Q4 2023 Dave & Buster's Entertainment Inc Earnings Call

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Operator: You're listening to Dave & Buster's Live! Good afternoon, and welcome to the Dave & Buster's fourth quarter and full year 2023 earnings conference call. All participants will be in listen-only mode.

You were listening to Dave and Busters lie.

None: Good afternoon, and welcome to the Dave <unk> Buster's fourth quarter and full year 2023 earnings conference call all participants will be in listen only mode.

Operator: Should you need assistance, please signal a 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 1 on your telephone keypad. To withdraw your question, please press star, then 2.

None: Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

None: After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.

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Operator: Please note, this event is being recorded. I would now like to turn the conference over to Cory Hatton, Vice President of Investor Relations and Treasurer. Please go ahead.

None: Please note this event is being recorded.

None: I would now like to turn the conference over to Cory Hatton, Vice President of Investor Relations and Treasurer. Please go ahead.

Cory Hatton: Thank you, operator, and welcome to everyone on the line. Leading today's call will be Chris Morris, our Chief Executive Officer, and Mike Quartieri, our Chief Financial Officer. After our prepared remarks, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Inc. and is copyrighted.

Cory Hatton: Thank you operator, and welcome to everyone on the line.

Cory Hatton: Leading today's call will be Chris Morris, our Chief Executive Officer, and Mike courtyard, our Chief Financial Officer.

Cory Hatton: After our prepared remarks, we will be happy to take your questions.

Cory Hatton: This call is being recorded on behalf of Dave <unk> Buster's Entertainment incorporated and is copyrighted.

Cory Hatton: Before we begin the discussion of our company's fourth quarter and fiscal year-end 2023 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 facts. Therefore, 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 has 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. And with that, it is my pleasure to turn the call over to Chris.

None: Before we begin the discussion on our company's fourth quarter and fiscal year end 2023 results.

None: 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.

None: Any of these items should be considered forward looking statements within relating to future events within the meaning of the private Securities Litigation Reform Act of 995.

None: All such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.

None: Information on the various risk factors and uncertainties have been published in our filings with you.

None: 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.

None: Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP measure contained in our earnings announcement released this afternoon.

None: And with that it is my pleasure to turn the call over to Chris.

Christopher D. Morris: Alright, thank you Cory, good afternoon everyone, and thank you for joining our call today. In our fourth quarter of fiscal 2023, we generated revenue of $599 million and adjusted EBITDA of $152 million. These improved year-over-year results benefited from an extra 14th operating week in the fourth quarter. However, this is partially offset by the considerable weather-related headwinds our business faced in the month of January, as you've likely heard about by now from many of our peers.

Christopher D. Morris: Alright. Thank you Corey good afternoon, everyone and thank you for joining our call today.

Christopher D. Morris: And our fourth quarter and fiscal 2023, we generated revenue of $599 million and adjusted EBITDA of $152 million.

Christopher D. Morris: These improved year over year results benefited from an extra 14th operating week in the fourth quarter. However, this was partially offset by the considerable weather related headwinds our business based in the month of January as you've likely heard about by now for many of our peers.

Christopher D. Morris: The weather disruption resulted in numerous full and partial store closures in our system and contributed a significant headwind to the quarter's comparable store sales growth. Weather aside, I'm pleased with our strong financial results for the final quarter of fiscal 2023 and the year as a whole, which are a testament to the hard work and dedication of our phenomenal team members at our growing portfolio of 223 stores across the country, with respect to our most recent progress in 2024. While there has been some choppiness in the quarter to date and some significant calendar shifts with the timing of spring breaks, I'm even more excited than I have been in the past by the significant progress we have made in our goal of substantially improving the revenue, EBITDA, and cash flow generation of the business over the medium and long term. During the quarter, we opened six new domestic Dave & Buster's stores that are all performing in line with expectations and have historically high ROI. We also signed up for an additional franchising grant, bringing our total signed pipeline of new international stores to 33.

Christopher D. Morris: The weather disruption resulted in numerous full and partial store closures to our systemic contributed a significant headwind to the quarters comparable store sales growth.

Weather aside I'm pleased with our strong financial results for the final quarter of fiscal 2023, and the year as a whole which are a testament to the hard work and dedication of our phenomenal team members at our growing portfolio.

Christopher D. Morris: 223 stores across the country.

Christopher D. Morris: With respect to our most recent progress in 2024.

Christopher D. Morris: While there has been some choppiness in our quarter to date and some significant calendar shifts with the timing of spring breaks I'm, even more excited than I have been in the past by the significant progress in our goal of substantially improving the revenue EBITDA and cash flow generation of the business over the medium and long.

Christopher D. Morris: Term.

Christopher D. Morris: During the quarter, we opened up six new domestic Dave and Busters stores that are all performing in line with expectations and our historically high Rois. We also signed up an additional franchise agreement, bringing our total signed pipeline of new international stores to 33.

Christopher D. Morris: We will discuss in more detail shortly, but we also advanced a number of our organic growth initiatives, all of which are showing positive signs and give us confidence in our ability to drive same-store sales growth in the business. Additionally, due to a rigorous focus on managing expenses, we grew Adjusted EBITDA and further expanded our Adjusted EBITDA margin. We strongly believe that all the work we have done over the last several months has laid a foundation to help us achieve our ambitious yet achievable expectations we have for the business going forward. Fiscal 24 is set up to be a transformative year for our company with significant expected progress on our organic growth initiative, including an acceleration of our remodel program as well as continued growth in our store base and continued focus on cost efficiency.

We will discuss in more detail shortly but we also advanced a number of our organic growth initiatives all of which are showing positive signs and gives us confidence in our ability to drive same store sales growth in the business.

Christopher D. Morris: Additionally, due to a rigorous focus on managing expenses, we grew adjusted EBITDA and further expanded our adjusted EBITDA margins with.

Christopher D. Morris: We strongly believe that all the work we have done over the last several months has laid the foundation to help us achieve our ambitious yet achievable expectations, we have for the business going forward.

Christopher D. Morris: Fiscal 'twenty four is set up to be a transformative year for our company with significant expected progress on our organic growth initiatives, including an acceleration of our remodel program as well as continued growth in our store base and continued focus on cost efficiency.

Christopher D. Morris: I can confidently state that everything we have seen has only strengthened our resolve and our strategic plan, and the belief in our ability to achieve our $1 billion adjusted EBITDA target in the coming years. In fiscal 23, we grew Adjusted EBITDA by $28 million and expanded Adjusted EBITDA margins 80 basis points on a pro forma year-over-year basis, despite a reset of the consumer demand curve relative to the post-COVID Since 2019, our adjusted EBITDA margin has expanded 380 basis points, well in excess of the 200 basis point expansion target, driven by top-line growth and material improvements to our recurring cost structure that provide our business a substantially stronger cash flow base to grow. In 2023, we opened 16 new stores, 11 Dave & Buster's and five main events, with six of these new Dave & Buster's opening in the fourth quarter alone.

Christopher D. Morris: I can confidently state that everything we've seen has only strengthened our resolve and our strategic plan and.

Christopher D. Morris: And the belief in our ability to achieve our $1 billion adjusted EBITDA target in the coming years.

Christopher D. Morris: In fiscal 'twenty, three we grew adjusted EBITDA $28 million and expanded adjusted EBITDA margins 80 basis points on a pro forma year over year basis. Despite a reset of the consumer demand curve relative to the post COVID-19 highs of 2022.

Christopher D. Morris: Since 2019, our adjusted EBITDA margin has expanded 380 basis points well in excess of the 200 basis point expansion target driven by top line growth and material improvements to our recurring cost structure that provides our business a substantially stronger cash flow base to grow.

Christopher D. Morris: In 2023, we opened 16, new stores 11, Dave and Busters and five eight events with six of these new Dave <unk> Busters opened in the fourth quarter alone.

Christopher D. Morris: Our new stores continue to produce exceptional cash-on-cash returns across both brands and remain one of our most accretive investment opportunities. As a reminder, as we showed you during Investor Day, since 2018, our new stores have generated cash-on-cash returns greater than 40%. We still have a very robust pipeline of new units that we plan to open over the next several years that we expect will continue to perform similarly.

Christopher D. Morris: Our new stores continue to produce exceptional cash on cash returns across both brands and remain one of our most accretive investment opportunities.

Christopher D. Morris: As a reminder, as we showed you during Investor day since 2018, our new stores that generated cash on cash returns greater than 40%.

Christopher D. Morris: We still have a very robust pipeline of new units that we plan to open over the next several years that we expect will continue to perform similarly.

Christopher D. Morris: Our business benefits from significant national awareness, which allows us to open stores in new markets with an enormous amount of local excitement, as evidenced by the consistently strong sales our new units generate in their first weeks of operation. Importantly, we have recently optimized our new unit opening strategy to better capitalize on the immediate demand our stores generate by using our loyalty database to capture significantly more relevant information about our new customers and markets, which we expect to translate into a superior level of frequency management and ultimately even higher returns on New Store Capital. Turning to our international development efforts, we recently entered into another international franchise partnership agreement to develop two Dave & Buster's stores in the Dominican Republic.

Christopher D. Morris: Our business benefits from significant national awareness, which allows us to open stores in new markets with an enormous amount of local excitement as evidenced by the consistently strong sales are new units generate in their first weeks of operation.

Christopher D. Morris: Importantly, we have recently optimize our new unit opening strategy to better capitalize on the immediate demand our stores generate using our loyalty database to capture significantly more relevant information about our new customers and markets, which we expect to translate into superior level of frequency management and ultimately even higher returns.

Christopher D. Morris: Yeah.

Christopher D. Morris: Our new store capital.

Turning to our international development efforts, we recently entered into another international franchise partnership agreement to develop to Dave and Busters stores and the Dominican Republic. All told in just two years since we reinvigorated our international strategy. We currently have 33 stores in the international development pipeline across six countries with.

