. Thank you.
Alright. Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal sweeter equipment.
We kindly ask that you limit yourself to only one question and one follow up question.
That is star one to ask a question. We can go ahead and take our first question from Andy Barish with Jefferies.
Yeah, Hey, good morning, guys.
Wanted to.
Focus on quarter to date results here in 'twenty, two which are impressive.
Give us your sense.
Or is there anything kind of coming through as a key contributor add door.
Spring break calendar, if theres anything to point out there I know obviously the last couple of years, that's been a little messy, but.
Let me stop there and then.
I'll ask one more after this.
Hey, Andy Thanks for that question, it's actually very important because when you dig into the numbers. It really tells the true story of what's going on in this company, which is really significant.
As we were going through the fourth quarter and we went through the first number of weeks.
We were doing our growth was up seven 6%.
And then around the middle of December .
As you know hit us.
And that was such an important part because holiday time and also a big time for special events that were really starting to recover nicely. So the first portion of the quarter was up 757, 6% in the second portion of the quarter was down $12 to do.
That tells you.
Those numbers the power, where we would go in before the breakout of omnicom than when you do the same sort of mathematics in the first quarter in the first I think it was three weeks, we were down eight 3%.
And then once that it will become.
We went back to business our last five weeks have been up 13%. So you can really fully understand that.
Other than the Omnicom this business is on fire.
Just the beginning of it we've got so many things that we've talked about on other calls that we're starting to shape to drive demand. So we're excited about where we are today and we're excited about the prospects for the future. So I think with that incremental guidance that you guys could better understand what's going on inside the business and how we were.
You can be impacted by the Omnicom is now behind us.
You can understand why we feel so good about where we're going as a company.
Thanks, Kevin and then just quickly it seems like.
You're enjoying and having fun in the interim CEO role can you give us.
Just some perspective on kind of where.
That search process and given.
You've been in the role for a fairly extended period of time now.
Yes.
I mean, the reality is <unk> 68 to <unk> 69, and we deserved a young younger energetic driven.
The skill set that's going to build this brand in all the ways that we've talked about for the next five plus years. So I think that deserves some new blood some fresh blood into our business, we have a great process going on in our Nam and governance Committee of.
The board and we've been very careful and very selective to try to find the right candidate because this is such an important opportunity and getting the right person in to.
So this next period of growth and innovation is critical and I would say that.
Does that mean working like Mad interviewing vetting candidates and we right now have I would say multiple very serious candidates.
Over the coming quarter hopefully.
We'll announce a new.
CEO , so just stay tuned on that.
Okay.
Okay. Thanks, Kevin Thanks, guys.
Again that is star one to ask a question as you think your question has been answered you may remove yourself from the queue by pressing Star Q. We'll go ahead and take our next question from Jeff Farmer with Gordon Haskett.
Good morning, Thank you guys.
You did touch on it but I'm curious if you could provide some additional color on how your customers.
Responding to that rewards program rollout.
And what's that what that has meant for their visit frequency and spend or any other relevant metric.
Hi, Jeff its mark.
So I have I have a little bit of information.
Are excited to see this.
In terms of the person spend our loyalty members increased compared to the prior nine months, we've seen an increase in the user engagement in the program Modelers that they're spending more time on the average day and Disney user retention is also trending at.
Don't have any current staff on borrowings, but I will tell you on last week, we've seen just found that with that.
That was early on in the week either per person as well. So we're encouraged when you think about we just launched it in November .
And.
And so we're excited about its potential as the army started employee compensation.
Okay. That's helpful. And then just as a follow up to Andy's question on the CEO I heard which is you said loud and clear but the question is.
From a business strategy perspective are there decisions that will not be made until a new CEO is announced meaning is that there are there some things that are pent up.
In terms of strategic opportunities that the company will now pursue until a new CEO is announced and if so.
Understanding this is a challenging question, but what types of sort of decisions or strategic.
Sort of direction type type things would those be.
Yes.
I would say that on when.
When you set back and take a clean sheet of paper and say what are the opportunities for this company. There is a lot of different things that we can be doing in this interim period that are going to drive demand and drive the success of this company, having said that.
I'm very cognizant of when the new CEO comes in he or she has the ability to shape their future strategy.
With their own thoughts so I'm trying to be sensitive not to do things that are going to conflict with that but as I said, we have so much opportunity here that are clearly things that we could do that anybody coming in would say well that makes sense that makes sense. So we're running on all of those.
But also being thoughtful not to take away from the great opportunity of a new person coming in.
Okay. Thank you.
Yes.
Alright, well go ahead and take our next question from Jake Bartlett with <unk> Securities.
Great. Thanks for taking the question. My first is on is on the decision to go back to the eat and play promotion.
Throughout.
The pandemic.
