Q1 2025 Dave & Buster's Entertainment Inc Earnings Call
Unknown Executive: You're listening to Dave & Buster's Live! Good afternoon, and welcome to the Dave & Buster's First Quarter 2025 Earnings Conference Call.
You were listening to Dave and Busters life.
Speaker Change: Good afternoon, and welcome to the Dave <unk> Buster's first quarter 'twenty 25 earnings conference call.
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Unknown Executive: After today's presentation, there will be an opportunity to ask questions.
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Cory Hatton: I would now like to turn the conference over to Cory Hatton, Head of Entertainment, Finance, Investor Relations, and Treasurer. Please go ahead.
Speaker Change: I would now like to turn the conference over to Cory Hatton head of Entertainment Finance Investor Relations and Treasurer. Please go ahead.
Cory Hatton: Thank you, operator, and welcome to everyone on the line. Joining me on today's call are Kevin Sheehan, our board chair and interim CEO, and Darin Harper, our CFO. After our prepared remarks, we will be happy to take your questions.
Cory Hatton: Thank you operator, and welcome to everyone on the line.
Speaker Change: Joining me on today's call are Kevin Sheehan, Our board chair and interim CEO and Darin Harper our CFO.
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 & Buster's Entertainment Incorporated and is copyrighted. Before we begin the discussion on our company's first quarter 2025 results, I'd like to call your attention to the fact that in our prepared remarks and responses to questions, certain items may be discussed, which are not entirely based on historical facts. 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.
Speaker Change: This call is being recorded on behalf of Dave <unk> Buster's Entertainment incorporated and is copyrighted.
Speaker Change: Before we begin the discussion on our company's first quarter 2025 results I'd like to call your attention to the fact that in our prepared remarks and responses to questions certain items may be discussed which are not entirely based on historical fact.
Speaker Change: 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 1095.
All such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.
Cory Hatton: Information on these risks and uncertainties have been published in our filings with the SEC, which are available on our website. In addition, our remarks today will include references to financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP measure contained in our earnings released this afternoon.
Speaker Change: Information on these risks and uncertainties have been published in our filings with the SEC, which are available on our website.
Speaker Change: In addition, our remarks today will include references to financial measures that are not defined under generally accepted accounting principles.
Speaker Change: Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP measure contained in our earnings release. This afternoon.
Kevin Sheehan: And with that, let me turn the call over to Kevin. Thanks, Cory. Good afternoon, everyone. And thank you for joining our call today. I'm pleased to report that we are making good progress, and our operating results significantly improved over the course of the first quarter.
Katherine: And with that let me turn the call over to Katherine.
Katherine: Thanks Corey.
Katherine: Afternoon, everyone and thank you for joining our call today I'm pleased to report that we are making good progress and our operating results significantly improved over the course of the first quarter well performance in the quarter was nowhere close to where we want and expect to be our back to base.
Kevin Sheehan: While performance in the quarter was nowhere close to where we want and expect to be, our back-to-basics strategy is working and is driving a material recovery in our top-line trajectory. In the quarter, we unwound many clear mistakes and made high confidence changes to marketing, menu, operations, remodels, and games investment. While we are still in the early innings, we are improving our execution every day and have a very clear road map of work to do to continue to drive improvements and meaningful growth in the business. The leadership team and our board are as confident as ever that our current actions will lead to significantly improved revenue, adjusted EBITDA, free cash flow, and shareholder value in the months ahead.
Speaker Change: <unk> strategy is working and is driving a material recovery in our top line trajectory.
Speaker Change: In the quarter, we unwound, many clear mistakes and made high confidence changes to marketing menu operations Remodels engaging games investment well, while we are still in the early innings, we are improving our execution every day and have a.
Speaker Change: Very clear road map of work to do to continue to drive improvements and meaningful growth in the business.
Speaker Change: The leadership team and our board are as confident as ever that our current actions will lead to significantly improved revenue adjusted EBITDA free cash flow and shareholder value in the months ahead.
Kevin Sheehan: As you all know, our financial position remains strong, and we have an excellent business model with high returns on new unit investment, best-in-class store-level economics, disciplined expense management, and significant operating pre-cash flow generation. As we have discussed before, the current leadership team and the full board are laser focused on managing this business to drive both revenue growth and free cash flow generation. Our team continues to be energized by the opportunities we see ahead to meaningfully improve the operating performance of the business and shareholder value. Our results in May were very encouraging, with a particularly robust Memorial Day weekend of solidly positive sales to kick off the summer, and we expect this momentum to continue.
Speaker Change: As you all know our financial position remains strong and we have an excellent business model with high returns on new unit investment.
Speaker Change: Best in class store level economics disciplined expense management and significant operating free cash flow generation.
Speaker Change: As we have discussed before the current leadership team and the full board are laser focused on managing this business to drive both revenue growth and free cash flow generation. Our team continues to be energized by the opportunities. We see ahead to meaningfully improve the operating performance of the <unk>.
Speaker Change: Business and shareholder value.
Speaker Change: Our results in May were very encouraging with a particularly robust memorial day weekend of solidly positive sales to kick off this summer and we expect this momentum to continue.
Kevin Sheehan: Results so far in June continue to show improvement. In fact, we've produced positive same-store sales in 11 of the last 30 days.
Speaker Change: So far our June continue to show improvement in fact, we've produced positive same store sales 11 of the last 30 days.
Kevin Sheehan: Let me take a few minutes to update you on our progress on each of our Back to Basics plans and the changes we are making or plan to make to continue to unwind mistakes and deliver better execution and improve results. On marketing, we have rebalanced our media spend across channels, including getting back on TV, improved our creative, and simplified our messaging. We have successfully reintroduced our historically successful and best-in-class eat-and-play combo, which has had really positive early results. We will continue to refine and sharpen our marketing strategies and lean into our historically most popular and effective promotions.
Speaker Change: Let me take a few minutes to update you on our progress on each of our back to basics plan and the changes we are making or plan to make to continue to unwind mistakes and deliver better execution and improved results.
Speaker Change: On marketing, we have rebalanced, our media spend across channels, including getting back on television.
Speaker Change: Improved our creative and simplified our messaging we've successfully reintroduce our historically successful and best in class eat and play combo, which has had really positive early results.
Speaker Change: We will continue to refine and sharpen our marketing strategies and lean into our historically most popular and effective promotions. We also recently introduced our first ever summer pass, allowing our guests to get unlimited gameplay and great food and beverage discounts each time they come to.
Kevin Sheehan: We also recently introduced our first ever Summer Pass, allowing our guests to get unlimited gameplay and great food and beverage discounts each time they come to visit. Early feedback and results have been very encouraging. On operations We have diagnosed many of the overwhelming factors for our operators that were requiring too many not fully tested or thought out changes to promotions, menu, service style, pricing, labor setup, remodels, all while cutting back on training and failing to properly engage with the store team. We've significantly scaled back, returned to our proven practices, and have continued to spend significant time listening to our operators and their insights.
Speaker Change: Visit early feedback and results have been very encouraging.
Speaker Change: Operations.
Speaker Change: We are diagnosed many of the overwhelming factors for our operators that were acquiring to many not fully tested or daughter out changes to promotions menu service style pricing labor setup remodels, all while cutting back on training and failing to prop.
Speaker Change: Properly engage with the store team, we have significantly scaled back return to our proven practices and have continued to spend significant time listening to our operators and their insights to that end. We are actively rolling out a robust store manager incentive plan.
Kevin Sheehan: To that end, we are actively rolling out a robust store manager incentive plan driven by same-store sales growth that has positively shocked the system in a very morale-boosting way by allowing our managers to become the true owners of their business. On the F&B front, our classic Eat & Play combo is a huge fan favorite and continues to perform very well with a double-digit opt-in rate, given our strong promotion of this incredible value. The Eat & Play combo allows our guests to sample our menu offerings and try out new games, which keeps them coming back for more.
Speaker Change: Driven by same store sales growth that has positively shocked the system.
Speaker Change: Morale boosting way by allowing our managers to become the true owners of their business.
Speaker Change: On the F&B front, our classic eat and play combo is a huge fan favorite and continues to perform very well with a double digit opt in rate given our strong promotion of this incredible value.
Speaker Change: He can play combo allows our guests to sample our menu offerings and try out new games, which keeps them coming back for more we have also corrected many pricing issues and enhanced the menu layout and are hard at work on the introduction of a new menu, bringing back our previously top selling entries, which.
Kevin Sheehan: We have also corrected many pricing issues and enhanced the menu layout, and are hard at work on the introduction of a new menu bringing back our previously top-selling entries, which we think will continue to drive checks. This menu will be rolled out later this year after extensive testing. I should note, our food and beverage sales have markedly improved since April. On remodels, we are approaching the completion of 48 remodels and are continuing to see relative outperformance of these units versus the system. In particular, remodeled stores in the aggregate have outperformed the system by over 700 basis points over the last three months.