Christopher D. Morris: All told, in just two years since we reinvigorated our international strategy, we currently have 33 stores in the international development pipeline across six countries, with the anticipation of opening up to four of these stores in the next 12 to 18 months. We also continue to engage with potential partners all over the world, which we expect will lead to continued strong growth in this international pipeline over the balance of the year. I'd now like to take a moment to go into a more detailed update on the progress of each of our six key organic growth initiatives. First, marketing optimization. As a reminder, we believe there is a huge opportunity to improve both conversion and guest frequency by getting the right message to the right people at the right time.

Christopher D. Morris: Anticipation of opening up to four of these stores in the next 12 to 18 months.

Christopher D. Morris: We also continue to engage with potential partners all over the world, which we expect will lead to continued strong growth of this international pipeline over the balance of the year.

Christopher D. Morris: Yeah.

None: I'd now like to take a moment to go into more detail.

None: A more detailed update on our progress at each of our six key organic growth initiatives first marketing optimization. As a reminder, we believe there is huge opportunity to improve both conversion and guest frequency by getting the right message to the right people the right time.

Christopher D. Morris: We spoke last quarter about the development of our marketing engine in the pilot program for QuickWins to better engage our existing customers with relevant content and offers to drive frequency. Our material shift to digital marketing allows us to act fast, to build campaigns, and align our spends with more specific business needs, while returning significant data-driven insights about our customers that were impossible to glean from the primarily linear TV approach of our company's past. We have a balance of compelling promotions, paired with our strong product offers, hyper-targeted within paid media at the segment and market level. For example, our Kids Eat Free promo targeted towards families, and $2 beers and all-you-can-eat wings targeted toward young adults.

None: We spoke last quarter about the development of our marketing engine and the pilot program for quick wins to better engage our existing customers with relevant content and offers to drive frequency.

None: Our material shifts to digital marketing allows us to act fast to build campaigns and align our spend with more specific business needs. While returning significant data driven insights about our customer that were impossible to glean from the primarily linear TV approach of our company's past.

None: We have a balance of compelling promotions paired with our strong product offers hyper targeted within paid media at the segment and market level for.

For example, our kids eat free promo targeted towards families and $2 beers in all you can eat wings targeted toward young adults.

Christopher D. Morris: Additionally, we've enlisted top-tier talent and influencers to amplify our seasonal offers and experiences in-store to promote a Spring Break for Everyone campaign and a contextually relevant campaign around March Basketball, along with our Buster Bracket's $1 Million Chip Giveaway, rewarding guests with free play. This combination of hyper-targeted paid media and promotions and influencer talent to amplify unique experiences and offerings across our stores has generated While still in the early innings, our ability to roll campaigns and promotions out swiftly across our growing database of users who are quickly becoming the lion's share of our most profitable guests by visiting us 50% more frequently and spending 15% more on each visit versus non-loyalty guests is having a material impact.

None: Additionally, we have enlisted top tier talent and influencers to amplify our seasonal offers and experiences in store to promote our strength our spring break for everyone campaign and a contextually relevant campaign around March basketball, along with our bustard brackets 1 million chip giveaway rewarding gas with.

None: Free play.

None: This combination of hyper targeted paid media and promotions and Influencer talent to amplify unique experiences and offerings across our stores has generated more effective and efficient campaigns in recent months.

None: While still.

None: Early innings, our ability to roll campaigns and promotions out swiftly across our growing database of users who are quickly becoming the lion's share of our most profitable guests by visiting us, 50% more frequently and spending 15% more on each visit versus non loyalty guests is having a material impact.

None: Our loyalty program grew by 500000 users in the fourth quarter and we continue to drive higher levels of sales penetration with these loyalty guests with improvements we are making.

Christopher D. Morris: Our loyalty program grew by 500,000 users in the fourth quarter, and we continue to drive higher levels of sales penetration with these loyalty guests through improvements we are making. Our loyalty offers are personalized at the tier and individual level to appeal to the specific behaviors of each guest. For example, rewarding our primarily gaming audience with free play incentives and our dining enthusiasts with food and beverage offerings. We believe enhanced personalized engagement is leading to higher guest satisfaction scores by cultivating consistent, newsworthy communication that brings more excited guests into our doors. Tying back to our influencer programs and unique partnerships, we always provide our loyalty members with a first look at any marketing campaign that we launch. And we have exciting big reward giveaways and new promotions planned for this audience in April with the launch of our exciting new menu.

None: Our loyalty offers our personalized that the tier and individual level.

None: To appeal to the specific behaviors of each guest for example, rewarding our primarily gaming audience with free play incentives and our dining enthusiasts with food and beverage offers.

None: We believe enhanced personalized engagement is leading to higher guest satisfaction scores by cultivating consistent newsworthy communication that brings a more excited guests into our doors.

None: Tying back to our Influencer programs and unique partnerships, we always provide our loyalty members with a first look at any marketing campaign that we launched and we have exciting big reward giveaways and new promotions planned for this audience in April with the launch of our exciting brand new menu.

None: In 2024, we expect to channel this power and continually refine the approach, which will ultimately allow us to manage our traffic the frequency and conversion.

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None: Strategic game pricing, we made material strides in the implementation of our new games pricing strategy in the quarter.

Christopher D. Morris: In 2024, we expect to channel this power and continually refine the approach, which will ultimately allow us to manage our traffic via frequency and conversion. Second, strategic gain price. We made material strides in the implementation of our new gains pricing strategy in the quarter. We continue to unlock new abilities and glean insights from various tests across regions by adjusting the multiple layers of price in our gaming ecosystem. We have launched a number of nationwide tests adjusting both absolute price as well as introducing regional differentiation.

None: We continue to unlock new abilities and glean insights from various test across regions by adjusting the multiple layers of price in our gaming ecosystem.

We have launched a number of nationwide test adjusting adjusting both absolute price as well as introducing regional differentiation.

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Operator: Pardon me, ladies and gentlemen, this is the conference operator. We appear to have lost the audio signal from the speaker's location. Please stand by as we try to regain contact.

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Operator: Pardon me, everybody, this is the conference operator. We have regained audio from the speaker's location. Gentlemen, please continue your call. Thank you.

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Christopher D. Morris: Thank you. And everybody, thank you for your patience as we work through this technical glitch. It's our understanding that the call dropped off right at the beginning of strategic game pricing, so I'm going to pick up from the beginning. So our update on the second piece of our strategic plan is strategic game pricing. We made material strides in the implementation of our new game pricing strategy in the quarter. We continue to unlock new abilities and glean insights from various tests across regions by adjusting the multiple layers of price in our gaming ecosystem. We have launched a number of nationwide tests adjusting both absolute price as well as introducing regional differentiation, both of which are showing encouraging results. Specifically, the stores with the highest price increases have shown the most positive impact on sales and have not shown any material negative impact on guest satisfaction, which is encouraging.

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Christopher D. Morris: We enacted a tier point-of-sale pricing change for the power card in mid-February to optimize the buy-in amount and corresponding chips purchased to better align with the significant regional variations across our Dave & Buster's portfolio stores. We expect these changes to provide a significant boost to our entertainment sales in Fiscal 24, highlighting the exciting flow-through possibilities for what has become approximately 65% of our revenue and has consistently delivered over 90% gross margin We are closely monitoring the results of our pricing test and will continue to test, learn, and optimize our strategy with the near-term, near real-time strategic intelligence we are now receiving. I cannot stress enough how exciting these unlocks are for our business and a great leap forward to proactively manage our entertainment pricing while still maintaining a strong value proposition.

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Christopher D. Morris: Third, improved food and beverage. As a reminder, we see a tremendous opportunity to improve the overall quality and service model of our F&B offering in an area we know our company has lost attachment to over the past decade. We believe the steps we are taking to improve our food offering and service model will go a long way towards recapturing our historically higher levels of attachment. As discussed in the past, we have created a multi-phase roadmap to introduce the Dave & Buster's menu of the future and our improved hospitality service model, which we are introducing in close strategic connection with the physical changes of our system-wide store remodel program. In the first full quarter of its rollout, we continued to experience material gains with our Phase 2 menu, which enhanced operational execution by removing unnecessary complexity in the back of the house, improved overall food quality, and accelerated speed of service to drive more throughput at peak.

Pardon me everybody. This is the conference operator, we have regained the audio from the speaker's location gentleman. Please.

None: And your call. Thank you.

None: Okay, Alright, thank you and everybody. Thank you for your patience as we work through this technical glitch, it's our understanding that the call dropped off right at the beginning a strategic game pricing, so I'm going to pick up on it.

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None: Update on the second piece of our strategic plan, a strategic game pricing, we made material strides in the implementation of our new gains pricing strategy in the quarter, we continue to unlock new abilities and glean insights from various tests across regions by adjusting the multiple layers of price in our gaming ecosystem we.

None: We have launched a number of nationwide cast adjusting both absolute price as well as introducing regional differentiation both of which are showing encouraging results.

None: Specifically the stores with the highest price increases have shown the most positive impact to sales and have not shown any material negative impact to guest satisfaction, which is encouraging.

Christopher D. Morris: Since the system-wide launch of Phase 2, we have been testing Phase 3 of our D&B and Menu of the Future in 10 stores and unveiled the final plans and training internally at our annual General Managers Conference in early March. The Phase 3 menu aims to introduce targeted culinary innovation around appetizers, bowls, desserts, and sides that aligns with our new hospitality model and better meets the needs of our guests to drive our cash rate. Just last week, we rolled out our Phase 3 menu to roughly one-third of the Dave & Buster system, and we'll launch it to the remainder of the system on April 15th. Based on how the Phase 2 menus performed since launching system-wide on September 25th and our test results for the Phase 3 menu, we expect to drive at least a mid-single-digit increase in F&B revenue per check. A Material Improvement in F&B COD

None: <unk>, a tier point of sale pricing change for the power card in mid February to optimize the by an amount in corresponding ships purchased to better align with the significant regional variations across our Dave and busters portfolio stores.

