Q3 2022 Dave & Buster's Entertainment Inc Earnings Call
Good afternoon, and welcome to Dave <unk> Buster's Entertainment incorporated third quarter 2022 conference call all participants will be in a listen only mode. So do you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one.
I know your telephone keypad to withdraw your question. Please press Star then two please limit yourself to one question and one follow up after what's your line will be muted, but you can re enter the queue.
Please note that this event is being recorded I would now like to turn the conference over to Mr. Correa, and Vice President of Investor Relations and Treasurer. Please go ahead Sir.
Thank you operator, and welcome to everyone on the line.
Leading todays call.
He is our Chief Executive Officer, Chris morning.
And Michael <unk>, our Chief Financial Officer.
After our prepared remarks, we'll be happy to take your questions.
This call is being recorded on behalf of Dave <unk> Buster's Entertainment incorporated any copyrighted.
Before we begin the 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 may 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.
995.
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 measure contained in our earnings announcement released this afternoon, which is also available on our website.
Also pro forma financials, including main event for the trailing four quarters ended October 32022 are available at the bottom.
The events and presentations section of our IR web site.
Now I will turn the call over to Chris.
Okay. Thank you Corey and good afternoon, everyone and thank you for joining our call today.
We are pleased to report strong financial results for the third quarter, which are clearly indicative of the progress we are making on our growth strategy. We delivered record revenue for the quarter driven by double digit comparable sales growth, which in turn led to record adjusted EBITDA for the quarter.
The challenging macro and inflationary environment I want to recognize the outstanding effort of our teams both in the field and here in our support center that produce these record results as we continue the work of integration to become a more efficient organization.
Since our last analyst call. Our team has been focused on three key work streams.
One is effectively managing the merger integration to long term strategic planning and three managing sales and profitability in the near term to offset the ongoing inflationary pressure in our business.
I'm pleased to say, we are ahead of schedule and exceeding expectations in all three areas.
As it relates to our merger integration our teams' excellence in execution has accelerated the pace of realizing the anticipated benefits.
To date over $17 million in annualized synergies were implemented and we continue to be confident in our $25 million target.
The pace of implementing these synergies has accelerated as we swiftly address all redundant staffing continue to combine our purchasing power to offset inflation and move toward combining the best in class systems across both brands.
We are moving as we are moving aggressively to fully capture of synergy opportunities implementing superior operating initiatives and leveraging the scale of our combined operations.
Secondly, our teams have been aggressively focus on developing our long term strategic plan to further cement the Dave <unk> Buster's and main event brands as undeniable leaders and location based entertainment and.
And to add meaningful long term shareholder value.
Based on a thorough strategic review of the business anchored in deep consumer research and spending considerable time learning directly from our operators our core brand positions for Dave <unk> Buster's brand going forward will bring greater focus to executing adult occasions, aged 21 to 39, who are.
<unk> locations to have a great time with their squad.
These crew connectors as we like to call them are energized by social situations and in the know on culture and social trends happening at the time.
Over the months and years to come this refined brand positioning will guide our marketing strategy Entertainment innovation pipeline food and beverage offering store design and layout and tech enabled hospitality model.
This long term holistic approach to managing the business anchored in strategic planning and operational execution led to the successful re invigoration of the main event brand and we're excited to apply the same approach to the larger Dave and Busters enterprise.
We look forward to sharing more details with you at our Investor day in the early part of next year.
Lastly, our teams have been focused on mitigating inflationary pressures with thoughtful pricing and increase operating efficiencies.
By ongoing inflationary cost pressure in the business. We have made great progress they continue to find opportunities to manage our costs and increase our profitability.
In addition to the work on cost controls, we are very pleased with the top line momentum throughout our portfolio.
As indicated by our third quarter results just continue to visit and stands at healthy rates.
On the marketing front in Q3, we launched our National where winners watch football campaign, featuring Kansas City Chiefs, Great travelers Kelsey designed to drive awareness of Dave <unk> Buster's as a great football viewing destination, which contributed to our strong Q3 performance in November we recently completed our E <unk>.