Speaker Change: We think we'll continue to drive check.
Speaker Change: This menu will be rolled out later this year after extensive testing I should note our food and beverage sales have markedly improved since April.
Speaker Change: On Remodels, we are approaching the completion of 48, Remodels and are continuing to see relative outperformance of these units versus the system.
Speaker Change: In particular, our remodeled stores in the aggregate.
Speaker Change: Performed the system by over 700 basis points over the last three months.
Kevin Sheehan: As we've discussed, we launched remodels without proper prototype testing, operator input, store prioritization, local marketing, or budget control. We remain confident in the remodel strategy and are actively refining the prototype with operator input, reprioritizing stores, and tightened budget oversight. We continue to have a significant runway of opportunity to remodel and upgrade our system and are supremely confident that with proper execution and oversight, we will generate highly attractive ROIs and lead to meaningful increases in sales and cash flow.
Speaker Change: As we've discussed we launched Remodels without proper prototype testing operator input store prior to this Asian local marketing or budget control. We remain confident in the remodel strategy and are actively refining the prototype with operator input re prioritizing.
Speaker Change: Stores and tightened budget oversight. We continue have continued to have a significant.
Speaker Change: Runway of opportunity to remodel and upgrade our system and our supremely confident that with proper execution and oversight, we would generate highly attractive rois and lead to meaningful increases in sales and cash flow.
Kevin Sheehan: On games investment, we are racing to the summer with our Summer of Games that will be bigger and better than ever with a leaderboard competition across all of our Dave & Buster's stores, inviting guests to complete all summer-long challenges with five new and existing racing-themed games, Hot Wheels, NASCAR Pit Stop, Top Gun Maverick, Cruisin', and Super Bikes, for a chance to win a grand prize, giveaway sweepstakes, and other monthly prizes. In addition, we will also have more brand-new titles like Super Punk and Pac-Man Roller for the summer to further enhance the spring fallout of new games and solidify our spot as America's Top Arcade.
Speaker Change: <unk> investment we are racing to this summer with a summer of games that will be bigger and better than ever with a leader board competition across all of our Dave and Busters stores inviting guests to complete all summer long challenged with five new and existing racing team.
Speaker Change: Games Hot wheels, NASCAR pit stop top gun Maverick cruises and Super bikes for a chance to win a Grand Prize giveaway suites sweepstakes and other monthly prices. In addition, we will also have more brand new titles like Super punk and Pac man rollout.
Speaker Change: For the summer to further enhance the spring fall out of new games and solidify our spot as America's top arcade. Additionally.
Kevin Sheehan: Additionally, we have the Human Crane rolled out in 100 D&B stores, which is driving trial and excitement by being centrally located in the Midway, with an incremental big opportunity to continue to introduce this experience to additional stores, including our main event stores.
Speaker Change: Additionally, we have the human crane rolled out in 100, D&B stores, which is driving trial and excited by being centrally located in the mid way with an incremental big opportunity to continue to introduce this experience to additional stores, including our main than stores.
Kevin Sheehan: New store development continues to deliver strong returns and remains a key part of our strategy. In the first quarter, we opened two new Dave & Buster's stores in Killeen, Texas and Lansing, Michigan. And already in the second quarter, we have opened two DMV locations in Freehold, New Jersey and Wilmington, North Carolina. We also successfully relocated our Honolulu, Hawaii Dave & Buster's to the Premier Ala Moana Mall and while it cost us two weeks of missed sales in the quarter, I'm proud to report that the new location is performing phenomenally with the highest weekly sales ever recorded in the company's long history with week one sales exceeding $1 million.
Speaker Change: New store development continues to deliver strong returns and remains a key part of our strategy in the first quarter. We opened two new Dave <unk> Busters stores in Killeen, Texas in Lansing, Michigan and already in the second quarter. We have opened two D&B locations and freehold, New Jersey and Wilmington North.
Speaker Change: Carolina, We also successfully relocated our Honolulu, Hawaii, Dave <unk> Buster's to the pre meal Premier Ala Moana mall in well cost is two weeks of missed sales in the quarter I am proud to report that the new location is performing phenomenally with the highest.
Speaker Change: Weekly sales ever recorded in the company's long history with week, one sales exceeding $1 million with the opening of the first international franchise location in India. In December we expect at least seven more international openings over the next year.
Kevin Sheehan: With the opening of the first international franchise location in India in December, we expect at least seven more international openings over the next year. As of today, we have secured agreements for over 35 additional stores in the coming years. We see international franchising as a really nice driver of highly efficient incremental growth, monetizing our brands around the world with minimal investment and risk.
Speaker Change: As of today, we have secured agreements for over 35 additional stores in the coming years, we see international franchising as a really nice driver of hiring highly efficient incremental growth monetizing our brands around the world with minimal investment and risk with.
Kevin Sheehan: With regards to our ongoing CEO search, the Board of Directors is finalizing their work to identify the permanent CEO. I remain 100% committed to continue to work closely with the Board and continue to operate the business and make the right decisions to drive performance above and beyond the improvements we've seen in the last few months.
Speaker Change: Regards to our ongoing CEO search the board of directors is finalizing their work to identify the permanent CEO I remain 100% committed to continue to work closely with the board and continue to operate the business and make the right decisions to drive performance above and beyond the improvements we've seen in the <unk>.
Speaker Change: Last few months, we will update you further when we have definitive news to report, which is all we will be saying about this topic on today's call given the sensitivity of ongoing discussions with candidates before I turn the call over to Darren I just wanted to mention to you and importantly, our team.
Kevin Sheehan: We will update you further when we have definitive news to report, which is all we will be saying about this topic on today's call, given the sensitivity of ongoing discussions with candidates. Before I turn the call over to Darin, I just wanted to mention to you, and importantly, our team, both in the field and in the Support Center. We are one team, and we are fully focused and dedicated to not just getting this business on track, but making it even better than ever before. We plan to continue to demonstrate to you, the investment community, the power of these brands and this business model.
Speaker Change: Both in the field and in the support center. We are one team and we are fully focused and dedicated to not just getting this business on track, but making it even better than ever before we can we will we plan to continue to demonstrate to you the investment community the power of these brands.
Speaker Change: And this business model stay tuned as we continue on our journey to deliver the full power of this great company.
Kevin Sheehan: Stay tuned as we continue on our journey to deliver the full power of this great company.
Darin Harper: Now to you, Darin, to walk us through the financial results of the first quarter. Thank you, Kevin. And good afternoon, everyone. Turning to a more detailed review of our financials in our first quarter of fiscal 2025, comp store sales decreased 8.3% versus the prior year period. As Kevin mentioned, the first quarter was way down by a very soft February with comps down 11.9%. However, March saw an initial improvement with comps down 8.4%, followed by April with comps down 4.3% to exit the quarter. Furthermore, through the first five weeks of the second quarter, we are seeing further sequential improvement with COPS down 2.2%.
Speaker Change: Yeah, Darrin to walk us through the financial results of the first quarter.
Darrin: Thank you, Kevin and good afternoon, everyone turning to a more detailed review of our financials and our first quarter of fiscal 2025 comp store sales decreased eight 3% versus the prior year period.
Darrin: As Kevin mentioned in the first quarter was weighed down by a very soft February with comps down 11, 9%.
Darrin: However March saw an initial improvement with comps down eight 4% followed by April with comps down four 3% to exit the quarter.
Darrin: Furthermore, through the first five weeks of the second quarter, we are seeing further sequential improvement with comps down two 2%.
Darin Harper: We believe the sequential improvement reflects the impact of the various initiatives we've been focused on this year, and there remains a lot of work ahead. During the quarter, we generated revenue of $568 million, net income of $22 million, or $0.62 per diluted share, adjusted net income of $27 million, or $76 million. $0.76 per diluted share and adjusted EBITDA of $136 million resulting in an adjusted EBITDA margin of 24%.
Darrin: We believe the sequential improvement reflects the impact of the various initiatives. We've been focused on this year and there remains a lot of work ahead.
Darrin: During the quarter, we generated revenue of 568 million net income of $22 million or <unk> 62 per diluted share adjusted net income of $27 million or <unk> 76.
Darrin: 76 per diluted share and adjusted EBITDA of $136 million, resulting in an adjusted EBITDA margin of 24%.
Darin Harper: As a reminder, reconciliations of all non-GAAP financial measures can be found in today's press release. Quick call out on the attribution of our adjusted EBITDA decline in the quarter versus the prior year period. With the cadence of our new store openings in late Q1 and early Q2, including our Hawaii relocation, we incurred a $2.7 million increase in pre-opening expenses versus the prior year. We generated $96 million in operating cash flow during the first quarter, ending the quarter with $12 million in cash and $411 million of availability under our $650 million revolving credit facility, met a $14 million in outstanding letters of credit.