None: We expect these changes to provide a significant boost to our entertainment sales in fiscal 'twenty four highlighting the exciting flow through possibilities for what has become approximately 65% if our revenue and has consistently delivered over 90% gross margins.

None: We are closely monitoring the results of our pricing test and we'll continue to test learn and optimize our strategy with near term near real time strategic intelligence. We are now receiving I cannot stress enough how exciting these unlocks our for our business and taken a great leap forward to proactively manage our entertainment pricing.

None: While still maintaining a strong value proposition.

None: Third improved food and beverage as a reminder, we see a tremendous opportunity to improve the overall quality and service model of our F&B offering and an area. We know our company has lots of attachment over the past decade.

Christopher D. Morris: A further 3 to 5 point improvement in food satisfaction scores versus the prior year period. We are very proud of the new menu and service model we have rolled out. In order to drive the most amount of trial and consistent with the results of the test we have done to date, in the coming weeks, we expect to officially launch our new menu nationally in connection with a strong value-focused message which we believe will drive traffic, new loyalty number sign-ups, food and beverage sales, as well as incremental gaming. Fourth, remodels. Nine months ago, we embarked on a store remodel program that, after a substantial amount of research, was designed to accomplish the following five things. Number one, grow overall revenue through the introduction of disruptive entertainment products.

None: We believe the steps we are taking to improve our food offering and service model will go a long way towards recapturing, our historically higher levels of attachment.

None: As discussed in the past, we've created a multi phased roadmap to introduce the Dave <unk> Buster's menu of the future and our improved hospitality service model, which we are introducing in close strategic connection with a physical changes of our system wide store remodel program.

And the first full quarter of its rollout we continue to experience material gains with our phase II menu, which enhanced operational execution by removing unnecessary complexity in the back of house improved overall food quality and accelerated speed of service to drive more throughput at peak.

Christopher D. Morris: Number two, improve F&B sales through a reconfigured dining room, improving operational execution, and an elevated, relevant new design. Number three, grow special event sales through the introduction of more group-related entertainment options. Number four, improve guest engagement and gather important guest data and analytics through the introduction of a digital guest engagement platform. And number five, improve brand relevancy and intent to return through a fresh, modern look. Our first test location was Friendswood in Houston, TX, which embodied our go-forward offering with new attractions, service model, food menu, inserted a dedicated store special event sales team, and completely transformed the look and feel of the space.

None: Since the system wide launch of phase II, we have been testing phase three of our D of the menu the future in 10 stores and unveiled the final plans and training internally at our annual General managers conference in early March.

Phase III menu aims to introduce targeted culinary innovation around appetizers bulb desserts and sides that aligns with our new hospitality model and better meet the need states of our guests to drive our attach rate.

Just last week, we rolled out our phase III menu to roughly one third of the data about your system.

None: We'll launch it to the remainder of the system on April 15.

None: Based on how the phase two menus perform since launching system wide on September 25th and our test results from the phase III menu, we expect to drive at least a mid single digit increase in F&B revenue per check a material.

Christopher D. Morris: During our last call, we highlighted the encouraging results from our first remodel in Friendswood that was exceeding expectations, driving a double-digit sales uplift compared to the prior year and a more than 30% sales uplift compared to 2019. We are very encouraged that now, more than 30 weeks after the completion of this remodel, it continues to perform at these levels. We have hit the mark across all of our objectives with this remodel and are making meaningful improvements with OSAT scores and higher intent to return, and lessened loyalty numbers, and Special Event Revenues up nearly 60%, all of which gives us even more confidence in the importance and staying power of these transformational vessels. Over the past few months, we completed eight additional test remodels. For the test, we intentionally hand-selected a variety of our stores across geography, legacy performance, store age, and layout. Tailored Key Product Office

None: Improvement in F&B Cod.

None: A further three three to five point improvement in food satisfaction scores versus the prior year period.

None: We are very proud of the new menu and service model, we've rolled out in order to drive the most amount of trial and consistent with the results of the test we have done to date in the coming weeks, we expect to officially launch our new menu nationally in connection with a strong value focused message, which we believe will drive traffic new low.

None: <unk> never sign ups, food and beverage attach as well as incremental gaming revenue.

None: Four three models nine months ago, we embarked on our store remodel program that after a substantial amount of research was designed to accomplish the following <unk> number one grow overall revenues through the introduction of disruptive entertainment product news.

None: Number two improve F&B sales through a reconfigured dining room, improving operational execution and an elevated relevant new design number three grow special event sales through the introduction of more group related and entertainment options.

Christopher D. Morris: On average, these test stores have outperformed the balance of the system by 9% post-remodel through March. Additionally, the remodels are exceeding expectations in aggregate across the varying scopes. What has become crystal clear in the test is that our fully programmed large-scale remodels similar to Friendswood are performing exceptionally well relative to the remodels that do not include the enhanced entertainment options. Additionally, our fully programmed remodels are seeing substantial increases in traffic. We have also accumulated a significant amount of learnings on how to improve these results even further, reduce construction time, and minimize costs that will lead to even higher returns. We are very confident in these findings and know what it takes to drive this business.

<unk> improved guest engagement and gather important gas data and analytics through the introduction of a digital guest engagement platform and number five improved brand relevancy and intent to return through a fresh modern look and feel.

None: Our first test location with friends with in Houston, Texas, which embodies our go forward offering with new attractions service model food menu inserted a dedicated store special event sales team and completely transform the look and feel of the space.

During our last call we highlighted the encouraging results from our first remodel in friendswood that was exceeding expectations driving a double digit sales uplift compared to the prior year and a more than 30% sales uplift compared to 2019.

None: We are very encouraged that now more than 30 weeks. After completion of this remodel it continues to perform at these levels.

Christopher D. Morris: Our plan now is to apply what we've done in Friendswood across the next 35 remodeled stores with a strict stage gate process laser focused on our 20% plus return threshold. As a result of that, we will have a total of 40 to 45 stores remodeled by the end of fiscal 24, which we are confident will drive similar outperformance. We are convinced that this remodel program is a significant gateway to the future of the Dave & Buster's brand and the culmination of everything we've set out to achieve through our organic growth.

None: We have hit the mark across all of our objectives with this remodel and are making meaningful improvement with OS out scores and higher intent to return a lesson loyalty members and special event revenues up nearly 60% all of which gives us even more confidence in the importance and staying power of these.

None: Remodel investments.

Over the past few months, we completed eight additional test remodels for the test we intentionally hand selected a variety of our stores across geography legacy performance store age and layout and tailored key product offerings.

Christopher D. Morris: We are making considerable strides reinvigorating our special events business by repositioning the team with a more local, hands-on approach and equipping them with enhanced training and tools to win our fair share. Based on independent tests we run to evaluate our sales team's effectiveness and the competitiveness of our product offering, we believe that these changes in strategy are having the desired outcome. After embedding 20 dedicated sales managers into the D&B stores in the back half of 2023, we are accelerating the rollout of an additional 45 local sales managers at the store level in 2024.

None: On average these test stores have outperformed the balance of the system by 9% post remodel through March.

None: While the remodels are exceeding expectations in aggregate across the bearing scopes.

None: What has become crystal clear in the test is that our fully programmed large scale remodels similar to friendswood are performing exceptionally well relative to the remodels that do not include the enhanced entertainment offering.

Our fully programmed remodels are seeing substantial increases in traffic.

None: Jack and overall same store sales versus the prior year and are outperforming the system double digits with Sun nearing 30% outperformance on a relative year over year basis.

Christopher D. Morris: The upcoming phases of our menu of the future, our refined service model, and our remodeled stores that introduce social bays in the arena, along with a VIP watch area, provide our new sales team areas of focus and are all very conducive to driving additional special event revenue. We are pacing to finish the first quarter up mid-single digits in special event revenue versus 2019, which is a material improvement versus prior quarters. And we have high expectations for our next peak season with graduations in May. 6.

None: We have also accumulated a significant amount of learnings on how to improve these results. Even further reduce construction time and minimize costs that will lead to even higher returns.

None: We are very confident in these findings and know what it takes to drive this business.

None: Our plan now is to apply.

None: What we've done in friendswood across the next 35 remodeled stores with a strict stage gate process laser focused on our 20% plus return threshold.

Christopher D. Morris: Tech enablement. As a reminder, we are powering the growth of all strategic initiatives through an optimized service model, the enterprise gaming ecosystem, new IT infrastructure, and improved data and analytics. In many ways, this is the glue that creates a digital guest platform and connects all the other initiatives together. In 2023, we completed the rollout of our updated IT infrastructure at 62 Dave & Buster's stores, and we'll have the remainder of the Dave & Buster's system complete in 2024, along with full integration of our back office.

None: As a result of that we will have a total of $40 to 45 stores remodeled by the end of fiscal 'twenty, four which we're confident will drive a similar outperformance.

We are convinced that this remodel program as a significant gateway to the future of the Dave <unk> Buster's brand and the culmination of everything we've set out to achieve through our organic growth initiatives.

None: Yes special events, we are making considerable strides reinvigorating our special events business by repositioning the team with a more local hands on approach and equipping them.

None: With enhanced training and tools to win our fair share based.

Christopher D. Morris: We also expect to drive further innovation in our app in 2024 with the integration of additional features in games to engage with our guests before, during, and after each visit. We are proud of the achievements and the long overdue investments we are making in this area to lead the industry in a seamless guest experience. To summarize our Organic Growth Initiative update, we remain very confident that these initiatives will create significant shareholder value by driving our business into a period of material, sustainable, and profitable growth. Our conviction that we are focused on the right areas and making the right investments is unwavering.