<unk> combo promotion that Dave <unk> Buster's.
We've had tremendous success with our local focus on World Cup Watch Activations and are excited about the launch of our impossible holiday hangout contest, which will bring together for friends from around the country to spend the holiday together, a Dave and Busters and law.
In Kansas City.
As we head into Q4, our special event sales teams and operating teams are aggressively focused on delivering a strong holiday banquet season, we are optimistic that the upcoming holiday season will provide additional momentum as we enter the new year as our special events business has nearly recovered to pre COVID-19 levels.
We are excited about the future of this organization, we have two industry, leading brands and Dave and Busters and made event. These brands have exceptional business models strong assets and talented teams, bringing these brands together under one umbrella presents our company with exceptional growth opportunities, which will benefit all stakeholders, we have a clear.
Your line of sight on the strategic opportunities ahead for the Dave <unk> Buster's brand and a world class management team with a proven track record of superior execution.
We believe there is meaningful upside potential for this company and our stakeholders and we are working diligently to realize that potential.
Let me take a minute to recap a few growth initiatives that have me excited about the opportunity in front of us.
The continued development and rollout of our improved hospitality based service model.
The brand awareness work, that's driving the innovation of our product offering and then turn how we approach the refresh program for our stores. The continued recovery of our special event business, our development pipeline of new stores for both brands our progress on developing our international franchisee network.
<unk> of our teams to identify and implement our synergy opportunities and last but certainly not least the proven capabilities of the executive management team, which gives me confidence in our ability to succeed.
Put us to safely everywhere, we look we are seeing significant growth opportunities.
And we are poised to unlock long term shareholder value.
So now with that let me turn the call over to Mike to review, our Q3 results.
Thanks, Chris.
We're pleased with our financial results for the third quarter and encouraged by the trends continuing into the fourth quarter.
Amidst considerable economic uncertainty we remain focused on successfully managing our newly combined business, which generated record revenue of $481 million and produced a record $90 million of adjusted EBITDA in the third quarter, which I'll remind you is holistically are.
The softest quarter of the fiscal year.
We produced an 18, 7% adjusted EBITDA margin in the third quarter, which represents a 320 basis point improvement above the 15, 5% margin of the third quarter of 2019.
We continue to be laser focused on optimizing our cost structure and unlocking our synergy target of $25 million from the combination with main event.
With regards to pro forma comparable store sales figures I would like to direct you to the supplemental schedule titled December 2022, supplemental pro forma financial data posted in the events and presentation section on our IR website I'd like to highlight that the strong comp sales figures in the third quarter of 13.
3%.
Versus 2021, and 17, 5% comp versus 2019 on a consolidated basis.
Notably our F&B business has continued to improve with our tailored new menu offerings.
And F&B represents an increasing mix of our total revenue versus the prior year period.
Additionally, our special events business continues to provide tremendous upside as it continues to normalize to pre pandemic levels with the pro forma combined comps down only six 7% this quarter versus 2019 and comparison to last quarter. When it was comping down 13, 4% versus 20.
90.
We generated $68 million in operating cash flow during the quarter contributing to an ending cash balance of $108 million for total liquidity of almost $600 million when combined with the undrawn revolving credit facility.
We ended the quarter with a net total leverage ratio of two two times.
Turning to capital spending we invested a total of $64 million in capital additions and opened three new Dave <unk> Busters stores, one of the blend would Washington, one in long Beach, California, and the other in Bakersfield, California, We plan to open one new Dave <unk> Busters branded store.
Two main event branded stores in the fourth quarter of fiscal 'twenty two.
Finally, let me update you on comparable store sales through the first five weeks of the quarter.
Pro forma combined comparable store sales increased three 1% compared to the same period in 2021, and nine 2% compared to the same period in 2019.
We estimate that the calendar shift of the holiday season as it specifically relates to our special events business in 'twenty two versus 2019 for this five week period represents a temporary negative 3% overall comp headwind, which will reverse in the remaining weeks of December .
Yes.