Darrin: As a reminder, reconciliations of all non-GAAP financial measures can be found in today's press release.
Darrin: Quick callout on the attribution of our adjusted EBITDA decline in the quarter versus the prior year period with the cadence of our new store openings in late Q1, and early Q2, including our Hawaii relocation.
Darrin: We incurred a $2 7 million increase in preopening expenses versus the prior year.
Darrin: We generated $96 million in operating cash flow during the first quarter, ending the quarter with $12 million in cash and $411 million of available of availability under our $650 million revolving credit facility.
Darrin: Net of $14 million outstanding letters of credit.
Darin Harper: We ended the quarter with a total net total leverage ratio of 3.1 times as defined under our credit agreement. In the first quarter, we invested a total of $115 million in capital additions on a gross basis, or $110 million on a net basis when factoring in payments from landlords. As we mentioned to you before, we are focused on converting our significant operating cash flow to free cash flow through more strict management and capital spend, eliminating ineffective and inefficient spend. We are committed to demonstrating our ability to generate free cash flow while continuing to invest in double-digit new store growth, new gains, other high ROI initiatives, and a more diligent pre-model program.
Darrin: We ended the quarter with a total net total leverage ratio of three one times as defined under our credit agreement.
Darrin: In the first quarter, we invested a total of $115 million in capital additions on a gross basis or $110 million on a net basis when factoring in payments from landlords.
Darrin: As we mentioned to you before we are focused on converting our significant operating cash flow to free cash flow through more strict management and capital spend eliminating ineffective and inefficient spend we are committed to demonstrating our ability to generate free cash flow, while continuing to invest in double digit new <unk>.
Darrin: Store growth new gains other high ROI initiatives at a more diligent remodel program.
Darin Harper: We iterate our previously provided expectations for certain key cash flow items that are readily in our control in fiscal 2025, which ends on February 3rd, 2026. We continue to expect total capital expenditures to not exceed $220 million. This includes spend on net new store capital, remodels and other initiatives, games capital, and maintenance capital. We further expect pre-opening expense of approximately $20 million and interest expense within the range of $130 million to $140 million for fiscal 2025. We are firmly committed to our high ROI and historically successful new store strategy with the opening of two new Dave & Buster's in the first quarter, one in Killeen, Texas, and the other in Lansing, Michigan, both opening in the final weeks of the first quarter, and one store relocation in Honolulu, Hawaii.
Darrin: We reiterate our previously.
Darrin: Provided expectations for certain key cash flow items that are readily in our control in fiscal 2025, which ends on February three 2026.
Darrin: We continue to expect total capital expenditures to not exceed $220 million. This includes spend on net new store capital Remodels and other initiatives games capital and maintenance capital.
Darrin: We further expect preopening expense of approximately $20 million and interest expense within the range of $130 million to $140 million for fiscal 2025.
Darrin: We are firmly committed to our high ROI and historically successful new store strategy with the opening of two new Dave <unk> Busters, and the first quarter, one in Killeen, Texas and the other in Lansing, Michigan, both opening in the final weeks of the first quarter and.
Darrin: And one store relocation in Honolulu, Hawaii.
Darin Harper: As Kevin mentioned, quarter to date, we have opened two additional Dave & Buster's stores in Freehold, New Jersey and Wilmington, North Carolina. And we continue to expect a total of 10 to 12 new store openings in fiscal 2025. In relation to our new store growth strategy and expectations for net new store capital in fiscal 2025, we have nine owned real estate assets today at varying stages of development, ranging from open and operating stores to recently acquired land for future stores at attractive sites. We are in active discussions with potential partners to monetize this real estate to more efficiently fund our store development and more efficiently manage our cash flow.
Darrin: As Kevin mentioned quarter to date, we have opened two additional Dave and Busters stores at Freehold, New Jersey in Wilmington, North Carolina and.
Darrin: And we continue to expect a total of 10 to 12, new store openings in fiscal 2025.
Darrin: In relation to our new store growth strategy and expectations for net new store capital in fiscal 2025, we have nine owned real estate assets today at varying stages of development ranging from open and operating stores. Two recently acquired land for future stores at at attractive sites.
Darrin: We are in active discussions with potential partners to monetize this real estate to more efficiently fund our store development and more efficiently manage our cash flows.
Unknown Executive: And with that, operator, please open the line for questions. 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 keys. To withdraw your... Press Star then 2. Please limit yourselves to one question and one follow-up. If you have additional questions, you may rejoin the queue.
Darrin: And with that operator, please open the line for questions.
Darrin: We will now begin the question and answer session.
Darrin: To ask a question you May press Star then one on your telephone keypad.
Darrin: If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Darrin: Please limit yourself to one question and one follow up if you have additional questions you may rejoin the queue.
Andy Barish: Our first question today comes from Andy Barish with Jeffreys. Please go ahead. Hey guys, good afternoon. I'm just wondering if, um, you know, at this stage, you're able to kind of You know, have some degree of predictability in terms of the trajectory of the same store sales in the business, maybe, you know, kind of how you're looking at it on a multi-year stack basis or anything like that, that, you know, may be helpful, you know, for us to try to, you know, project the rest of the year and, you know, what's been kind of a difficult or moving target.
Speaker Change: Our first question today comes from Andy Barish with Jefferies. Please go ahead.
Darrin: Hey, guys good afternoon.
Darrin: Just wondering if.
Darrin: At this stage are ample debt kind of.
Darrin: You don't have some degree of predictability in terms of that.
Darrin: The trajectory of the same store sales in the business maybe.
Darrin: How youre looking at it on a multi year.
Darrin: Stacked basis or anything like that that may be helpful.
Darrin: For us to try that.
Darrin: Project and the rest of the year.
Darrin: Kind of a.
Darrin: Difficult Theyre moving target.
Kevin Sheehan: I think you just got to be a little fair as we're coming out of where we've been in the last couple of years.
Darrin: And I think you just got to be a little fair as we're coming out of where we've been in the last couple of years as we see it we've got a load of opportunity here to drive topline sales.
Kevin Sheehan: As we see it, we've got a load of opportunity here to drive top-line sales, and you've heard me use the analogy many times in sports where, you know, in the second or third inning or in the beginning of the second quarter of a basketball game, we've got a long way to go. So getting the business fixed and to the right cadence is job one, and that's going to look like some outsized growth as we go through the next couple of years. But over the long term, you know, what I've communicated to our team is this is a business should grow, you know, in the 3% kind of same-store sales with another percent or so on new stores.
Darrin: And.
Darrin: Heard me use the analogy many times in sportswear in the second or third inning or the beginning of the second quarter of a basketball game. We've got a long way to go so getting to getting the business fixed into the right.
Darrin: <unk> is job one and that is going to look like some outsized growth as we go through the next couple of years, but over the long term.
Darrin: I've communicated our team as this is a business should grow.
Darrin: Yes.
Darrin: 3% kind of same store sales with another percent or so on new stores and then it behooves us to get another percent on incremental opportunities by getting into the expansion of the international.
Kevin Sheehan: And then it beholds us to get another percent on incremental opportunities by getting into, you know, the expansion of the international, selling apparel that we're starting to sell on the website, having a catering operation that we're starting now as well. So lots of little side things that we could do. And then you take that growth in the revenues and then you discipline that with lean management and best-in-class cost controls to drive a much higher conversion to EBITDA. And then you manage your cash effectively, as Darin was talking about, very smartly. We need to first prove to you guys that there's a powerful amount of cash generation in this business, and we will do that this year.
Darrin: Selling apparel that were starting to sell on the web side, having a catering operation that we're starting now as well so there's lots of little side things that we can do and then you take that growth in the revenues and then you discipline that.
Darrin: With lean management and best in class cost controls to drive a much higher conversion to EBITDA and then you manage your cash effectively as Darren was talking about very smartly, we need to first prove to you guys that there is a powerful amount of cash generation in this business and we will do that this year.
Kevin Sheehan: And then you guys will start to see that we're taking that cash flow and intellectually managing it to drive shareholder value.
Darrin: A year and then you guys will start to see that we're taking that cash flow and intellectually managing it to drive shareholder value. We're in this for one purpose and is to drive this share price to heighten its never seen and should have been all along.
Kevin Sheehan: We're in this for one purpose, and it's to drive this share price to heights it's never seen and should have been all along.
Speaker Change: Okay. Thank you Kevin and then.
Darin Harper: Okay, thank you, Kevin. And then, um, hey, Darren, it looks like, you know, CapEx is very front end loaded this year, you know, half of your annual CapEx here in the first quarter you did, I think most of the remodels that are going to happen this year. Can you just kind of give us a sense of what that you know, sort of last batch look like or how much you spent, I imagine there was some You know, spending up front already for arenas and social bays and just, you know, just trying to, you know, kind of get a breakdown of what that CapEx looks like.