None: Based on independent tests, we run to evaluate our sales team effectiveness and the competitiveness of our product offering. We are encouraged that these changes and strategy are having the desired outcomes. After embedding 20 dedicated sales managers into the D&B stores in the back half of 2023, we are accelerating the rollout.

None: With an additional 45 local sales managers at.

None: At the store level in 2020 for.

None: The upcoming upcoming phases of our menu of the future are refined service model and our remodeled stores that introduced social base and the arena along with a VIP watch area provide our new sales team areas of focus and are all very conducive to drive additional special event revenue.

Christopher D. Morris: We look forward to building on the achievements of this quarter and looking forward to continuing to update you on each of these initiatives moving forward with a clear line of sight on our long-term goals. In addition to these organic growth initiatives, we made tremendous strides throughout the year streamlining our business to be more efficient and reduce our recurring costs, which had a material impact on our whole P&L, allowing us to increase adjusted EBITDA and expand our adjusted EBITDA margin. By the fourth quarter, as a percentage of revenue versus the prior year, our cost of food and beverage declined 240 basis points. Our other store, OpEx, declined 80 bases, and our G&A cost declined $180,000.

None: We are pacing to finished the first quarter up mid single digits and special events revenue versus 2019, which is a material improvement versus prior quarters and we have strong expectations for next peak season with graduations in May and June.

None: Yes.

None: Tech enablement.

None: As a reminder, we are powering the growth of all strategic initiatives through an optimized service model enterprise gaming ecosystem, new it infrastructure and improved data and analytics.

None: In many ways. This is the glue that creates a digital guest platform and connects all the other initiatives together and.

None: In 2023, we completed the rollout of our updated infrastructure at 62, Dave and Busters stores and we'll have the remainder of the Dave <unk> Buster's system complete in 2024, along with full integration of our back office systems.

Christopher D. Morris: Our team of exceptional general managers continue to drive down labor costs by improving OSAT scores by implementing efficiencies in our back-of-house operations to reduce hours and redeploying a portion of those hours to guest-facing and revenue-generating front-of-house labor, particularly during peak times. It is important to highlight that we have realized these cost savings and margin improvements during a 12-month economic period characterized by high inflation, a tight labor market, and with same-store sales growth well below our long-term expectations for the business, which underscores the incredible amount of upside in a more normal environment. Given the success in this area as well as the realities of the environment, we have increased our efforts and have implemented a number of new cost savings initiatives that we believe will further reduce our costs.

None: We also expect to drive further innovation in our App in 2024 with the integration of additional features and gains to engage with our guests before during and after each doesn't it.

None: We're proud of the achievements and long overdue investments, we were making in this area to lead the industry and a seamless guest experience.

None: To summarize our organic growth initiative update we remain very confident that these initiatives will create significant shareholder value by driving our business into a period of material sustainable and profitable growth.

None: Our conviction that we are focused in the right areas and making the right investments is unwavering.

None: We looked at building on the achievements of this quarter and look forward to continuing to update you on each of these initiatives moving forward with a clear line of sight on our long term goals.

Christopher D. Morris: We are confident that these additional cost efforts combined with an improving labor market and supply chain will create an increasingly more efficient and profitable organization over time. While the improvements we have made to our recurring cost base have driven a significant amount of margin and profitability, what is most exciting to us is that, at the same time, our operational execution has made great strides in taking care of the guy. We have made very significant improvements to the guest experience with our evolving service model, and we continue to layer on additional enhancements to drive higher OSAT and net promotion. During 2023, our overall satisfaction scores, as well as our overall speed of service, improved by five points. Our social media scores improved by three and a half points.

None: In addition to these organic growth initiatives, we made tremendous strides throughout the year streamlining our business to be more efficient and reduced our recurring cost base, which had a material impact to our whole P&L, allowing us to increase adjusted EBITDA and expand our adjusted EBITDA margins.

None: By the fourth quarter as a percentage of revenue versus the prior year, our cost of food and beverage declined 240 basis points.

None: Our other store Opex declined 80 basis points, and our G&A costs declined 180 basis points.

None: Our team of exceptional general managers continue to drive down labor costs, while improving Oh sat scores by implementing efficiencies in our back of house operations to reduce hours and redeploying a portion of those hours to guest facing and revenue generating front of house labor, particularly during peak times.

Christopher D. Morris: And our net promoter score has improved by 3%. All of these metrics are continuing their trend of improvement thus far in 2024. In fact, we've seen sequential growth in each of these metrics over the past three months, and each metric has reached its respective all-time high since we've been tracking this data. Finally, before I turn the call over to him... I'd like to take a moment to recognize Mike, who we affectionately call..., as he steps away from the day-to-day responsibilities of CFO at the end of April to enjoy a much-deserved retirement. He will leave a positive mark on this company long into the future, having successfully integrated the two great brands of Dave & Buster's and Main Event, built high-class teams, and demonstrated the highest standards of ethics. [inaudible] So with that as a cue, please walk us through a more detailed review of the Q4 results.

It is important to highlight that we realize these cost savings and margin improvements during the 12 months economic period characterized by high inflation, a tight labor market and with same store sales growth well below our long term expectations for the business, which underscores the incredible amount of upside in a more normal.

Environment.

None: Given the success in this area as well as the realities of the environment. We have increased our efforts and have implemented a number of new cost savings initiatives that we believe will further reduce our cost base.

We are confident that these additional cost efforts combined with an improving labor market and supply chain will create and an increasingly more efficient and profitable organization over time.

Yeah.

None: While the improvements we've made to our recurring cost base have driven a significant amount of margin and profitability. What is most exciting to us is that at the same time, our operational execution has made great strides and taking care of the guests.

None: We have made very significant improvements to the guest experience with our evolving service model and we continue to layer on additional enhancements to drive higher <unk> and net promoter scores.

Michael A. Quartieri: Thanks, Chris. We generated fourth-quarter revenue of $599 million and adjusted EBITDA of $152 million for an adjusted EBITDA margin of 25.3%, a 380 basis point margin expansion versus the same period in 2019. Net income in the fourth quarter totaled $36 million, or $0.88 per diluted share. We reported $42 million of adjusted net income, or $1.03 of adjusted earnings per diluted share. Reconciliations of all non-GAAP financial measures can be found in today's press release.

None: During 2023, our overall satisfaction scores as well as our overall speed of service score improved five points.

None: Our social media scores improved three five points and our net promoter scores improved three points.

None: All of these metrics are continuing their trend of improvement thus far in 2024 and fast we've seen sequential growth in each of these metrics over the past three months in each metric has reached their respective all time high since we've been tracking this data.

None: Finally, before I turn the call over time.

None: I'd like to take a moment to recognize Mike who we affectionately call Q.

Time: As he steps away from the day to day responsibilities as CFO at the end of April to enjoy a much deserved retirement.

Michael A. Quartieri: Proforma comparable store sales decreased 7% in the fourth quarter versus 2022, and looking back at a more normalized level of business, we are up 8% versus the fourth quarter of 2019. As a reminder, in the fourth quarter, we are laughing over a fourth quarter of 2022 that had a 14.1% comp to 2019 and an over 25% comp in the last four weeks of the quarter with particularly robust consumer spending. Through early January, our quarter-to-date comp was pacing down low single digits to the prior year, and then the culmination of severe weather, which significantly negatively impacted our business, and a challenging January comparison led to us ending the quarter down 7%.

Time: He will leave a positive mark on this company long into the future having successfully integrated the two great brands that Dave and Busters and main event.

Time: The high class teams and demonstrated the highest standards of ethics and capital stewardship.

So with that Q. Please walk us through a more detailed review of Q4 results. Thanks, Chris we generated fourth quarter revenue of $599 million.

None: And adjusted EBITDA of $152 million for an adjusted EBITDA margin of 25, 3%, a 380 basis point margin expansion versus the same period in 2019.

None: Net income in the fourth quarter totaled $36 million or <unk> 88 per diluted share, we reported $42 million of adjusted net income or $1 three of adjusted.

None: Earnings per diluted share.

Reconciliations of all non-GAAP financial measures can be found in today's press release.

None: Pro forma comparable store sales decreased 7% in the fourth quarter versus 2022, and looking back at a more normalized level of business, we were up 8% versus the fourth quarter of 2019.

Michael A. Quartieri: We generated $97 million of operating cash flow during the quarter, contributing to an ending cash balance of $37 million for total liquidity of $527 million when combined with the $490 million available on our $500 million Revolving Credit Facility, net of outstanding letters of credit. We ended the year with a net total leverage ratio of 2.2 times as defined under our credit agreement.

None: As a reminder, in the fourth quarter, we are lapping over a fourth quarter of 2022 that had a 14, 1% comp to 2019 and in over 25% comp in the last four weeks of the quarter with particularly robust consumer spending.

None: Through early January our quarter to date comp was pacing down low single digits to the prior year and then the culmination of severe weather, which significantly negatively impacted our business and challenging January comparison led to our ending the quarter down 7%.

Michael A. Quartieri: As a small update on future sale leaseback opportunities, we have four owned and operating Dave & Buster's real estate assets today. While we are being judicious in how and when we decide to monetize these assets, we expect these assets, when monetized, to command a premium price in the market versus other comparable real estate given our superior unit economics. Strong Credit, Attractive Brand Attributes, and Commitment to Being a Long-Term Tenant in the Space. Turning to capital spending, we invested a total of $122.6 million in capital additions during the fourth quarter, opening six new Dave & Buster's. We've already opened two new Dave & Buster's and one new main event during the first quarter of fiscal 24 in Schaumburg, Illinois; Folsom, California; and Murfreesboro, Tennessee.