To summarize we are excited about the strong execution in our business our progress capturing synergies the numerous growth opportunities for us to pursue and the talent and experience of our team to drive growth. Despite the challenging microeconomic environment.
We remained focus on closely managing cost and capital spending to ensure we strategically unlocked the maximum value of these two great brands and deliver the highest returns possible for our shareholders.
Now operator, please open up the line for questions.
Thank you we will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
Youre using a speakerphone please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two.
Let me remind you that you are limited to one question and one follow up question and at this time, we'll pause momentarily to assemble our roster.
Yes.
And the first question will come from Andy Barish with Jefferies. Please go ahead.
Yeah, Hey, guys happy holidays.
Just a couple of them.
Thoughts on that on the top line if you could.
Where were you were you pleased with Eaton play in November I guess, Firstly, and then secondly can you.
Talk to us about sort of the importance of December for the quarter and any quantification maybe on.
On how we should think.
Sort of seasonality versus the three <unk> you.
You know kind of look at average unit volumes.
Hey, Andy This is Chris I'll start I'll, let you kind of fill in some additional color.
Happy holidays to you as well I appreciate that.
In terms of in play what I'll tell you is that we were pleased with the trends in our business on top line and that includes the month of November .
When we look at our entire Arsenal of.
Marketing activities and other ones that I walked you through.
First the NFL campaign, we felt like that did a very nice job, bringing awareness to the sports viewing.
We continue to see nice sales results on the weekends, which we think is a combination of.
First the campaign, we believe a successful and secondly, our operators are very keenly focused on maximizing throughput on the weekend.
So we think that that helps the eat and play combo in November we're pleased with.
As we look at you know really trying to understand the contributions that promotion had a the data is a little murky, but overall, we're pleased that we did it we have no regrets.
The thing I'll tell you about that particular platform is it's it's.
Yes, it's part of.
It's one of those promotions that is.
Identifiable to the dnb experience and over.
Over time, there's a lot of brand equity a lot of the promotional equity in that that particular campaign and so I would look to see us to continue to do it.
But we will going forward will be very selective when we do it as opposed to kind of an always on type of immersion.
But no regrets it all in in November and then as Q walks you through as we think through our Q4 sales performance.
Overall, we're pleased.
When you make the adjustments for the timing there is still considerable momentum in this business on both brands.
And the December period is a very important period as you mentioned.
Because of.
The majority of our sales during that period.
For the main event brand and a significant portion of the sales for the Dave <unk> Buster's brand comes from special events and our teams are laser focused on.
Maximizing the opportunities on special events, it's been a couple of years since that demand has been there the demand is back and we intend to optimize that and so we've got the teams focused there we're selling and our operators are ready to execute and we.
At this point in time, we are approaching our pre COVID-19 levels, which we're very pleased about.
Yes, Andy just one other thought just on the timing and what you see in the first five weeks. So if you think about our special events business a peak of that takes place in the three week period, leading up to the Christmas holiday and so in 2022. This peak consists of the weeks of December 5th.
The current week that were in the 12 and the 19th but if you go back and look at.
2019.
The Christmas holiday was on a Tuesday, Wednesday, which caused that three week period to push forward. So the weeks were really December 2nd ninth.
<unk> 16, so the difference between just December 2nd versus December 5th in this period is significant to us and thats whats, causing about a 3% headwind in our comp store sales for just this five week period, we will get the benefit of that on the back end as we get closer to that.
Christmas Holiday week will pick up that extra piece of the business at that point and so overall for the month of December when you've taken just noise out between the five weeks in the fourth quarter. We're extremely pleased with the level of work that we're seeing by our sales team on what we think will experience from the.
The special events business as a whole for the month of December .
Thank you very much.
Yeah.
The next question will come from Jack Bartlett with Tudor Securities. Please go ahead.
Thank you this is Jake.
I had.
A question on just so we can understand the trends I think youre reporting same store sales you know just for Dave and Busters, because the main event stores I don't think are considered comp base, and then youre, giving us pro forma the guidance isn't pro forma but I, but I think youre going to be reporting just the same store sales for Dave and Busters.