Darrin: Hey, Darrin it looks like.
Speaker Change: Capex is very front end loaded this year you know half of your.
Darrin: Annual Capex here in the first quarter you did.
Darrin: Most of the Remodels that are going to happen. This year can you just kind.
Darrin: Kind of give us a sense of what that.
Darrin: Sort of last batch look like or how much you spent I imagine there was some.
Darrin: Spending up Ron already for arena and social base.
Darrin: Just trying to.
Darrin: Kind of get a breakdown of what that Capex looks like.
Darin Harper: Without having read the cue yet, I guess that looks like it's out. Yeah, that's right, Andy. Yeah, very front-end loaded, as you mentioned, and that was right in line with expectations because we had a lot of new stores coming online within Q4 and Q1, number one. Yeah, we were sort of on the tail end of some more significant spending on the remodel side. And then we had a fair amount of capital with respect to games that supported our spring break of games and heading into the summer of games. But yeah, of the 115 gross spends, 53 of that was related to new stores, about $20 million for remodels and other initiatives, $30 million on games, and about $12.5 million on maintenance capex.
Darrin: Without having read the Q, yet I guess, that's a that looks like it's out.
Speaker Change: Yes, yes, that's right Andy Yes, very very front end loaded as as you mentioned that that was right in line with expectations, because we had a lot of new stores coming online within Q4 and Q1 number one yes, we were.
Speaker Change: Sort of on the tail end of some more significant spending on the remodel side and then we had a fair amount of capital with respect to two gains.
Speaker Change: That that supported our spring break of gains and heading into summer of games.
Darrin: But yes the 115.
Darrin: Gross.
Darrin: Spans 53 of that was related to new stores about $20 million for four remodels and other initiatives $30 million on games.
Darrin: And in about $12 5 million on maintenance Capex.
Darin Harper: So, look, we remain confident, obviously we reiterated our full year guidance, and Feel like that continues to be a good number for us to support everything that we need to do, obviously inherent in that is, is our ongoing sale lease back transactions with with key partners that we feel very, very good about. And, and, and that's, that's how we continue to see the balance of the year.
Darrin: So look we remain confident obviously reiterated our full year guidance.
Darrin: And.
Darrin: Sure.
Darrin: Feel like that continues to be a good number for us to support everything that we need to do obviously inherent in that is our ongoing.
Darrin: Sale leaseback transactions with key partners that we feel very very good about and.
Darrin: And that's how we continue to see the balance of the year.
Jeff Farmer: The next question is from Jeff Farmer with Gordon Haskett. Please go ahead. Great. Thanks, too, for you guys.
Speaker Change: The next question is from Jeff Farmer with Gordon Haskett. Please go ahead.
Jeff Farmer: Great. Thanks to you for you guys just drilling down on the improved same store sales trend.
Jeff Farmer: Just drilling down on the improved Sameshare sales trend, can you share anything in terms of what that's looked like across things like day parts, week parts, young adults, families, geographies, anything that sort of paints a little bit broader picture in terms of what you guys are seeing on the improved trend? Yeah. Yeah, I'll take that. Yeah, so we're really encouraged from where we're seeing the improvement. Number one, it's, you know, predominantly driven by, you know, improvement in traffic. And we're seeing that benefit, you know, entertainment and F&B both. You know, furthermore, we're seeing some nice check growth on the F&B side.
Jeff Farmer: Can you share anything in terms of what that's looked like across things like day parts weak parts young adults families geographies anything that sort of paints a little bit broader picture in terms of what you guys are seeing on the improved trend.
Darrin: Yeah.
Darrin: Yeah, I'll take that yes. So we're really encouraged from from where we're seeing the approval number one it's predominantly driven by.
Darrin: Movement in traffic.
Darrin: And we're seeing that benefit entertainment add F&B both.
Darrin: Furthermore, we are seeing some nice check growth.
Darrin: On the F&B side, and that's not that's not through taking price, but it's through higher attach.
Darin Harper: And that's not through taking price, but it's through higher attach coming from our eat and play combo that we've been promoting. And as Kevin has said, we've seen, you know, double digit opt-in for that, which is great. We are discounting less, and our operators are hyper-focused on our peak hours right now. And in driving better F&B growth through speed of service, through server suggested, et cetera. You know, furthermore, what we're really encouraged with is the strength that we're seeing on our weekends. Really, throughout this calendar year, our weekend growth has far outpaced our weekday. And we're really encouraged by that, because that's really focused on us driving a lot of this awareness through our media strategy, through our messaging, through our offer.
Darrin: Coming from our eat and play combo that that we've been promoting and as Kevin has said we've seen double digit.
Darrin: Opt in for that which is great.
Darrin: Our discounting less.
Darrin: And at our operators are hyper focused on our peak hours right now.
Darrin: And driving better F&B growth through speed of service or server suggest it et cetera.
Darrin: Furthermore, what we're really encouraged with is is.
Darrin: The strength that we're seeing on our weekends.
Darrin: Really throughout this calendar year.
Darrin: Our weekend growth.
Darrin: <unk> has far outpaced our weekday.
Darrin: And we're really encouraged.
Darrin: By that because thats really focused on us driving a lot of this awareness through media strategy through our messaging through our offer and it's driving people in.
Kevin Sheehan: And it's driving people in at these, you know, key peak times. We are seeing in the credit card data it does appear as if some of the higher income is trading better and you know a bit of a trade down that that we think we're being beneficiaries of but then that middle consumer is performing really well also so just a bit of color there that that hopefully you know give you a little bit of perspective on where we're seeing this this improvement Your point is spot on because this is an area of importance to me as we look to regain some of our revenue in the late night day parts and we're testing things with lunches and we're trying to push business into these underutilized time periods of the week and that is going to remain a focus but of course as Darin pointed out, getting it right in the important peak periods is also extremely important but we feel we have a good opportunity to push the time periods that we're busy further and further out.
Darrin: At at least.
Darrin: Key peak peak times.
Darrin: We are seeing.
Darrin: In the credit card data.
Darrin: It does appear as if some of that higher income.
Darrin: As trading better.
Darrin: Okay.
Darrin: A bit of a trade down that that we think will be the beneficiaries of but then that middle consumer is performing really well.
Darrin: Also.
Darrin: So just a bit of color there that hopefully.
Darrin: I'll give you that.
Darrin: A little bit of perspective on where we're seeing this this improvement.
Darrin: Got it.
Darrin: So I don't know if that means just yes, just your point is spot on because this is an area of imports.
Darrin: Important to me as we look to regain some of our revenue in the late night day parts and we're testing things with lunches.
Darrin: We're trying to push business into these underutilized time periods of the week and that is going to remain a focus but of course as Darren pointed out.
Darren: Getting it right in the important peak periods is also extremely important but we feel we have a good opportunity to push the.
Darrin: The <unk>.
Darrin: Time periods that we're busy further and further out.
Kevin Sheehan: And then just one quick follow up. Kevin, you mentioned the, I think it's a new store manager incentive program. So can you just sort of level set us in terms of where you were and what it looks like now? Yeah, I mean, I think we we now have, in my opinion, and somebody could prove me wrong, the best in class GM program, where we have a very competitive salary, we've got a strong bonus profile, if we hit the right metrics. And we now have a long term incentive that will lock our people in and it will attract the best in breed of potential new general managers, whereas it works on a rolling three year basis.
Kevin Sheehan: And then just one quick follow up Kevin you mentioned the.
Speaker Change: It's a new store manager.
Speaker Change: Incentive program. So can you just sort of level set SMB.
Speaker Change: Where are you worried what it looks like now.
Speaker Change: Yeah.
Speaker Change: We now have in my opinion, and then somebody can prove me wrong a best in class GM program, where we have a very competitive salary. We've got a strong bonus profile. If we hit the right metrics and we now have a long term incentive that will lock our people and it will attract the best in breed.
Speaker Change: Potential new general managers, where it works on a.
Speaker Change: A rolling three year basis. So every year you are rewarded based on your same store sales and it all starts with positive same store sales and the higher you get the better your pay off and then that amount is accrued for.
Kevin Sheehan: So every year you you are rewarded based on your same store sales, and it all starts with positive, same store sales, and the higher you get, the better your payoff. And then that amount is accrued for the and it's going to be paid over three years, the first pay payment, the first year is paid right away. And then the second and third roll into year two, and then year three. And then in year two, you get the same sort of thing and you accrue an amount for year two, and then you get a payment for one third of it that year.
Speaker Change: It is.
Speaker Change: Going to be paid over three years, the first pay payment. The first year's paid right away and then the second and third roll into year, two and then year three and then in year. Two you get the same sort of thing and you accrued amount for year, two and then you get a payment for one third of it that year and then you get into the second and third from the first year.