None: We generated $97 million of operating cash flow during the quarter.

None: Contributing to an ending cash balance of $37 million for total liquidity of $527 million when combined with the $490 million available on our 500 million revolving credit facility net of outstanding letters of credit.

None: We ended the year with a net total leverage ratio of two two times as defined under our credit agreement.

None: As a small update on future sale leaseback opportunities, we have for owned and operating Dave and Busters real estate assets today, while we are being judicious in how and when we decide to monetize these assets. We expect these assets when monetize to command a premium price in the market.

None: Versus other comparable real estate, given our superior unit economics strong credit attractive brand attributes and commitment to being a long term tenant in the space.

Turning to capital spending we invested a total of $122 6 million.

Michael A. Quartieri: We expect to open a total of 15 new stores across both brands during Fiscal 24. Additionally, our Board of Directors approved a $100 million increase to our share repurchase authorization, which gives us a total of $200 million of availability to opportunistically repurchase our shares. As you know, we and our board are maniacally focused on driving shareholder value. As we have stated historically, we will use our significant excess free cash flow to invest in new units which continue to generate over 40% cash-on-cash returns, make accretive investments to support our organic growth initiatives, and opportunistically return capital to shareholders. We have a lot to be proud of in this fourth quarter and full year 2023 results. We grew Adjusted EBITDA and continue to expand our industry leading Adjusted EBITDA margins.

None: In capital additions during the fourth quarter opening six new Dave <unk> Busters, we've already opened two new Dave <unk> Busters and one new main event during the first quarter of fiscal 'twenty, four and Schaumburg, Illinois fulsome.

None: Olson, California in Murphy's Borough, Tennessee.

None: We expect to open a total of 15 new stores across both brands during fiscal 'twenty four.

None: Our board of directors approved a $100 million increase to our share repurchase authorization, which gives us a total of $200 million of availability to opportunistically repurchase our shares.

None: As you know, we and our board are maniacally focused on driving shareholder value.

None: As we have stated historically, we will use our significant excess free cash flow to invest in new unit, which continued to generate over 40% cash on cash returns make accretive investments to support our organic growth initiatives and Opportunistically return capital to shareholders.

Michael A. Quartieri: Strengthening our balance sheet and credit profile, lowering our controllable interest costs, and bought back 17.5% of our shares outstanding, all to the benefit of our shareholders. We have considerable high ROI investment opportunities to grow organically. Both by improving our existing store base and opening new stores with a pipeline of attractive international frontiers on the horizon, I have tremendous confidence that the trajectory ahead will bear material fruit for all stakeholders. Now, operator, you can open up the line for questions.

None: We have a lot to be proud of in this fourth quarter and full year 2023 results. We grew adjusted EBITDA continued to expand our industry, leading adjusted EBITDA margin.

Strengthening our balance sheet and credit profile lowered our controllable interest cost.

None: And bought back 17, 5% of our shares outstanding.

None: All to the benefit of our shareholders.

None: We have considerable high ROI investment opportunities to grow organically, both by improving our existing store base and opening new stores with a pipeline of attractive international frontier is on the horizon.

I have tremendous confidence that the trajectory ahead will material group for all stakeholders.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To draw your question, please press star, then 2.

None: Now operator, you can open up the line for questions.

None: We will now begin the question and answer session.

None: To ask a question you May press Star then one on your telephone keypad.

None: If you were using a speakerphone please pick up your handset before pressing the keys.

None: To withdraw your question. Please press Star then two.

Jake Rowland Bartlett: Our first question today comes from Jake Bartlett with Truist Securities. Please go ahead. Great. Thank you so much.

None: Our first question today comes from Jake Bartlett with <unk> Securities. Please go ahead.

Jake Rowland Bartlett: Great. Thank you so much.

Christopher D. Morris: You know, my first question was about, you know, the recent performance. And, Chris, you talked about feeling more confident in the plan, more confident than ever. You also mentioned that results have been choppy so far. We've seen that, you know, industry-wide. So, what can you point to and, you know, hopefully, you could point maybe to some specific change in trajectory here from January. But any more detail there, and what gives you such confidence that things are actually getting more encouraging for you?

Jake Rowland Bartlett: My first question was about.

Jake Rowland Bartlett: The more recent performance and Chris you talked about feeling more confident in the plan more confident than ever and we also mentioned that results have been choppy quarter to date, we've seen that industry wide. So so what can you point to and hope he could point, maybe choose some specific change in trajectory here from from January but.

Jake Rowland Bartlett: Any more detail there and what gives you such confidence that things are actually getting more encouraging for you.

Christopher D. Morris: Yeah, absolutely Jake. You know, every area that we're focused on and everything that we've outlined during our investor day, we're making progress, and we're seeing the impact on the business. I think the thing that's most encouraging is that we've been hard at work in F23. We've been hard at work at, you know, testing, learning, and adjusting.

None: Yes, absolutely Jake.

None: At every area that we're focused on and everything that we've outlined during our Investor day.

None: We're making progress and we're seeing the impact on the business I think the thing that's most encouraging as we've been hard at work in F. 'twenty three we're hard at work at testing learning adjusting.

Christopher D. Morris: And we are now in a position where we are executing these initiatives that have already been tested and validated. And so that gives us great confidence that as we execute these, we will be able to continue to drive the same impact that we saw during the test period. And so when we go through, you know, F&B, we have a brand new menu that's rolling out. And we know that that menu is driving check, it's improving speed of service, it's setting our operators up for success. And there's no doubt in our mind that, over time, that's going to be a big contributor to our attachement. We know that we've been able to successfully pass through menu price increases with strategic game pricing. That's something we didn't have figured out last year. We now have the ability to tier our pricing and have different prices in different parts of the country. That seems so simple, but the company has never had that before. This is the first time we've been able to have different game prices in different parts of the country.

None: And we are now in a position where we are executing these initiatives that have already been tested and validated and so that gives us great confidence that as we execute these so that we will be able to continue to drive the same impact that we saw.

None: During the test period, and so when we go through F&B, we have a brand new menu, that's rolling out and that we know that that menu is driving check it's improving speed of service at setting our operators up for success and there is no doubt in our mind over time, that's going to be a big contributor to our attach we know that we've been able to successfully pass through.

None: Menu price increases with strategic game pricing, that's something we didn't have figured out last year. We now have the ability to tier our pricing and have different pricing in different parts of the country that seems so simple, but yet the company has never had that before this is the first time, we've been able to have different game pricing and different parts of the country.

Christopher D. Morris: And so we've tested that, and we see that we're able to flow dollars through. That gives us confidence. You know, the work that we're doing on special events and, you know, the fact that we are on pace to exceed the pre-pandemic levels and we have so many other things coming down the pike for special events, preparing our teams for the May and June busy season school events and then setting ourselves up for banquets towards the end of the year. The new service model is driving the results. And we just rolled that out at our operator conference in March, and, you know, you saw, you heard in my remarks, those are meaningful improvements that we've made to the guest experience. We're still a long ways away from where we want to be, but there is no doubt that we're better than where we were.

None: And so we've tested that and we see that were able to flow through that gives us confidence the work that we're doing on special events and.

None: The fact that we are on pace to exceed the pre pandemic levels and we have so many other things coming down the pike.

On special events and preparing our teams for the May and June busy season school events and setting ourselves up for banquet towards the end of the year. The new service model is driving results and we just rolled that out at our operator conference in March and you saw you heard over in my remarks.

None: Those are meaningful improvements that we've made to the guest experience, we're still a long ways away from where we want to be but there is no doubt that we're better than where we've been.

Christopher D. Morris: And, you know, every month for the past three months, we've been setting record highs in all of our key satisfaction metrics. And that's before we roll out our new refined service model system-wide that we just introduced at the conference. That has us excited. Our remodels, what we walked through, before, we didn't know exactly how to program a remodel. We didn't know what the right amount of spending was. We now have that answer, and the answer is crystal clear, and it's compelling.

None: And.

Every month for the past three months, we've been setting record highs in all of our key satisfaction metrics and Thats before we rolled out our new refined service model system wide that we just introduced that conference.

That has us excited.

None: Our remodels that you know what we walked through now we've before we didn't know, which you know exactly how to program a remodel we didn't know what was the right amount of spending we now have that answer and the answer is crystal clear and it's compelling.

Christopher D. Morris: We're not only hitting our return thresholds; we're exceeding those thresholds. You see us ramping that up, and now we have confidence that we're taking what we did in Friendswood and rolling that out across 35 stores next year. By the end of the year, we'll have 44 in the system, but at the same time, we're going to continue to evaluate to make sure that we are getting the returns that we expect. So they're, you know, and international, you know, we just now are getting real momentum on international, our new units continue to perform. So we just have to keep going. We're seeing so much progress in all these different initiatives, and this is the year. This is why we said it was a transformative year. This is the year when all these initiatives will start to layer on top of each other, and we believe it will go a long way to putting us on the trajectory of accomplishing our long-term goals.

None: We're not only hitting our return thresholds, we're exceeding those thresholds.

None: So you see us ramping that up and so now we have confidence that we're taking what we did in friendswood and we're rolling that out across 35 stores next year. So by the end of the year, we have 44 in the system, but at the same time you know we're gonna.

None: We continue to evaluate to make sure that we are getting the returns that we expect so there yes and.

We just now we're getting real momentum on international our new units continue to perform so we just we have.

None: We're seeing so much progress in all these different initiatives and this is the year. This is why we said it's a transformative year. This is the year when all of these initiatives will start to layer on top of each other and we believe will go a long ways to.

None: But it is putting us on the trajectory to accomplishing our long term goals.