Can you give us what the quarter to date was for Dave and Busters.
As it relates to the you know the $13 six versus 19. Thank.
<unk> reported in the third quarter.
Yes, I think just for perspective purposes, when we look and we manage the business we're managing it as one consolidated entity. We have one management team in place we do look at both brands as having a slightly different offering but the way we allocate the resources Accordingly, we put bolt in.
In that same vein so from our perspective, we're trying to do is get to a point, where we are commenting on the consolidated business as a whole because we are redeploying assets between both brands Accordingly on a daily basis.
Okay.
Just I'm trying to think about the trends here and it looks like just as we the first five weeks of the third quarter for Dave <unk> Buster's alone I think that's all you provided at the time was was 17 six and then you reported 13 six guidance.
Guidance for.
Even on a pro form.
On a consolidated basis significant deceleration, we're not guidance, but the quarter to date, even when I'm, making that three point adjustment to 12% versus 17, five there does seem to be a deceleration going on.
I guess your thoughts on what's driving that.
The Eden play when you when you ran and in April drove a really massive.
Really strong result in same store sales doesn't seem to be repeating.
What do you think is driving the it seems like what it looks like it's decelerating momentum.
Well I think I've taken to appoint if youre looking versus 21, you do have the impact of the Delta variance.
Coming to a close kind of the end of October which November had a nice bump if you recall during our earnings call a year ago, when we talked about it on November <unk>.
We had comp store sales, a Dave and Busters, which was 14 plus percent.
For that month alone on the walk in business. So from a 'twenty one perspective, we are lapping that at this point in time.
When you look at the balance of the year in that 'twenty. One period, then omicron hit and the business fell off dramatically. So we do expect to have a much easier comp for the December January period, as we go forward.
Well I wish I can versus 19.
<unk> started the third quarter at 17.
And then it was $13 six for the quarter and now it's closer to 12% consolidated so there is some.
Deceleration versus 19.
Is it what do you think is driving is driving that.
I would just look at just overall trends in the business.
I think from a back to school perspective.
There are economic issues that are out there, although we don't see it as much.
So talk about comp store sales at the levels that we are versus 19.
It's still a remarkable component of this business that shows the strength of the overall business in itself right.
I agreed and then just one question on the <unk>.
Think about the quarter to date and then we think about.
I believe the comment was that or maybe you can confirm that you expect the special events business to be.
Above 19 levels, so kind of no longer a drag but should we think of the whole quarter.
If demand kind of levels remain the same we would think about the quarters being higher than the quarter to date, just just as you consider the lift that you do you have I think probably some visibility on for.
For the special events should we think about the quarter as well.
Higher than what the quarter to date is just given that dynamic.
The short answer is yes.
And then if you look at quarter to date sales just adjusting for the holiday mismatch, which as Mike said, we expect to that mismatch to recover as we move into December that alone you know.
I would tell you that we expect the quarter to date number to end up better than the five weeks, but when you factor that into just the strength in the business the.
Our focus on special events.
The pacing that we're on right now to deliver on special events, we feel great. We feel great about the business, we feel great about the trends and I'm excited that we're in a position to end the year in a really high note.
Great. Thanks, a lot I appreciate it.
Thank you.
The next question will come from Andrew <unk> with BMO capital markets. Please go ahead.
Hey, good afternoon. Thanks for taking my questions. My first one I was curious if you think there's any reason to believe.
Recognizing kind of the overall momentum in the business is still strong.
Has it been.
I'll touch on a slowdown do you think there's any reason to believe that youre seeing any pushback from some of the pricing of some of these pricing adjustments.
Again level, maybe that you made do you have.
Kind of any metrics or data points that youre watching to gauge that.
Yes, so we certainly would.
We certainly have the metrics to it.
Anytime we raise prices that's something that we take very seriously and so we.
We're always going back and doing the postmortem analysis.
We're not seeing no we're.
We're not seeing any pushback or negative reaction or changing consumer behavior related to the price increases.