Kevin Sheehan: And then you get a second third from the first year. And then you push the second year's program into years three and four. So I don't know if I said it clearly, but over a three year period, you're accruing on a three year basis where you could start to get some meaningful payouts. If you do the one thing that we care about immensely, and that is to drive same store sales, get out of the general, you know, out of the store, get into the community, talk to the leaders of all the corporations, talk about why it's a great place to have a corporate event.
Speaker Change: And then you push the second years program into years, three and four so I don't know if I said, it clearly but over a three year period, you're accruing on a three year basis, where you could start to get some meaningful payout. If you do the one thing that we care about immensely and that is to drive same store.
Speaker Change: Our sales it out as a general.
Speaker Change: Out of the store get into the community talk to.
Speaker Change: Leaders of all the corporations talk about why the great place to have a corporate event.
Kevin Sheehan: If you're in the main event side, talk about bowling leagues and civic associations.
Speaker Change: If you are in the main event, so I talked about bowling leagues and civic associations. So we just think it's going to drive the behavior of the general managers of start to think more like a <unk>.
Kevin Sheehan: So we just think it's going to drive the behavior of the general manager to start to think more like a CEO of a business as opposed to, you know, I think I said in the last call, table stakes of coming in and making sure the lights are on and the team is there for the day and we've got the right food order and all the games are working.
Speaker Change: <unk> of our business as opposed to.
Speaker Change: I think I said on last call as table Stakes are coming in and making sure. The lights are on the team is there for the day and we've got the right food order in.
Speaker Change: And all of the games are working we now need to level set the business to a much higher level.
Kevin Sheehan: We now need to level set the business to a much higher level.
Andrew Strelzik: The next question is from Andrew Strelzik with BMO. Please go ahead. Hey, thanks for taking the questions.
Speaker Change: The next question is from Andrew <unk> with BMO. Please go ahead.
Andrew: Hey, thanks for taking the questions.
Andrew Strelzik: My first one on the improvement in the in the comp trends, are you able to identify or unpack which of the initiatives that you've implemented, have really been the biggest contributors that you saw kind of a step function, whether it's the marketing side or the upside. And then when you talk about having a very clear roadmap, moving forward over the next three or six months, what are some of the biggest opportunities that you think still remain? Yeah, so with respect to the sales question, I think where we're very encouraged is through our improvement in the traffic side.
Andrew: My first one on the improvement in the comp.
Andrew: Comp trends are you able to identify or unpack, which of the initiatives that you've implemented.
Speaker Change: I have really been the biggest contributors that you saw kind of a step function, whether it's the marketing side of the upside and then when you talked about having a very clear roadmap moving forward over the next three to six months what are some of the biggest opportunities that you think still remain.
Speaker Change: Yeah, so with respect to the <unk> question.
Speaker Change: I think where we're we're very encouraged is through.
Speaker Change: R R.
Speaker Change: Improvement in the traffic side.
Darin Harper: And that's supported by brand tracker work that we have where our guests are telling us they are more aware, the promotions that we're on media with right now are top of mind. The message, new games is driving them to make a visit and it's impacted their perception, etc. So we're seeing a lot of. consumer stats that are matching up well with that improvement in the traffic trend number one. And then a lot of the things that we've also promoted, again, with the Eat & Play combo, really plussing that up, you know, going back to what's really worked well with us on that front.
Speaker Change: And that's supported by brand tracker or a work that we have where our guests are telling us.
Speaker Change: Okay.
Speaker Change: A.
Speaker Change: They are more aware.
Speaker Change: On the.
Speaker Change: Promotions that were.
Speaker Change: On media with right now are top of mind.
Speaker Change: The message new games.
Speaker Change: Is driving them.
Speaker Change: To make a visit and it's impacted their perception et cetera. So we're seeing a lot of.
Speaker Change: The consumer.
Speaker Change: Stats that are matching up well with that improvement in the traffic trend number one.
Speaker Change: And then a lot of the things that we've we've also promoted again with with Eaton play combo really pushing that up going back to what has really worked well with us.
Speaker Change: On that front again, just seen really good attachment on that which is driving food shack.
Darin Harper: Again, just seeing really good attachment on that, which is driving food check, and we're really pleased with that. So it's a number of things like that that we feel we have really good confidence that, you know, while we're still in very, very early innings with this, we feel like we're getting the right momentum with it.
Speaker Change: And we're really pleased with that so so it's a number of things like that that we feel we have.
Speaker Change: Really good confidence that.
Speaker Change: While we're still in very very early innings with this we feel like we're getting we're getting the right.
Speaker Change: The right momentum with it and then.
Darin Harper: And then, you know, in terms of, you know, where we continue to have opportunity, again, just going back to, you know, we are in the early innings, you know, we'd say second to third inning on the developments of these strategies. And we believe that there's more that we can do from a marketing standpoint, just even better optimizing our spend. getting the right messaging, continuing to improve on the mix. On the game side, there's further work that we can really do to tap into what our guests are telling us, what they really want. And I think the pivot from where some of the entertainment on the store in the future was, that's the way we want to go.
Speaker Change: In terms of where we continue to have opportunity again, just going back to we are we are in the early innings.
Speaker Change: I would say second second to third inning on on the development of these strategies.
Speaker Change: We believe that there is more that we can do from a marketing standpoint.
Speaker Change: Just even better optimizing our spend.
Speaker Change: Getting them getting the right messaging and continuing to improve on the mix.
Speaker Change: On the gain side. There's further work that we can really do to tap into.
Speaker Change: And what our guests are telling us what they really want.
Speaker Change: I think that the pivot from <unk>.
Speaker Change: From where some of the entertainment on the store of the future was set to wherever they want to go there's big opportunity. There. There is continued opportunity to improve.
Darin Harper: There's big opportunity there. There's continued opportunity to improve operations. And so those are all areas that we've now well-positioned the train on the tracks with, that we can just continue to get momentum as we go through the year.
Speaker Change: Operations.
Speaker Change: And so those are all areas that we are now well positioned that the train on the tracks with that we can just continue to get momentum as we go through the year.
Speaker Change: Okay.
Kevin Sheehan: Okay, and maybe my follow up, you know, over the last couple years, there were a lot of costs that were either optimized or taken out of the business. Is there any sense as you do this work, that you might need to reinvest in the business to kind of drive that long term performance or any areas? feel like you need to lean in from an investment perspective.
Speaker Change: Okay and maybe.
Speaker Change: My follow up.
Kevin Sheehan: Over the last couple of years, there were a lot of costs that were either optimized or taken out of the business is there any sense. As you do this work that you might need to reinvest in the business to kind of drive that long term performance or any areas, specifically, where you feel like you need to.
Speaker Change: Lean in from an investment perspective.
Kevin Sheehan: I mean, I don't think anything stands out as being, you know, larger than life, you know, we, we are going to benefit now from spending our money smarter, as was alluded to earlier, all the money that was spent on arenas and all that stuff is now going to be spent on initiatives that we test and make sure our guests love and then we'll roll it out and it'll be much more efficient than, you know, some of the stuff that was done in the past. So I don't see that and I think once we get the top line going the way it needs to go and which we should start to see hopefully, you know, a better place in the second quarter and a much better place in the third quarter, that, you know, the same sort of sales cures a lot of the sins and then we get back to building the business and then we never have to, we should forget, you know, Darin and my background of, you know, lean management and wanting to make sure we're best in class, we're executing, you know, Tony who runs the operations is always focused on the labor side of it and making sure we keep that top of mind and, but provide a great guest experience for our guests when they come so that they come back and return and make sure the experience is right and that's all the stuff that we're working on with the remodels and everything to bring the traffic back.
Speaker Change: I mean, I don't think anything that stands out as being.
Speaker Change: Launching in life.
Speaker Change: We are going to benefit now from spending our money smarter.
Speaker Change: As was alluded to earlier all the money that was spent on arenas in OLED stuff is now going to be spent on initiatives that we have test and make sure. Our guests love and then we will roll it out and it'll be much more efficient than some of the stuff that was done in the past so I don't see that and I think what.
Speaker Change: We get the top line going the way it needs to go in which we should start to see hopefully a better.
Speaker Change: Better place in the second quarter in a much better place in the third quarter.
Speaker Change: <unk> store sales cures a lot of sense and then we get back to building the business and then we never have.
Speaker Change: Should forget.
Speaker Change: Darren and my background of lean management and he wanted to make sure. We're best in class, we're executing Tony who runs the operations has always focused on the on the labor side of it and making sure we keep that.
Speaker Change: The mind and provide a great guest experience for our guests when they come so that they come back in and returned it to make sure. The experience is right and and that's all the stuff that we're working on with the Remodels with everything to bring the traffic back we were silent for so long when you think about the fact that Darren talked about getting back into the marketing we were.