Jake Rowland Bartlett: Great, great. That's really helpful, and I appreciate the detailed response there. You know, I guess the question, another question that I have is, you know, understand that this is the year to implement these changes, but you also have to contend with where the consumer is right now. So we think about, you know, price increases. We have found a pretty significant increase in the just cost per chip for buy-in. You know, phase two of the menu of changes is, I think, largely increasing the check.

None: Great great.

None: Help and I appreciate the detailed response there you know I guess the question. Another question that I have is you understand that this is the year to implement these changes but.

You also have to contend with where the consumer is right now. So we think about the price increases we had found that pretty significant increase in the cost per chip.

None: We're buying.

None: Phase two is the menu changes isn't I think largely increasing the check that's one of the biggest drivers to the sales impact so it might be a good thing to do but is the consumer.

Christopher D. Morris: That's one of the biggest drivers of the sales impact. So it might be a good thing to do, but is the consumer in a spot to take, you know, to accept some of those increases? Is this the right time, you know, for the consumer? That's why I'm wondering about the quarter date and just how what you're seeing, you know, how the consumer is actually responding to all this in this particular environment. Any detail there would be helpful.

None: Spot to take two except some of those increases is this the right time.

None: For the consumer that's where I'm wondering about the quarter to date and just just what youre seeing how the consumer is actually responding to all of this in this particular environment any detail there would be helpful.

Christopher D. Morris: First, I think the way you're thinking about it is exactly right. You have the right instincts, and it's something we think about all the time, making sure that we're navigating the business to meet the consumer where they are right now. What I can tell you about pricing, let's kind of step through each one of those. On the game pricing, keep in mind, that's not something we did system-wide. We did it region by region, and we did it testing along the way, evaluating, and ensuring that we were protecting the value proposition.

None: Well I mean first I think the way Youre thinking about it is exactly right and.

None: And so then you have the right instincts and it's something we think about all the time is making sure that we're navigating the business to meet the consumer where they are right now.

None: But what I can tell you on pricing what kind of step through each one of those on the game pricing.

None: Keep in mind, that's not something we did system wide, we did it region by region and we did it testing along the way evaluating and sharing that we are protecting the value proposition and so we have a lot of confidence that we've not only been able to.

Christopher D. Morris: And so we have a lot of confidence that we've not only been able to pass through price in the right areas but do it in a way where the value proposition is held intact. On food and beverage, you are correct that we are seeing an increase in check. That's not being driven by price; that's being driven by a favorable mixture. And so we're just simply being very smart about the products that we're offering and doing it in a way where the guest is selecting items that they see real value in and doing it in a way that also drives check. We have a lot of confidence that our food satisfaction scores have grown substantially in both phase two and phase three. We also have a lot of confidence that the service model that we're implementing, we're investing dollars, taking dollars out of the back and investing them in the front, and enhancing our overall guest experience.

None: Pass through price in the right area, but do it in a way where the value proposition is held intact on food and beverage you are correct that we are seeing an increase in check.

None: That's not being driven by price, that's being driven by a favorable mix shift and so we're just simply being very smart about the products that we're offering and do it in a way to where the guest is selecting items.

None: Items that they believe they see real value in and in general way that also drives check.

None: We have a lot of confidence that our food satisfaction scores have grown substantially.

None: Both phase II and phase III.

None: We also have a lot of confidence that the service model that we're implementing we're investing dollars taking dollars out of the back investment in the front and enhancing overall guest experience, we think that helps.

Christopher D. Morris: We think that helps drive the value proposition for the guest. At the same time, we're also, and this is where, as we continue to refine our marketing muscle, and that's just going to get better and better, we are better equipped today than ever before to be nimble and to not only roll out the right discounts but do it in the right way where we're aiming at the right guests. And that's something that we're just going to get better and better at as we move forward. But you saw us kind of pivot, you know, here recently. We've introduced $2 beers that are timed with the NCAA Tournament. We have All-You-Can-Eat wings. And on Thursday, both of those are going very well. And we have Kids Eat Free, that's really aimed at families.

None: Drive the value proposition for the guest.

None: The same time, we're also and this is where as we continue to refine our marketing muscle and that's just going to get better and better we are better equipped today than ever before.

None: To be nimble and to.

None: Not only rollout there right discounting, but do it in the right way, where we're aiming at the right guest.

None: And that's something that we're just going to get better and better as we move forward, but you saw us kind of pivot here recently, we've introduced $2 beers that timed with the Ncw tournament. We have all you can eat wings and on Thursday, both of those are going very well.

None: And we have kids eat free that's really aimed at families. We feel good about that and we've got you know we've got an offer that we're gonna be announcing here in a couple of weeks and that we think really kind of hit that a lot of the things that we've been doing strategically but also to address its value.

Christopher D. Morris: You know, we feel good about that. And we've got, you know, we've got an offer that we're going to be announcing here in a couple of weeks that we think really kind of hits a lot of the things that we've been. So the trick is, you know, balancing. We think we're being very careful about where we're taking price versus value, and, you know, as I've now said, I think this is the third You know, that's a muscle that we're in the process of developing. We're better than we were, but we're going to get better going forward.

None: So the trick is balancing we think we're being very careful about where we're taking price versus value and.

None: As I've now said I think it was the third time I've said this we're going to get better and better at that that's a muscle that.

None: That we're in the process of developing were better than we've been but we're going to get better going forward.

Christopher D. Morris: Great! I really appreciate it.

None: Great I really appreciate it you.

Christopher D. Morris: You got it.

None: You bet. Thank you.

Andrew Marc Barish: The next question is from Andy Barish with Jeffreys. Please go ahead. Good evening, guys. I know you're not offering, you know, kind of guidance today, but in, in, in your remarks in the press release, Chris, which talks about, you know, adjusted EBITDA margin improvement in regard to fiscal 24, is that something that, even without the additional cost savings you were, you know, thinking about as you come into this new year?

None: Next question is from Andy Barish with Jefferies. Please go ahead.

Andrew Marc Barish: Hey, good evening guys.

Andrew Marc Barish: And I know you are not offering guidance.

Andrew Marc Barish: Today, but in in your <unk>.

Andrew Marc Barish: In the press release, Chris I mean, it talks about.

Andrew Marc Barish: Adjusted EBITDA margin improvement in regard to fiscal 'twenty four.

Andrew Marc Barish: Is that something that you.

Andrew Marc Barish: Even without the additional cost savings you were you know you were sort of thinking about as you come into this new year.

Andrew Marc Barish: Yeah.

Christopher D. Morris: Yeah, no, absolutely. It's something that we're always thinking about. And that's, we will always have that mindset. You know, our approach is, we're developing a culture that is absolutely maniacal about eradicating waste in the business and not allowing it to occur because we're so committed to our strategic initiatives. And so we're constantly looking for opportunities, you know, to be efficient, so then we can be best in the right area. And so that's just something that, you know, we will always be doing.

None: Yes no.

Absolutely, it's something that we're always thinking about and that's what we will always have that mindset.

None: Our approaches.

None: We are developing a culture that is absolutely maniacal about eradicated waste in the business.

None: And not allowing it to incur because we're so committed to our strategic initiatives and so we're constantly looking for opportunities to.

None: To be efficient. So then we can invest in the right areas.

And so that's just something that we will always be doing.

Andrew Marc Barish: Gotcha. And then, um, on the remodels, um... It sounds like, you know, the full remodels are where you're heading. I think, you know, initially, the split was more kind of half and half between kind of the full touches and the lighter touches. Should we be kind of thinking about that, you know, over the next couple years as being more skewed towards the full remodels at this point?

None: Got you and then.

None: On the Remodels.

None: It sounds like.

The full remodels are where you're heading I think.

None: Initially.

The split was more kind of half and half between kind of a full touches and the lighter touches.

None: Should we be kind of thinking about that.

Over the next couple of years as being more skewed towards the <unk>.

None: The full remodels at this point.

Christopher D. Morris: At this point, the answer is yes, and I'll let Q jump in here and provide some more color on the financial side. But, as I said, the real benefit to where we are in our journey is the fact that we have gone through the testing phase. And so as we move forward, we're moving forward with confidence. But it is very clear in the testing that we've done that the fully-programmed remodel... not only generates, hits our return threshold.

None: At this point the answer is yes, and I'll, let you jump in here and provide some more color on the financial side, but as as I said that the real benefit to wherever you are in our journey is the fact that we.

None: Have gone through the testing phase and so as we move forward, we're moving forward with confidence, but it is very clear.

None: And the testing that we've done that the fully program Remodels.

None: Not only generate.

None: It hit our return thresholds.

Christopher D. Morris: But I think that what has us so enthusiastic is the manner in which we're driving the results. It's not just the results. You know, we see the staying power at Friendswood.

None: But I think that what has us.

None: So enthusiastic is the manner in which we are driving the results. It's not just the results we see the staying power of friendswood and the other as we've extended that test beyond the units.

Christopher D. Morris: And the other thing, as we've extended that test beyond, is that the units where we're driving the results, we see it building over time. When we dig into the numbers... It's coming from the reason we took so much time to walk you through, and remind you of our objectives for the remodel, is because each one of those objectives is leading to results. We're seeing the incremental entertainment offerings that we've provided, we're expanding our variety, each one of those, on a stand-alone basis, is generating our returns on a stand-alone basis. And then combined, we believe they're creating just the right energy that's lifting all traffic. We're seeing double-digit increases in special events when we add these new entertainment options. We're seeing improved service model execution.

None: Where we're driving the results we see it building over time, when we dig into the numbers. It's coming from you know the reason we took so much time to walk you remind you of our objectives for the remodel is because each one of those objectives are leading to the results we're seeing.

None: The incremental entertainment offerings that we've that we've provided we're expanding our variety each one of those on a standalone basis are generating.

None: Our returns on a standalone basis, and then combined we believe they are creating just energy that's lifting all traffic, we're seeing double digit increases in special events. When we add these new entertainment offerings, we're seeing improved service model execution, we're seeing in a couple of stores, we're seeing very significant growth in food and Bev.