<unk> benefited from a very strong check our very strong spend with with less discounting so.
I'm wondering what that might do to kind of your amusement checker were.
We did that benefit whether that's this could be the beginning of focusing more on traffic than just.
Yes.
Jack.
Driver that you've seen and then also it doesn't sound like given the 13%.
Comps, but are you seeing any sort of wobbling from your consumer.
Given gas prices or there other concerns that.
That investors have about the consumer here.
Contending with with major inflation for non discretionary items.
Yes so.
So far to date and I think we've been through most of the nuances we're seeing the strong demand continuing but of course, we're being eyes wide open as to the emerging trends to make sure we're anticipating all of that.
One interesting thing.
I'm going to bring out that.
Was missing in my view for this company and Margo is hugely supportive of this well we just recently had our general managers meeting in Las Vegas, where we had all 144 gms in there.
Regional Gms and the leadership of the company together and we introduce a new long term incentive plan for the first time for all of our Gms. So we made and I focused I don't know if anybody knows my history about entrepreneurship and feeling like Youre. The owner. So we made every one of these gms.
Eligible for a program that is 100% focused on organic growth of your store of your domain. So it's a four year program and you get a you can ride through it a little bit below or a little bit above in each of the years, but on the full year basis.
AGR, a 3% gets you into the money a CAGR above that gets you.
Disproportionate upside so we're excited about this because now there is a focus.
They own their little their store they own what goes on day, one the days of the week they own the hours of the day and we are now getting equipping them with a bag of tricks I call. It a bag of chips is the Kevin World simple ways of delivering things of things that we can help them to be better at driving.
Their incremental store, so so theres lots of those kinds of things going on but that one in particular I can't tell you you know Michael will Echo. This the team was wildly excited about now owning their store and they're going to do everything possible every single day to drive that because if they hit their numbers.
And it's based on today's stock prices, which we all know is so significantly undervalued.
Because we need to prove to you guys that we are in business now for organic growth, but when we get to that finish line. If we deliver on that organic growth feedstock prices are going to be usually different and based off of today's price. So these guys can make guys and gals can make a huge payout in four years. So there is a focus.
On that and I think that's just another example of the stuff that we're doing to drive behaviors of our team.
Yes, I think just think one other point to add on.
My question, let me just add one other point on just the kind of the <unk>.
<unk> said around understanding inflation and gas prices, that's doing to everybody.
When we take a step back and just look at our business seven days a week vast majority of our business is coming through on that Friday Saturday Sunday period. So we also got to look for opportunities on how we can build the midweek.
Whether thats through.
Promotional opportunities that we're now see that are available and the likes so it's really kind of driving through as many process of change.
From a sales perspective to kind of fill in the rest of the week, which we believe will just continue to add incremental revenue to the bottom line.
Great. Thanks, that's really helpful. And then my other question was about the regional performance.
I imagine.
Youre seeing more of a recovery these days from markets like California, and the northeast can you, let us know just in the context of <unk>.
To date.
Or are the sales still down versus pre COVID-19 in big markets like California, and the northeast I'm trying to understand really the juice, that's still left in the tank as those markets recover.
It's for the most part you can see a dramatic recovery quickly as people are out and about wanting to enjoy themselves. So I would say I would say, there's still some room to continue with some of the markets that they're not all perfect. But we've enjoyed in the last number of weeks quite a bit of that recovery.
The thing that is going to provide some nice benefit as we move forward. Because we are seeing is our bookings on special events are back to actually above historic levels on a week to week basis. So that's an emerging trend that given the environment that we're in hopefully stays the same.
Will bring us back very quickly towards where we were.
The pandemic.
This is mark I'll, just add as you know in the northeast and in California.
We're facing vaccine mandate, which were burdened Stanford that story for Sarah and dragging on sales in North Asia is lifted we still have a little bit in California. So those would be outliers, but other than that those markets have been performing very well.
Great. Thank you very much.
Yes.
Alright, well go ahead and take our next question from Brian Mullan with Deutsche Bank.
Hey, Thank you.
The prior management had provided a framework of 200 basis points of EBITDA margin expansion versus 2019 once the average weekly sales were fully recaptured.
Since that framework was first given theres been an acceleration of inflation across the economy. We've also seen you know Kevin and Mike. Both of you have seen your new roles and think it would be helpful to clarify for everyone that EBITDA margin expansion framework still stand or have there been any changes worth calling.
The outer noting.
Yes, a couple of different points. So back to 2019 were up 300 basis points. So that's obviously north of the 200 that we were talking about previously under the old management now some of that is coming from just a mix because amusement as 65% of our business versus 56%.
Much lower level of of labor associated with that so we are getting some benefit from that which is roughly about 900 points.
Sorry, 900 basis points.
About a third of that is coming from.