Kevin Sheehan: We were silent for so long when you think about the fact that Darin talked about getting back in the marketing, we were marketing to digital people that, you know, weren't getting the reach and frequency that we're learning how to get right now and the marketing still has a long way to go but we're moving in the right direction. I'm excited because, you know, every time we go through a new marketing initiative, we find out we got to a certain percentage of what we thought we could get to which leaves so much room for us to build in the future.
Speaker Change: We were marketing to digital people that.
Speaker Change: We werent getting the reach and frequency that we.
Speaker Change: We're learning how to get right now and the market still has a long way to go but we're moving in the right direction I'm excited because.
Speaker Change: Every time, we go through through New marketing initiative, we find out we got to a certain percentage of what we thought we could get to which leaves so much room for us to build in the future. So lots of opportunity lots of excitement and I think the costs will make sense out of that as we go forward as long as we get the same store sales which were all.
Kevin Sheehan: So lots of opportunity, lots of excitement and I think the cost will make sense out of that as we go forward as long as we get the same sort of sales which we're all very confident with.
Speaker Change: Very confident with.
Todd Brooks: The next question is from Todd Brooks with The Benchmark Company. Please go ahead. Hey, thanks for taking my questions. Two from me as well. First, on the gaming floor and the newness that's been flowed in over the course of this year, where do we stand for number of new cabinets after whatever's been flowed in for summer games? And then what's the outlook exiting the year? And there was kind of an earlier discussion that there were a couple of years where we didn't touch the game floor.
Todd Brooks: The next question is from Todd Brooks with the Benchmark company. Please go ahead.
Todd Brooks: Hey, Thanks for taking my questions two from me as well first on the gaming floor and the newness that's been flowed in over the course of this year, where do we stand for number of new cabinets. After whatever has been flowed in four.
Todd Brooks: Summer games, and then what's the outlook exiting the year and there was kind of our earlier discussion that there were a couple of years, where we didn't touch the gaming floor. So can we walk through the cadence of how you get the game floor back to the right balance of newness over the next.
Darin Harper: So can we walk through the cadence of how you get the game floor back to the right balance and newness? The Six Quarters. Yeah, I can start with that. So total number of new cabinets that is being rolled out is eight, as well as two new attractions on top of that, the attractions being Human Crane and Cotton Candy. So if you include those two, you're looking at about 10 per location, which is fairly consistent with, you know, where the brand had been pre-COVID. So we feel good about that. And again, it's, you know, games that have, you know, high appeal with our guests.
Todd Brooks: Six quarters here.
Todd Brooks: Yes, I can.
Todd Brooks: I can start with that so.
Todd Brooks: Total number of new cabinets.
Todd Brooks: That is being rolled out his eighth as.
Todd Brooks: As well as two new attractions on top of that the attractions being human Crane and cotton candy. So if you include those two you're looking at about 10 per.
Speaker Change: <unk> per location.
Speaker Change: Rich.
Speaker Change: It's fairly consistent with.
Speaker Change: Where the brand had been pre COVID-19. So we.
Speaker Change: We feel good about that and again it's.
Speaker Change: Games.
Speaker Change: <unk> that have high appeal with our guest.
Darin Harper: Good IP, we have exclusivity with the new Hot Wheels game, which has given us the ability to do a nice partnership with Mattel. We've got a sweepstakes associated with that to where the consumer, with a new leaderboard concept that we rolled out, can win a new car. And so that's creating a lot of buzz, and we're getting some really good impressions with that. So that gives you some perspective of what we've rolled out here.
Speaker Change: Good good IP, we have exclusivity with the new hotspot or wheel game, which has given us the ability to do a nice partnership with with Mattel and we've got a sweepstakes associated with that to wear.
Speaker Change: The consumer with a new either board concept that we rolled out can can win.
Speaker Change: A new car and so thats, creating a lot of it a lot of buzz and we're getting some really really good impressions with that.
Speaker Change: So that gives you some perspective of.
Speaker Change: What what we've rolled out here.
Darin Harper: You know, look, in terms of where we go from here... I think there was a lot of learning that we had with the remodel program on making sure that we focus on the right entertainment experience that fits well with the guest occasion, that kind of fits within the power car ecosystem, and that's where we've really driven a lot of the demand is that that's what guests are familiar with, that that's the type of experience that they want. And, you know, we are currently and actively working with our partners on finding the right types of attractions that aren't just ubiquitous attractions, but forms of entertainment that fit well with our guests, fit well with the occasion, but also address the need states from our guests of wanting to, you know, gamify their experience more and interact more with those that are in their group.
Speaker Change: <unk>.
Speaker Change: In terms of where we go from here.
Speaker Change: I think I think there's a lot of learnings that we had with our remodel program on making sure that we focus on the right entertainment experience that fits well with the guest occasion that kind of fits within that.
Speaker Change: With a power card ecosystem, and that's where we've really driven.
Speaker Change: A lot of the demand is that's what guests are familiar with that that's the.
Speaker Change: Type of experience that they want.
Speaker Change: And we are currently.
Speaker Change: And actively.
Speaker Change: Working with our partners on finding the right types of attractions that that arent, just ubiquitous attractions, but forms of entertainment that fit well with our guests at all of the occasion.
Speaker Change: But also address the.
Speaker Change: Need states from our guests are wanting to.
Speaker Change: Gamify their experience more and interact more with with those that are in there and theyre groups. So there is a number of things that we're working on that were.
Darin Harper: So there's a number of things that we're working on that we're excited about that we'll look forward to sharing in the months ahead.
Speaker Change: We're excited about that we'll look forward to sharing in the months ahead.
Darren: Okay, great. Thanks, Darren and then if we're just looking at the.
Unknown Executive: Great.
Darin Harper: Thanks, Darin. And then if we're just looking at the same store sales result for the quarter. I know there's a lot of moving pieces, and you said you were encouraged by the fact that it was predominantly traffic-driven, the recent momentum.
Speaker Change: The same store sales result for the quarter.
Speaker Change: I know, there's a lot of moving pieces and you said you were encouraged by the fact that it was predominantly.
Speaker Change: Traffic driven the recent momentum, but can you give us any color looking back to Q1 kind of a traffic check type of split to understand any sort of pricing changes that were made that might have impacted average track or just any sort of nuances that.
Darin Harper: But can you give us any color looking back to Q1 of kind of a traffic-check type of split to understand any sort of pricing changes that were made that might have impacted average check or just any sort of nuances that could add some more color to the same-store sales Yeah, sure. You know, we historically do not provide any specific details on on traffic versus check. But, you know, I say, when you look at the per nominate impacts on that sales trend, you know, most of that is is coming from traffic. You know, going back, there was no discrete pricing that we took during the quarter.
Speaker Change: Add some more color to the same store sales result that was reported.
Speaker Change: Yes sure.
Speaker Change: We historically do not.
Speaker Change: Provide any specific details on traffic versus check.
Speaker Change: But.
Speaker Change: I would say when you look at the predominate.
Speaker Change: Impacts on that sales trend.
Speaker Change: Most of that is coming from traffic.
Speaker Change: Going back there was no discrete pricing.
Speaker Change: That we took during the quarter.
Darin Harper: We did moderate some of the discounting, or perhaps said differently, we did not get as aggressive with discounting as the brand did last year. So, for instance, you know, we're rolling over 50% off food from the prior year. And obviously, we're now leaning into our Summer of Games campaign, rather than 50% off food. That's going to be accretive to our F&B check. And so that's a portion of the story, but the majority is driven by just an improvement in traffic.
Speaker Change: We did moderate.
Speaker Change: Some of the discounting or perhaps said differently, we did not.
Speaker Change: <unk> has aggressive with discounting as the branded.
Speaker Change: Last year.
Speaker Change: So for instance, we're rolling over 50% off food from the prior year.
Speaker Change: And.
Speaker Change: And obviously, we're now leaning into our our summer of games campaign, rather than 50% off food.
Speaker Change: That's going to be accretive to our F&B check.
Speaker Change: And so thats a portion of the story, but the majority is driven by just an improvement in traffic.
Dennis Geiger: The next question is from Dennis Geiger with UBS, please go ahead. Great. Thanks, guys. I wanted to first ask, from here, a lot of compelling initiatives to improve the trajectory. Just as we think about some of the ongoing challenges, you know, Kevin, maybe framing up, you know, how you think about the sort of macro as a headwind right now versus some of those brand-specific, you know, or self-inflected issues that you're clearly improving, but that maybe, you know, just take a little bit of time to work through. Is it more the latter than, you know, sort of the macro that we're in, in your view, as far as, you know, some of the lingering pressure that's still out there as you work through the fixes?