So in fact, we still feel like that there was room and some aspects of our business to continue to raise prices. So nothing there.
You know I guess I would just point you back to the comments that we've been making is that there is still you know the underlying trends in this business are still very good.
And.
So we still feel good about that.
Okay, Great and then on the.
The synergies and the integration.
What exactly do you have left to do there and you talked about the $17 million annualized I believe how much of the $25 million you actually expect to realize this year on a reported basis.
Okay. So first part of your question Whats left to do.
I'll kind of walk you through what's been done and where we're headed so no immediate actions that were taken at the end of Q2 were really around the head count where we got rid of the duplicative nature of you don't need two chief financial officers, you don't need two Ceos and the like so those decisions were made quickly and.
A minute swiftly.
The next phase that Youre seeing right now, which gave us the confidence to up the ante from 20% to $25 million is really around our supply chain, where we've been able to.
Combined the purchasing power of both brands renegotiate contracts.
That work is now done and we're now entering the next phase of that component, which is around taking certain contracts out to bid and so that RFP process takes a little bit longer much more demanding on the on the.
Germany team rather than just looking at contracts consolidating and eliminating the one that's least favorable for us.
The next phase, which I call the more longer toll step.
Tent pole.
He is really around more systems related and more foundational structural items that we need to make changes to.
Consolidating whether it's the POS system back office accounting systems HR systems, combining 401, K plans if that type of work that's in process and that's the long lead time that takes the 18% to 24 months that we've quoted.
Previously when we started this process.
As far as what we think we're going to experience or see come through.
I think it's at least.
If directionally about $6 million coming through.
In that period, a lot of that is what we're seeing in our food and beverage costing which is helping to offset a lot of the inflationary factors that we've seen before.
Okay perfect extremely helpful and if I could just squeeze one last quick one in here.
You gave the update on <unk> openings is there any change in the way Youre thinking about the 23 store openings I just didn't hear an update to that.
No not at this time, we are very mindful of the timing as it relates to any supply chain issues.
Getting governmental approvals at the local level for permitting and things to that effect. So the the 15 to 17 that we've talked about earlier in the last quarter.
<unk> in place, but we will be providing more details and updates.
When we get to our Investor day coming up.
In the April timeframe.
Great. Thank you very much.
Welcome. Thank you.
The next question will come from Brian Vaccaro with Raymond James. Please go ahead.
Alright, Thanks, and good evening I, just wanted to circle back to the comps and some of the combined versus brand trends I mean, the two brands that have obviously been generating very different levels of <unk> versus 2018, and I think it's important to try to maintain at least a little perspective at least in the near term on how the two businesses are.
Lending because one was up $30 million 40, and one was up say 10, what have you on the D&B side. So I guess just in the spirit of reducing the risk of any confusion with could you provide any breakdown between the quarter to date comp Dnb and main event and maybe give us some perspective on average weekly sales understanding their special events moving around but.
Just to try to.
Keep us all on the same page given given the moving pieces here.
Yeah look I'll give it to you the best that I can so if you're looking at.
The quarter to date from a.
And average weekly sales perspective.
We're working with both brands, it's about 183000.
That is comparable to what we've seen previously it's the same kind of basic 184000 that you saw in Q3.
So the weekly average of what we're seeing is fairly consistent with.
That level of call it.
Yes differentiation or split between the main event and the Dave <unk> Buster's brand that you saw back in Q3 that we showed in the detail to help everybody get their arms around what main event is and to help you guys with your modeling perspectives.
Now if you were out ill add onto if you were looking at the consolidated average weekly sales for 'twenty one for both brands on a consolidated basis that would be about 177000, and if youre looking back to 2019 that number is about 171000. So there is meaningful growth.
In the quarter during that period, just particularly different.
The different brands.
I would say sticking in line with the trajectory that we saw previously.
Okay, perhaps you'd be willing to maybe okay. It will stay for the combined.
So versus 19, Europe I think you said 17, 5% on a combined three year comp in the third and in this quarter, you just reported and that's <unk>.