That mix the rest of it when you think about inflation not just from a labor perspective in a commodity.
Yes, the price changes have helped to offset that and the labor model changes that we made so just think about the introduction of Eckstein X design allowed us to increase the number of tables that a server can can handle by about a third so you take that translation into your labor model that means less head count necessary more.
Efficient model that helps offset that labor rate inflation, which is sitting today at about 20% for us and I don't see that changing because I don't see employees, taking pay cuts in the future.
That's going to be here to stay and it's something that we're all that eyes wide open on how we manage it and adjust to that from a commodity perspective, it's primarily around meat protein, so chicken and beef.
But again, we're able to offset that with a slight increase in pricing on our F&B, which was only about 5% and if you think about that there was no price increases prior to the last two years. So it's a very modest and reasonable price increase accordingly to what we're seeing in the market and so the combination of all of that is keeping us at that margin.
We've talked about that roughly 200% or 200 basis.
So in other words, we see confidence we have confidence that that 200 bps will continue through this calendar year, Budd correct and on into the future as we get better and better at owning and on our cost structure.
Okay, great. Thank you for all that and then just a question on development.
Thanks for the guidance on eight new units to open. This year can you just speak to what type of formats, you expect those to be and I'm asking just to try to gauge if you'd expect your average weekly sales in those.
To mirror, the existing base of stores or might be different.
For some reason in your planning and then if you'd be willing to speak to how the pipeline is building for 2023 and beyond would you expect that to accelerate next year given all the work that youre doing now.
Yes, sure so to start off with the eight stores that were opening is going to be a mix.
Generally we're kind of targeting around that 25000 square foot.
Location.
But there are going to be some opportunities, where we're able to get into space larger than that and we will be able to take advantage of that with the different types of formats. So it's really about what the location allows for as opposed to we're only going to have a set target and that's it. So we have some flexibility around that and that's what the plan is for these eight stores coming.
Up this year.
As we get beyond that we've got a solid pipeline already under development that takes us through the end of 2024.
And so along that line as I said earlier, we are kind of targeting that the prime spot of about a 25000 foot store that that level allows us to.
I'll say integrate into into markets when more density as opposed to one Mega Center, we could have two smaller footprints and still yield the same return on invested capital as we always have.
The other critically important thing for everyone to understand is the it's not just the management team and the board is 100% behind this concept of we are going to invest in our existing stores to the point, where we get everything closer to the footprint of what we're building today.
And then once we get through this it's going to take US two to three years to get through all of the stores, but then stay on this cycle. So that every store continues to have that thresh feel and then with certain small modifications. We can keep it rolling but every seventh year every store should get a major look and change.
That will help as well in that.
Is somewhat funded by the efficiency of the smaller stores.
Which is muted a little bit by the by the cost of parts and building the stores as you guys. All know because of what's going on in the environment, but at the end of the day with not a lot of incremental capital, we're going to be able to accomplish so we're really excited about this because I think investing in our existing stores and making them feel.
<unk> exciting is going to drive organic growth as well.
Okay. We can go ahead and take our next question from Andrew Sir.
Zach my apologies from BMO.
Great. Thank you very much warning.
I guess following up on the margin questions, how much inflation across labor and.
I mean come on <unk>, what are you thinking about as it stands today for 2022.
Yes, I think from an overall rate perspective for.
Labor, it's roughly about 20% and we don't see that changing anytime in the future.
So as I said being able to do a more efficient labor model with <unk> and other improvements that we've made we're able to offset a significant portion of that plus again the mix between amusement versus F&B helps provide some of that extra margin that covers those costs and then.
In addition in the future Youre going to see the return of special events. Our special events business is really about 60% of our SMB result that will carry a slightly higher margin than normal F&B, because you have better.
Planning for that in a more efficient labor model in the back of house for those types of events.
Got it okay that makes sense and then.
Michael I guess I was just curious you talked about.
The balance sheet net leverage on the balance sheet and some of the Capex dynamics I guess I'm just curious at a high level. How you think about utilizing the balance sheet the right levels of leverage.
Over time and any other thoughts I know last quarter, obviously announced the share repo authorization I'm, just curious how youre thinking about those dynamics. Thanks.
Okay.
Okay.
Our net debt is one two times, so obviously and Kevin can weigh in as well the balance sheet can support more leverage, but we're not going to add leverage just for the sake of adding it we're going to have to make sure that what we do is very strategic to the long term value of the company, but also from a strategic perspective, it's really about long term growth.
And so we have a balance sheet that will allows us to do that and we will take advantage of that when the time comes.
I mean at the end of the day you have to expect that the management team will be evaluating the alternative uses of cash because we don't want to fish to return to our shareholders by paying down debt. When we're one two times Levered of course, we will do that until we have some sort of a really successful strategic or.