Dennis Geiger: The next question is from Dennis Geiger with UBS. Please go ahead.
Dennis Geiger: Great. Thanks, guys I wanted to first ask from here a lot of compelling initiatives to improve the trajectory.
Speaker Change: Just as we think about some of the ongoing challenges Kevin maybe framing up how you think about the sort of macro headwinds right now versus some of those brands specific were self inflicted issues that you are clearly improving but that maybe you could just take a little bit of time to work through it or is it more of the latter than sort of the macro that.
Speaker Change: We are in your view as far as.
Speaker Change: Some of the lingering pressure that's still out Youre out there as you work through the fixes.
Kevin Sheehan: I think the work on the fixes is going to take us through a good portion of the year as we roll through this quarter. We're still benefiting from that, and we will continue to, and we're starting to make new initiatives that are driving value. And I think what happens for us, because we've got so much power going behind the business right now, that you lose the impact of the economic landscape. We're aware of it, but because there's just so many things that we're working on that we feel pretty confident with, that we'll ride through this period and hopefully come out the other side a much stronger company and doing, I would say, better than most in the industry because of the effort we're doing to make up for the past.
Speaker Change: I think the work on the fixes its going to take us through a good portion of the year as we roll through this quarter was still.
Speaker Change: Benefiting from that and we will continue to and we're starting to make it.
Speaker Change: New initiatives that are driving value and I think what happened for us because we've got so much power going behind the business right now that you lose the impact of the economic landscape. We are aware of it but because there's just so many things that we're working on that we feel pretty confident with that.
Speaker Change: <unk>.
Speaker Change: All right through this period and hopefully come out the other side as a much stronger company and doing.
Speaker Change: I'd say better than most in the industry because of that.
Speaker Change: Effort, we're doing to make up for the past I don't know if I answered that well.
Kevin Sheehan: I don't know if I answered that well, but that makes that makes good sense. And maybe just on that, as you talk about getting through and getting to the other side, you gave some some comments on the call, I think with respect to, you know, at a high level, right, as an algorithm, maybe long term, I think you spoke to about 3% same store sales, maybe longer term on the other side of this. And I probably heard it wrong, but maybe another percent or so on, on new stores, can you and some other things to drive revenue growth you touched on?
Speaker Change: That makes.
Speaker Change: That makes good sense and maybe just on that as you talk about getting through and getting to the other side. You gave some some comments on the call I think with respect to at a high level right now.
Speaker Change: Algorithm, maybe long term I think you spoke to about 3% same store sales maybe longer term on the other side of this and I probably heard it wrong, but maybe another percent or so on on new stores can you and then some other things to drive revenue growth you touched on can you.
Kevin Sheehan: Can you correct me on the new store comment that you made and, and what that that new store looks like longer term, if you were directly speaking to that?
Speaker Change: Correct me on the on the new store comment that you made.
Speaker Change: And what that that new store it looks like longer term. If you were directly speaking to that.
Speaker Change: Okay.
Kevin Sheehan: Yeah, I mean, at the end of the day, this is a Kevin thing with my team. And I believe in, you know, we should be best in class. And if we're, if we're all thinking like owners, like the new general managers program is set out to support, we should be looking to drive same source sales, positive growth, anywhere from three. And as I said, in their programs, they do much better beyond 3%, to be honest. So we're driving the right behavior. So that's going to be the, to me, the base business. And then we have the growth from the new stores.
Speaker Change: Yeah, I mean at the end of the day. This is a Kevin Zhang with my team and I believe in.
Speaker Change: We should be best in class and.
Speaker Change: If we're all thinking like owners like New General managers program as SaaS to support we should be looking to drive same store sales positive growth anywhere from three and as I said in their programs. They do much better beyond 3% to be honest.
Speaker Change: So we're driving the right behavior, so thats going to be the to me the base business and then we have the growth from the new stores and thats going to add onto that and whatever the percentage is something between 1%, 2% I suspect as we get bigger and bigger and then it is.
Kevin Sheehan: And that's going to add on to that and whatever the percentage is something, you know, between 1% and 2%, I suspect as we get bigger and bigger. And then it is, you know, incumbent on us as a management team, to be thoughtful about how do we, how do we deepen our relationship? And how do we extend our business proposition based on the value of the Dave & Buster's and the main event brands? And so that that I'm thinking about that encompassing international and, and some of the other things that we're, we haven't announced that we're pushing to drive to extend, you know, our revenue opportunity.
Speaker Change: Incumbent on us as a management team to be thoughtful of that how do we how do we deepen our relationship and how do we extend our business proposition based on the value of the Dave <unk> Busters and the main event brands and so that that I'm thinking about that encompassing.
Speaker Change: International and <unk> and some of the other things that.
Speaker Change: We haven't announced that we're pushing to drive to extend our revenue opportunity. So it's an ongoing thing that I've used in many other companies along the way and just getting people rallied around the metrics that makes sense and are important to me and the leadership and the board kind of helps people understanding.
Kevin Sheehan: So it's a, it's an ongoing thing that I've used in many other companies along the way. And just getting people rallied around the metrics that make sense and are important to me and, and the leadership and the board kind of helps people understanding. And, you know, when I was saying to the guy before we, you know, with the number of shares that we have outstanding, I'm blistering on everybody's forehead 350,000 is a penny of earnings per share or whatever the number is. And, you know, when you put it into that terms, all of a sudden people can understand, holy crow, I can make a difference.
Speaker Change: I was saying to the guys before.
Speaker Change: Number of shares that we have outstanding.
Speaker Change: Listening on everybody's forehead 350000, as penny of earnings per share or whatever the number is and when you put it into that terms all of a sudden people can understand Holy Crow I can make a difference and that's what we're going to hold them to everybody's got to start thinking like owners of the business.
Kevin Sheehan: And that's what we're going to hold them to. Everybody's got to start thinking like owners of the business.
Brian Mullan: The next question is from Brian Mullan with Piper Sandler, please go ahead. Thanks. Just a question on the game side. On the last play you referenced, I think the value proposition...
Speaker Change: The next question is from Brian Mullan with Piper Sandler. Please go ahead.
Brian Mullan: Hey, Thanks, just a question on the game side on the last call you referenced I think the value proposition for the consumer perhaps testing some things that could extend the time of play.
Speaker Change: You just talk about those tests and anything you've learned so far what you're measuring and looking to see and how you'd expect that to progress.
Darin Harper: Transcripts provided by Transcription Outsourcing, LLC. Yeah, yeah, absolutely. So, a couple things that we're doing there. One, as we think about this eat and play combo, one of the things that we added to it this year for the first time in the brand is an all-you-can-play option. And that is, of all of our eat and play combos, we've got, you know, 30% of folks are upgrading to that all-you-can-play option. And so, it's very clear in our consumer research and feedback that we're getting is, hey, guests like the ability to know, hey, I can spend this much and have, you know, a known quantity of time of which to play.
Speaker Change: Yeah, Yeah, absolutely. So a couple of things that we're doing there one.
Speaker Change: As we think about this eat and play kind of a one of the things that we added to it.
Speaker Change: This year for the first time in the brand as an all you can play option.
Speaker Change: And that is of all of our eat and play combos, We've got <unk>.
Speaker Change: 30% of folks are upgrading to that all you can play.
Speaker Change: Option and so it's very clear in our consumer research and feedback that we're getting is had guests like the ability to now.
Speaker Change: Can spend as much in half.
Speaker Change: A.
Speaker Change: A known quantity of time of which.
Darin Harper: So, that's one aspect. But probably the bigger thing that we are in a couple of phases of testing is on our kiosk, and that's testing a more simplified rate card structure for our guests. I think we all agree that last year we kind of made it a little bit too confusing for the guests. So we're trying to simplify it and bring back the right flow for the guests in terms of initial pricing and supercharges, etc. But along with that is testing, bringing our game pricing down to extend the amount of time that they're in the midway.
Speaker Change: Play.
Speaker Change: That's one aspect.
Speaker Change: But probably the bigger thing that we are in a couple of phases of testing is.
Speaker Change: As on our kiosk.
Speaker Change: And Thats testing.
Speaker Change: A more simplified rate card structure for our guest.
Speaker Change: I think I think we all agree that last year, we kind of made it a little a little bit too confusing for the guests. So we're trying to simplify it.
Speaker Change: And and bring back the right flow for the guest in terms of initial pricing and super charges et cetera.
Speaker Change: But along with that is.
Speaker Change: As testing.
Speaker Change: Bringing our game pricing down to extend the amount of time.
Speaker Change: That there.
Speaker Change: In the midway that that that was something that we believe.
Darin Harper: That was something that we believe we might have overextended a little bit last year. And that's an area where, again, we're focused on getting the same amount, if not more, from our guests, but giving them better value through the right gameplay. And so we're being very strategic with how we price redemption versus non-redemption games to really give them the best experience possible while managing our margins in the right way. So early days in that test, but we're pretty excited about the learnings that we've gotten so far.