Christopher D. Morris: We're seeing, in a couple of stories, very significant growth in food and beverage mix. So we're able to trace the results into the remodel, and so that gives us a lot of confidence. But it's moving forward. It's a little more capital intensive, but the team has done a great job at value engineering and taking costs out. And so I'm going to have Q walk you through that.

None: Average mix so.

None: We were able to trace the results into the remodel and so that gives us a lot of confidence, but it's moving forward, it's a little more capital intensive but the team has has done a great job at value.

None: <unk> engineering, and taking cost out and so I'm gonna have Q walk you through that.

Michael A. Quartieri: Yeah, I think it's an important aspect to think about when you start talking about what a light touch is. That has probably more to do with the fact that the stage of the building and the condition that it's in, the size of it, as it is the amount of additional work that's going into expanding the full offering from an entertainment perspective. So when we start talking about lighter touches, those are stores that are, you know, around the 20,000, 25,000 foot locations. They're more current in the pipeline where they've been built, probably, in the last five years versus some of the older stores or the larger, say, footprints of the DB1s and 2s, which are more in that 40,000 to 45,000 square foot location. So, all in all, I think the CapEx that we laid out previously will still be fairly close to where we'll end up on this journey over the next two years or so.

None: <unk>.

I think that's an important aspect to think about when you start talking about what a light touch is that has probably more to do with the fact that the stage of the building and the condition that it's in the size of it as it is the amount of additional work that's going into to expand the full offering from an entertainment perspective, so when.

None: We started talking about lighter touch is those are stores that are.

None: Around the 20% 25000 locations.

None: There are more current in the in the.

None: The pipeline, where they've been built like probably like in the last five years versus some of the older stores or the larger safe footprints of the DB ones and twos.

None: Which are more in that 40% to 45000 square foot location. So.

None: All in all I think the Capex that we laid out previously we will still be fairly close to.

None: Where we'll end up over this journey over the next two years or so.

None: So just to summarize.

Christopher D. Morris: To summarize, we are moving more into the large format, but the big benefit is we've been able to drive down the capital investment. At the same time, the performance has exceeded our expectations. And so we're very confident that we're going to hit our return thresholds. We're actually, you know, cautiously optimistic that we're going to exceed our return threshold at www. TheBusinessProfessor.com. We will have the ability to pivot at the right time and redirect.

None: We're moving more into the large format, but the big benefit is we've been able to drive down.

The capital investment at the same time the performance has exceeded our expectations and so we're very confident that we're going to hit our return thresholds, we're actually cautiously optimistic that we're going to exceed our return thresholds.

None: But you know youre going to continue to see from this team a very disciplined approach when it comes to capital allocation. So we're committed to doing those 35, but we built in the right stage gates that if for some reason were not replicating. These results we will have the ability to pivot at the right time and redirect.

Jeffrey Daniel Farmer: The next question is from Jeff Farmer with Gordon Haskett. Please go ahead. Thank you. I just wanted to follow up on the tiered pricing efforts, more specifically how we should be thinking about the scale of those increases or the potential scale of those increases. Anything you can offer there in terms of order of magnitude as you've gone ahead and made some changes to the pricing structure on the gaming side and amusement side?

None: The next question is from Jeff Farmer with Gordon Haskett. Please go ahead.

Jeffrey Daniel Farmer: Thank you just wanted to follow up on the tiered pricing efforts more specifically, how we should be thinking about the scale of those increases or potential scale of those increases.

Jeffrey Daniel Farmer: Anything you can offer there in terms of order of magnitude as you've gone ahead and made some changes to the pricing structure on the gaming side.

Jeffrey Daniel Farmer: Amusement side.

Christopher D. Morris: Yeah, what I'll tell you is that during our investor day last June, we sized up the opportunity, and we said that we believe that there is an opportunity to add a 10% increase in strategic gain pricing over a period of time, and we're still committed to that. And so we still believe that that's a good number. What you'll see as we move forward into F24 is that the price is going to be different from region to region, but we would expect to pass through a price increase that would be consistent with what we communicated on investor day, which is 10% over a longer period of time. So 2024 would be a step in that direction.

None: Yeah, well what I will tell you is we are at during the Investor Day last June we sized up the opportunity and we said that we believe that there is approximately theres an opportunity to add a 10% increase in strategic game pricing over a period of time, and we're still committed to that and so.

None: We still believe that that's a good number.

None: You'll see.

None: As we move forward into F. 'twenty four is that the price is going to be different region to region.

None: But we would expect the pass through.

None: Rice increase that.

None: Yeah that would be consistent with what we communicated in Investor day, which is 10% over a longer period of time, So 2024 would be a step in that direction.

Brian Michael Vaccaro: The next question is from Brian Vaccaro with Raymond James. Please go ahead. Hi, thanks, and good evening.

None: The next question is from Brian Vaccaro with Raymond James. Please go ahead.

Hi, Thanks, and good evening, just a question on sales if we could go back to that Mike I think you said you were running down low single digit comps up until January which is if my quick math is right. You know January was down somewhere low to mid teens.

Brian Michael Vaccaro: Just a question on sales, if we could go back to that. Mike, I think you said you were running down low single-digit comps up until January, which, if my quick math is right, you know, January was down somewhere low to mid-teens year-on-year. I want to just confirm that was right first. Sorry, quick math here. But and if it is, you know, I understand it's really murky, but how do you view sort of the underlying comp trend? And what's a reasonable expectation near-term for when comps might stabilize, if not turn positive, moving through 2024?

None: Year on year I wanted to just confirm that was right for sorry quick math here, but and if it is I understand it's really murky, but how do you view sort of the underlying comp trend and what's a reasonable expectation near term for when comps might stabilize if not turned positive moving through 2024.

Michael A. Quartieri: Well, I'll kind of preface it this way. I think your math is fairly close, because when we look at

None: Ill kind of preference with this one I think your math is fairly close because when we look at when we exited out of the holiday.

Michael A. Quartieri: when we.

Operator: [inaudible] The weather impact did have a significant impact. We had close to 60-plus stores that were either partially closed or fully closed for a certain number of days during that period of time. So there was a material impact on us. As we look forward to the consumer trends and everything else... You know, I think it's kind of hard for us to pinpoint given the uncertainty, and I say what uncertainty is: there's so much holiday mismatch around spring breaks at this point in time and the continued choppiness that we're seeing, so, you know, at this point, we're continuing to be focused on the longer-term objectives. You heard the passion that Chris had in laying out each of the strategic initiatives that we have, and all of those will, you know, continue to produce green shoots.

None: Season, Youre looking at it being about the end of the first full week of <unk>.

None: January which is right at the time that we were talking about comping over that 20% Mark.

None: That plus the.

None: The weather impact did have a significant impact we had to close to 60 plus stores that were either partially closed or fully closed for a certain number of days during that period of time. So there wasn't a material impact to us as we look forward to the consumer trends and everything else.

None: I think it's kind of hard for us to pinpoint given the uncertainty and I would say when uncertainty is there is so much holiday mismatch around spring breaks at this point in time.

None: And the continued choppiness that we're seeing so at this point, we're continue to be focused on the longer term objectives.

None: You heard the passion that Chris has been laying out each of the strategic initiatives that we have.

None: And all of those will continue to just produce green shoots.

<unk> provided with a better return as we get further into the year and beyond.

Andrew Strelzik: The next question is from Andrew Strelzik with BMO. Please go ahead.

None: The next question is from Andrew <unk> with BMO. Please go ahead.

Andrew Strelzik: Hey, thanks for taking the question. You know, it's been almost I guess a year since investor day when you laid out kind of the earnings bill towards your targets. And so I guess I'd be curious to hear you kind of take a step back and frame where you are now in terms of versus where you maybe would have expected to be at that point in time. Are there some of the initiatives where you're seeing more or less traction than you expected?

Andrew: Hey, Thanks for taking my question.

Andrew: You know I guess, it's been almost I guess a year since the Investor day, when you laid out kind of the earnings build towards your EBITDA.

Andrew: EBITDA targets and so I guess I'd be curious to hear your kind of biggest cutback and frame where you are now in term versus where you maybe would have expected to be at that point in time or are there are there some of the initiatives, where youre seeing more or less traction than you expected or where you're ahead or behind on timelines and kind of if you were to recast your expectations anything.

Christopher D. Morris: where you're ahead or behind on timelines and

Christopher D. Morris: If you were to recast your expectations, would there have been anything different versus at that time?

Andrew: That would've been different versus at that time.

Christopher D. Morris: Yeah, that's a great question. So I'll tell you the way that we have been thinking about this journey that we've all been on is that internally, we've always referred to year one as the year of the foundation. And the reason we describe it as the year of the foundation is because there was so much infrastructure work that we needed to do just to catch up on what we would refer to as, at www.thevenusproject.com. So there's a lot of work to do on the infrastructure. There's also a lot of testing that needs to be done.

None: Yeah, that's a great question.

None: So I'll tell you the way the way that we have.

None: He had been thinking about this journey that we've all been on is the <unk>.

None: <unk>, we've always referred to your wanted the year the foundation.

And the reason that we describe it as a year of the foundation is because there was so much infrastructural work that we needed to do.

None: Just to catch up for what we referred to as.

15 years of neglect in this business you know there is from a system standpoint, the systems, we're just way behind where they needed to be the processes, we're way behind where they needed to be.

Christopher D. Morris: And so where we are right now is that we're right on schedule, you know, we've executed everything that we set out to do on the infrastructure, we've tested everything that we set out to do, and we are now in the process of implementing all of those initiatives. And so I'm very proud of the work that the team has done. We're right where we want to be in terms of remodels. Our new units continue to perform exceptionally well. We're on pace for international, right in line with what we were expecting when we built out our long-term plan. Game pricing is where we thought we'd be, just given the system limitations, at www.thevenusproject.com.