Slow to say maybe in the 12 now if you make the special events adjustment has the so you've moderated let's say underlying by call. It 500 basis points I don't know if you'd agree with that high level, but around 500 bps on a versus 19.
As one brand decelerating more than the other can you provide any qualitative perspective on.
Main event versus D&B, you know that.
Three year trends one versus the other.
Yeah.
Yeah. So there's no noticeable difference between you know the trends. This is what Youre seeing is just last quarter, we provided the details.
For main event, you know to aid investors and analysts in the modeling since main event is not public before now rolling into the Dave <unk> Buster's, we thought it was necessary to provide that detail. So you can adjust and then going forward you know.
I appreciate where you're coming from wanting more detail going forward. This is the disclosures that we've elected to pursue and it's reflective of how as Kew said or as I said, it's reflective of how we're managing that business and it was 20% of our business.
We don't want to get into providing granular data.
We don't provide that across many different regions.
And.
We're focused on managing the entire enterprise and this is Hal.
We're looking at the business and this is how they want to communicate the business.
To the extent that there ever is a material shift.
Between the two brands and it's and we deem that it's necessary to talk about that and then we will do so just as we've done in the past.
So the trends heading into five weeks for Q4 proportionally between the two brands is comparable to where we've been.
This is just a but this is the disclosure that we're going with going forward.
Okay understood fair enough my follow up I guess is on the margin front.
And I guess I'll take the other Opex line here.
So quite a bit of leverage on the other opex line, I guess versus versus our expectations compared to what you saw in last quarter, we're trying to base it out a little bit I can you just kind of at a high level move through some of the puts and takes I know, sometimes there are swings in marketing swings in R&M and other spend levels that might show up.
In that line.
Any help on sort of the puts and takes on that line in the quarter would be very helpful. Thank you.
I think from a puts.
Puts and takes perspective, I think we continue to see higher costs.
This is area.
Two components of that part of it is external janitorial services.
As we as I said, we've talked about before as we reopened our post pandemic finding labor was difficult. So we did a lot of outsourcing at that point.
As we are seeing today, a recovery in the labor market, where we've got 12% more job applicants for physicians today than we saw a year ago. We are able to now start going back on a strategic basis, and looking and evaluating whether those costs are better off in house versus.
External.
So there is that piece of business, that's growing and we continue to see a.
Higher costs around security wave.
Wage inflation, there has not come down.
When you're asked to include security from the local municipality because there are certain areas that they have cut back on that.
That is a cost that we're absorbing and we wanted to do that.
Because we take the safety of our customers first and foremost as one of the most important table stakes they have in choosing to come to a Dave and busters or a main event.
We also look at things from a from a repairs and maintenance perspective.
We are looking through.
If you kind of go back post pandemic, there was a lot of deferred maintenance in the building. So some people have come back and we have made it a little bit more of investment there on the R&M side from an expense perspective.
Now the recovery aspects of what's offsetting some of that the utility costs that we spoke about before it was a very hot summer that we all had extreme.
Higher energy costs that we had to deal with not only from a usage, but also from a rate perspective.
That utilization is obviously coming down as we get to the cooler months of the winter time, and so those are pretty much the puts and takes that we have.
I appreciate that I'll pass it along thank you.
You got it.
The next question will come from Jeff Farmer with Gordon Haskett. Please go ahead.
Thanks have a couple of questions for you guys. So can you just update us on what Youre seeing some from the lower income consumer.
How large is this cohort for you guys and how are they behaving.
Sure I'll take that.
We've.
<unk>.
We're constantly trying to understand our business understand the trends and certainly understanding how our.
Our guest profiles are impacting our business and Theres really nothing noteworthy there.
Yeah, Theres still strengthen in our business across all demos.
Not seen we haven't seen a disproportionate.
Shifts in trends on a lower end consumer.
Okay, and then just really two modeling ones. The first is simple which is.
Which what interest rates should we be using in our model considering the movement in rates out there and then you guys were talking about 25% commodity inflation last time, we heard from you whats the update there.
Let me start off with commodity inflation so.