Turning to this but.
At some point it gets inefficient shareholders to pay down.
Inexpensive debt.
Great. Thank you very much.
And we'll go ahead and take our next question from Brian Vaccaro with Raymond James.
Thanks, and good morning, I wanted to circle back on the quarter to date comments, if we could just to make sure. We're all on the same page Mike could you share what average weekly sales were in the quarter to date period, if you have that Andy.
<unk>.
So.
When we looked at for the first eight weeks, we've been looking at right about $250 or 250000 per store.
Compared to $2 45 for the previous period now there is some seasonality, but at this point that's kind of washed itself just based on the timing of when spring breaks are and the like so at this point, we're kind of behind that so we feel that it is a.
A relatively comparable period and.
And just remember when you break that weekly performance now between the first three weeks as I had alluded to earlier in the call and the last five weeks you will see the bigger bump in the weekly results.
Yes, understood and then the comment on spring breaks.
If we compare back to 19 I think Easter is just a few days difference back to 19 has there been a shift in spring breaks historically, we've talked about.
They're taking March and April together has March benefited from some spring breaks that maybe disconnected from Easter.
It.
No the differential would be like one week to the next week. So that's all behind US at this point. So when we talk about the first full week any seasonality around spring break and just is all behind us.
Okay, Okay and on the pricing front I believe you were testing some price increases on amusements could you share how much of an increase did you settle on and when was that taken.
Yes.
Actually.
We're testing and testing just to make sure we get this right, but I would say at the end of the day the price increases that we've pushed out are going to pretty much be in the double digits on a <unk>.
Net basis as we go forward, but maybe even a bit better than that.
Okay, and I guess in test on that pricing I'm curious how much of improvement in per cap spend you saw or you are seeing I am just thinking behaviors Lilly behavior Leigh about the consumer response does the average customer sort of have a set span say load 15 or <unk>.
Five and a card and when it's gone it's gone and they leave or are you seeing some behavior, where they're more inclined to reload the cards and extend the visit.
No I think it's.
It's a combination of both which has always been I think really the meaningful adjustment was back in October when we raised the the actual what we'll call the buy in price. So when we had a minimum of say a $20 card and you increased that to 25, that's when we saw it a little bit more of a bump up.
Versus the big.
The I'll call it the COVID-19 coming out of Covid increased spend.
What you saw in Q2.
I'd say Q1 Q2.
When you get to Q3, I'm, sorry, Q4, because I'm so used to doing regular calendar quarters now we've got this objective.
Retail calendar confusing when you get to the start of Q4.
You saw that price increase go into effect, but it didn't change the pricing of the actual gain itself. It just changed the buy in from that we saw the positive impact really no change in consumer behavior at that point, we have done some testing about changing the actual price of the game itself.
That's still in test, but we still haven't seen any real change in customer behavior at this point, but it's still a slight decrease in <unk>.
And again, we're still murky.
Okay, Great. That's helpful. And then I guess last one for me.
Mike I appreciate the business update with the quarter to date comps, but given all the moving pieces and movements in margin lines labor other opex et cetera would you be willing to give some high level guardrails on the first quarter as it relates to EBITDA or even the annual sort of EBITDA expectation that you would have.
Assuming no change in in Covid circumstances.
I think we're trying to get away from the guidance part of this so that we've got everybody looking at the business as we shape, but simple mathematics done by anybody looking at the breakdown of the first quarter of the way I described it with the pain first few weeks and then acceleration in the last five weeks.
Extrapolate that through the quarter you can you can.
Do the math and I suspect you're going to come out that we were going to be in good shape for the quarter.
Sorry to be ironed out.
Uh-huh fair enough I'll pass it along thank you.
And that will conclude today's question and answer session. Mr. Sheehan at this time I will turn the conference back to you for any additional or closing remarks.
Oh, thanks, everybody for taking the time.
To listen to US. This morning, I got to tell you. We're very excited about the prospects and all those different we walked away from this general managers meeting.
About a week and a half ago with a lot of enthusiasm and the excitement that was addicted to all of the people at the at the <unk>.
Meeting and so we're on the beginning of a new generation of growth in this business and a lot of innovation, we're thinking differently.
The way I like to describe it is we're not tainted by a long history, which is a very solid history. So don't get me wrong, but coming in and taking a clean sheet of paper and saying what is the art of the possible Mike alluded to the days of the week in times of the day and we're trying very hard to figure out what are the things that we can do late night.
Building that back to a level that people want to be there in the evenings to come and hang out with their friends.
Different types of events that could draw traffic on the lower view days, so so lots to come stay tuned.
Happy with where we are and excited about the future. Thank you so much for joining us.
This concludes today's call. Thank you all for your participation you may now disconnect.
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