None: As evidenced by the fact that I just mentioned that.

None: We didn't even have the ability to have variable pricing across regions.

None: So theres a lot of work to do on the infrastructure.

None: There's also a lot of testing that needed to be done.

None: And so I you know where we are right now is we're right on schedule.

None: We've executed everything that we set out to do on the infrastructure. We've tested everything that we set out to do and we are now in the process of implementing all of those initiatives and so I am very proud of the work that the team has done.

None: We're right, where we wanted to be on Remodels, our new units continue to perform exceptionally well we're on pace on international right in line with what we were expecting when we built out our long term plan.

None: Gain pricing is where we thought we'd be just given the system limitations.

None: Our food and beverage offering I feel very good about the work that we're doing there and the results that we're driving in the new service model as evidenced by the impact that we're already having on the guest experience so on.

Christopher D. Morris: And so this is what we did say, look, this is a journey that we're on, and clearly, there is tremendous upside in this business. There's upside on each one of these initiatives when you size them up, and there's an enormous amount of upside in the value of the stock. And we continue to believe that the stock is significantly undervalued with the potential that we have in front of it. The unknown is just the macro environment and, you know, what's going to happen with the consumer and any uncertainties. And so our focus is just focusing on what we can control, and clearly, what we can control, we're executing it. And there's, as we've dug deeper into each one of these initiatives, we're as confident as we ever have been in being able to make a positive impact on this business over the medium term. So, the timeline might shift a little bit here or there, but, you know, we're still committed to getting the job done.

None: On the initiative side of things I'm very proud of the work the team is doing.

None: So this is but what we did say as I look this is.

None: This is a journey that we're on and clearly there is tremendous upside in this business. There is upside on each one of these initiatives when you size it up and Theres collectively an enormous amount of upside in the value of the stock and we continue to believe that the stock is significantly.

None: Undervalued with the potential that we have in front of us.

None: The unknown is just the macro environment and you know.

None: What's going to happen with the consumer in any uncertainties and so our focus is just focusing on what we can control and clearly what we can control we're executing against.

None: And there is as we've done deep dive deeper into each one of these initiatives, we're confident as we ever have been and being able to make a positive impact on this business over the medium term.

And so the timeline like just a little bit here or there.

None: But we're still committed to getting the job done.

Sharon Zackfia: The next question is from Sharon Zackfia with William Blair. Please go ahead.

None: The next question is from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia: Hi, thanks for taking the question. I wanted to go back to the kind of phases of what you're doing with the gaming prices. I know you indicated that that's been a positive going through to the bottom line. I guess I'm curious about the kind of impact there is from maybe, you know, people staying longer. I mean, is it, or staying for a lesser amount of time because the power cards are eaten up quicker? I mean, what is the, or is there any potential offset that you're seeing the game price increase?

Sharon Zackfia: Hi, Thanks for taking my question.

Sharon Zackfia: I wanted to go back to me that kind of phases of what Youre doing with the gaming prices I know you indicated that that's been a positive.

Sharon Zackfia: Going through to the bottom line I guess I'm curious on kind of what amount of impact.

Sharon Zackfia: In fact, there is from maybe.

Sharon Zackfia: You know people staying longer I mean does it.

Sharon Zackfia: We're saying for a lesser amount of time, because the power cards are not quite there I mean, what is the or is there any potential offset that youre seeing with the game price increases.

Christopher D. Morris: The Bulletproof Executive 2013 Yeah, no, again, a very good question. And exactly the right question.

None: Yeah, No again very good question and exactly the right question.

None: So keep in mind, I've said that we've gone through the testing and learning process and one of the things that we wanted to make sure we understood exactly what you just outlined is.

Christopher D. Morris: So keep in mind, I said that we'd gone through the testing and learning process, and one of the things that we wanted to make sure we understood was exactly what you just outlined. We didn't want to have a negative impact on the value proposition, and we didn't want to just kind of trade the right pocket for the left pocket and grow price on the front end, but then you reduce your overall spend by reducing dwell time. And so we've been closely evaluating that and tweaking it to get to the right balance. And so what we are implementing, or what we implemented, and we rolled it out in February of 2024, was the results of all that testing. And so we didn't get it right at the beginning, and so we made some adjustments, and, you know, we changed pricing to make sure that we were, you know, protecting the value proposition.

None: We didn't want to have a negative impact on value proposition and we didn't want to just kind of trade right pocket for a left pocket.

None: And grow a price on the front end, but then you reduce your overall spend by reducing dwell time and so we've.

None: We've been closely evaluating that and tweaking it to get to the right balance.

None: And so what what we are implementing what we implemented we rolled out in February.

2024 was.

None: The results of all of that testing.

None: And so we didn't get it right at the beginning and so we made some adjustments.

None: And we changed pricing so to make sure that we were.

None: Protecting the value proposition, we move stores into your added here, we did all of that and so now.

Christopher D. Morris: We moved stores in and out of tiers. We did all of that, and so now, you know, we're moving forward with confidence that we've got the right formula. And so what we've rolled out, we're not seeing a material deterioration in dwell time, and we're not seeing any impact on value property. But I will tell you, we're going to continue to closely monitor this. And if we need to make changes, we'll make changes. And so that's the benefit of where we are now, we're in a much better position to be nimble and to adapt, to the extent that the consumer starts to go in a different direction.

None: We're moving forward with confidence that we've got the right formula.

None: So what what we've rolled out we're not seeing.

None: A material deterioration in dwell time.

None: And we're not seeing any impact on value proposition.

None: But I'll tell you we're going to continue to closely monitor with us.

None: And if we need to make changes we will make changes and so that's the benefit of where we are now is we're in a much better position to be nimble and to adapt.

To the extent that the consumer starts to go a different direction.

Dennis Geiger: The next question is from Dennis Geiger with UBS. Please go ahead. Great, thanks guys. Wondering if you could just speak a little bit more to that, maybe the choppiness comment for the first quarter, you're recognizing you're appropriately focused on the longer term strategic opportunities. But just maybe as it relates to anything you're seeing from a customer standpoint, whether it's across visits, other spending patterns, income, or age cohorts, anything to kind of call out there. And again, recognizing there has been some choppiness across the industry.

None: The next question is from Dennis Geiger with UBS. Please go ahead.

Dennis Geiger: Great. Thanks, guys I'm wondering if you could just speak a little bit more to that maybe choppiness comment for the first quarter. Recognizing you are appropriately focused on the longer term strategic opportunities.

But just maybe as it relates to anything youre seeing from from a customer standpoint, whether its across visits other other spending patterns.

Dennis Geiger: Income or age cohorts or anything to kind of call out there and again recognizing there has been choppiness across the industry in recent months, but is there anything that you could share on the customer behaviors et cetera.

Dennis Geiger: in recent months. But is there anything that you could share on customer behaviors, etc., you know, in recent months, any kind of shift, etc., on that front? Would you like to take that cue? Yeah.

Dennis Geiger: In recent months any kind of shifting et cetera on that front.

None: You want to take that Q, yes, I guess I would say it this way.

Michael A. Quartieri: Yeah, I guess I would say it this way: the choppiness we've seen is really from a visitation perspective, but once people are in the door, they're still spending at the same level they've always spent. The dwell times are just the same as they were before, so it's really more the visitation aspect of it than it is anything else. So that's the piece that we're feeling really good about, and that's where we start seeing the improvement in food and beverage, the spend, and things to that effect that have got us really excited about the long-term potential of the actions that were taken from an organic growth perspective.

Q: The Choppiness, we've seen is really from a visitation perspective, but once people are in the door theyre still spending at the same levels they've always been there.

Q: The dwell times are just the same as they were before so its really more of that visitation aspect of it than it is anything else.

Q: So that's the piece that we're feeling really good about and that's where we start seeing the improvement in the food and beverage spend and thanks to that effect that got us really excited about the long term potential of the actions that were taken from an organic growth perspective.

Christopher D. Morris: We've seen, you know, maybe just to add in just a little bit more color as we've continued to dig in and look at our business, we've seen, you know, a couple of things. We've seen a little bit of weakness on the lower income consumer, but at the same time, we've seen strength on the higher end consumer. And everybody in between is kind of acting in their normal fashion. And so those two are somewhat offsetting each other, but it is something that we've been able to kind of tease out of the data. And we're using that data to inform how we're approaching the business and to inform promotions and things of that nature.

Q: We've seen you know maybe just to add just a little bit more color as we've continue to dig in and look at our business we've seen.

Q: A couple of things, we've seen a little bit of weakness on the lower income consumer but at the same time, we've seen strength on the higher end consumer and everybody in between is kind of acting in a normal fashion.

Q: So that's those two are somewhat offsetting each other but it is something that we've been able to kind of tease out of the data and we're using that that data to inform how we are approaching the business and inform promotions and things of that nature.

Christopher D. Morris: This concludes our question and answer session. I would like to turn the conference back over to Chris Morris for any closing remarks.

Q: This concludes our question and answer session I would like to turn the conference back over to Chris Morris for any closing remarks.

Christopher D. Morris: Okay, all right, thank you, operator. We are entering 2024 from a position of financial strength, and we expect this year to be transformative on our journey to unlock the potential of this phenomenal business. Thank you all for joining us. We look forward to welcoming you at one of our stores this year and speaking with you again soon. Thank you.

Christopher D. Morris: Okay. All right. Thank you operator, we are entering 2024 from a position of financial strength and we expect this year to be a transformative on our journey to unlock the potential of this phenomenal business. Thank you all for joining we look forward to welcome you at one of our stores this year and speaking with you again soon thank you.

None: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

None: [music].

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