If youre looking at 'twenty, one I should say versus 21 in Q2, we were up 17%.
In Q3 were only up 9% and a lot of piece of that is the work that we've been doing around our synergies and really driving home.
On the renegotiation of contracts and combined purchasing power to lower our commodity costs at that point.
When you look at our interest rate remember we've got the seven 625 notes that are outstanding and when Youre looking at LIBOR or sorry, LIBOR sulfur, whereas sulfur plus 500 is the term loan. So you can just look at the forward yield curve. So for the next year and that will give you your.
The interest rate.
Okay. Thank you.
Okay.
The next question will come from Sharon Zackfia with William Blair. Please go ahead.
Hi, good afternoon.
I guess a question on the <unk>.
<unk> per card I know that had been quite elevated kind of in the early innings coming out of the pandemic.
Sure, Dave and Busters.
That's been trending now as we've gotten into maybe a more normalized pandemic status with the consumer.
Yeah, we are.
Sure.
At the same consistent level of what we saw coming out of the pandemic.
So if you look at it over the last year, we've seen.
No decline in the average transaction value of the power card at the kiosk.
Great and then on the EBITDA margin I know you've been targeting 200 basis points over 19, I want to confirm that that's also a target for the fourth quarter.
Then beyond kind of this kind of quarter I assume we're not going to be talking about 2019 anymore, I think things become a little bit more apples to apples when we get into 2023.
Just curious on the Dave <unk> Buster's business, given that you guys have fresh eyes on the business. There had been a lot of volatility pre pandemic with comps negative I mean, what what do you consider a win for <unk>.
Dave and Busters as a slightly positive comps mid single.
What's the what's the winning scenario here as you think about data about sort of the more of that.
Steady state environment, what we're not talking about the consumer still getting back to normal patterns.
Well I'll handle the first part of your question in regards to margin.
Yes, I'm getting pretty tired of talking about 2019 levels as well, but as you do look back to 'twenty, one you still see.
Whether it's the delta variant or the omicron variant.
It just makes for a noisy comparison, so that's why we've been providing 21 and <unk> 19.
The 200 basis point commitment that.
Given a year plus ago.
We still remain committed that that's what we'll be able to achieve on a go on this.
Q4 period.
And then sure enough in terms of defining a win.
Look we're here to grow this business we wanted to.
We're maniacal about growing our business through you know just a very sharp focus on the guest experience.
And.
Driving revenue through.
The way, we manage the way the way we manage our business.
Throughput and focus on guest satisfaction.
And so really I guess what defines a winning is just you know the magnitude of the growth we want to grow as much as possible.
And in all areas of the business So star.
Starting.
We were very focused on growing our guest counts and maximizing our revenue opportunity and so we want to grow with Chuck.
And we want to do it in a way, where it's very profitable and we flow dollars to the bottom line and maximize EBITDA and open as many stores as we can in the future.
So I don't know exactly how to answer your question I can tell you that you know we're we believe right now we are winning.
We're pleased with the results that we're seeing in the fourth quarter.
And you know as we look through the noise of this holiday mismatch and what we're seeing on special events coming on in December .
We're in a winning position right now.
So it's really just in terms of we always want more.
So as we move forward. This is a team that is completely focused on maximizing every single growth opportunity, but doing it you know.
The right way to lead to sustainable results.
Hopefully that answers your question.
Yeah, I suspect he'll tell us more when you put all of that.
Thanks.
Yeah.
This concludes our question and answer session I would like to turn the conference back over to Mr. Chris Morris Chief Executive Officer for any closing remarks. Please go ahead.
Alright. Thank you operator in closing, we'd like to again commend our team for the exceptional results that continue to produce at our stores across the country and for all the hard work being done at our Dallas support center to integrate the main event business and optimize the infrastructure to support the bright future of these two phenomenal brands. Thank you for joining we look forward to keeping you apprised.
Our continued progress on our growth initiatives and we look forward to hosting you at our Investor day in the early part of the year. So happy holidays, everybody. Thank you.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Yeah.
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Yeah.