Speaker Change: We might have.
Speaker Change: Over extended a little bit last year, and and Thats an area, where again, we're focused on getting the same amount if not more from our guests by giving them better value through.
Speaker Change: Through the right game play and so we're being very strategic with.
Speaker Change: Now, how we price redemption versus non redemption games to really.
Speaker Change: Give them the best experience possible.
Speaker Change: <unk> managing our margins in the right way. So so early days in that fast, but but there is there is that there is we're pretty excited about the learnings that we've gotten so far.
Speaker Change: Okay. Thank you for that and then on the food side on this call you've talked about.
Darin Harper: Okay, thank you for that. And then on the food side, you know, on this call, you've talked about being some average checklist for meat and play, which is great.
Speaker Change: Seeing some average check lifts from Eaton play, which is great I wanted to ask about just separately I think you've talked about making some changes to the menu design or configuration.
Darin Harper: I wanted to ask about just separately, I think you've talked about maybe Transcripts provided by Transcription Outsourcing, LLC. Yes, it's very important, by the way. So what we did when we got in, we thought that the menu didn't present to our guests, the menu that we thought they wanted. So we re-skinned the existing menu, and just highlighted the opportunities for our guests that we think they want, and that's helped out on our ticket. And it's been successful.
Speaker Change: Have you taken any actions on that so far that familiar so.
Speaker Change: Working on it.
Speaker Change: How has the consumer response.
Speaker Change: Yes.
Speaker Change: Very important by the way.
Speaker Change: So what we did when we got it and we thought that the menu didn't present.
Speaker Change: As to our guests.
Speaker Change: The menu that we thought they wanted so we re skinned the existing menu and just highlighted the opportunities for our guests that we think they want and thats helped out on our ticket and.
Speaker Change: It's been successful.
Speaker Change: That was part a we could do that quickly by just re skinning. The menu part two which is the more evolution and we want to do this right and we want to do one time, it's we're bringing back the menu and the opportunities that were the most successful to the Dave <unk> Busters over its long history, and so we're going to showcase those.
Speaker Change: Those entry entrees and beverages and desserts and.
Speaker Change: And shoot the color the picture as well and make sure that.
Speaker Change: Menu is very appetizing and then we're testing it in different versions that go into test in the next couple of weeks and then we're going to learn from that and re test if we need to and rollout of menu towards the fall hopefully in time for when the business picks up in the fall.
Speaker Change: But we wanted to do it at a very measured way. We've included a lot of input at every stage from our operators made sure. They felt part of it we wanted to make sure we understood that we werent, creating more complexity in the tiny in the kitchen. So we're doing a lot of work to make sure. We do this really well and really right. The first.
Speaker Change: One.
Jake Bartlett: The next question is from Jake Bartlett with Truist Securities, please go ahead. Great, thanks for taking the questions. You know, I just wanted to start quickly with a clarification, another, you know, stab at the question, Kevin, that you made about Unigrowth. It's so different to think about 1% to 2% growth versus the 5% to 6% growth that we've seen in the last, or that's guided this year, and we've seen recently.
Speaker Change: The next question is from Jake Bartlett with Securities. Please go ahead.
Jake Bartlett: Great. Thanks for taking the questions.
Jake Bartlett: Wanted to start quickly with a clarification another.
Speaker Change: Stab at the question, Kevin that you made about unit growth.
Speaker Change: So different to think about 1% to 2% growth versus the <unk>.
Speaker Change: 5% to 6% growth that we've seen in the last.
Speaker Change: <unk> guided this year and we've seen recently so is that the message that you guys are really rethinking the the unit growth trajectory of this business.
Darin Harper: So is that the message that you guys are really rethinking the Unigrowth trajectory of this business and focusing, I think that would mean you're focusing more on same-store sales and free cash flow generation, but I just want to make sure, seems like a really, a big change, if that really, you know, kind of is what you're trying to communicate. And I had a couple of follow-ups. Yeah.
Speaker Change: Focusing I think that would mean, you're focusing more on same store sales and free cash flow generation, but I just wanted to make sure. It seems like a really big change if that really kind of is what youre trying to communicate in a couple of things.
Darin Harper: Hey, Jake, Darin. Yeah, I'm glad you asked that question to clear up. Yeah, I think Kevin was kind of providing just sort of a high-level summary view sort of internally, but no, we still plan on, you know, 12, you know, 10 to 14 new units a year for the foreseeable future, which obviously is a much higher percentage. So, no, please don't read into that comment as a change in strategy and capital allocation Great. I really appreciate that.
Jake Bartlett: Yeah, Hey, Hey, Jake there, yes, im glad youre asking that question, Yes, I think I think Kevin was kind of providing just sort of a high level summary view sort of internally, but no we still plan on.
Speaker Change: 12, 10 to 14, new units a year for the foreseeable future, which which obviously has a much higher percentage so.
Speaker Change: No. Please don't read into that comment as as a change in strategy and capital allocation back to their stores.
Mike: Great I really appreciate that and then Mike.
Darin Harper: And, you know, my other, you know, real questions are on what should we expect in the next month or two? I look at kind of the May and the performance is really strong and, you know, impressive to see that improvement. I want to understand better what is happening in June and July, you know, from here. The games that were mentioned, I believe the new ones that came on, you know, have been in place, you know, throughout the last five weeks, so that those are kind of included. I think maybe Summer of Games marketing starts, but just to understand what changes from here, you know, to potentially, I would think, you know, drive maybe an improvement.
Speaker Change: My other.
Speaker Change: We're real questions or.
Speaker Change: What should we expect in the next month or two I look at kind of the main and the performance is really strong and impressive to see that improvement.
Speaker Change: I wanted to understand better what.
Speaker Change: He is happening in June and July from here.
Speaker Change: James that were mentioned I believe the new ones that came on had been in place throughout the last five weeks of the base or can they included.
Speaker Change: I think maybe summer of games marketing starts, but just to understand what changes from here.
Speaker Change: To potentially I would think driver maybe an improvement from here.
Darin Harper: Yeah, so yeah, as you noted, we are our game rollout was sort of phased between spring break and summer. And so that that is, you know, now fully, fully loaded. We're continuing to finish rolling out human crane and activating that in 100 Dave and Buster's. So that that that's a key thing. We've launched our summer pass program as well, about three weeks ago. Early days, you know, we're really encouraged with that, you know, obviously, that the the pass model is something that consumers, you know, have a subset of our consumers have really said that they like.
Speaker Change: Yeah. So yeah as as you noted we are game rollout was sort of phase between spring break.
Speaker Change: And summer and so that that is now fully.
Speaker Change: Fully loaded we're continuing to finish rolling out.
Speaker Change: Human Crane and activating that.
Speaker Change: 100 <unk> Dave.
Speaker Change: Dave <unk> Buster's.
Speaker Change: That's a key thing we've launched our summer pass.
Speaker Change: Program as well.
Speaker Change: Three weeks ago.
Speaker Change: Early days.
Speaker Change: We're really encouraged with that obviously that the past model is something that consumers.
Speaker Change: <unk> have a subset of our consumers that really said that they like.
Darin Harper: So we're pretty pleased with with that initial performance as well. You know, and and we're, we're launching our new leaderboard as well across Dave & Buster's associated with a subset of these new games, you know, particularly our new Hot Wheels game that we're now promoting, again, with this sweepstakes to where you have the ability with your high scores to be in the drawing for this new game. We'll also have, you know, first, second, third place prizes throughout the location as well. Again, really, really strong impression with that campaign right now that we're really excited about.
Speaker Change: So we're pretty pleased with that initial performance as well.
Speaker Change: <unk>.
Speaker Change: And we're launching.
Speaker Change: Our new leader board as well across.
Speaker Change: David Busters associated with subsea.
Speaker Change: Subset of these new games, particularly our new hot wheels game.
Speaker Change: That we are now promoting again with the sweepstakes to wear.
Speaker Change: <unk>.
Speaker Change: You have the ability with your high scores.
Speaker Change: B.
Speaker Change: And the drive for this new game will also have.
Speaker Change: First second third place prizes throughout the location as well.
Speaker Change: Again really really strong impression.
Speaker Change: With that campaign right now.
Speaker Change: That we're really excited about so I think it's continuing to drive that momentum continuing to optimize that media spend.
Darin Harper: So, I think it's continuing to drive that momentum, you know, continuing to optimize that media spend along the way, you know, and now, you know, as we've said, we've rolled out the new incentive model for our field, and we've got the field focused on a hospitality model and a separate, you know, incentive program to really drive food attached during this period of time as well. So, there's a number of different things that we're focused on that are just continuing to drive a lot of what we've implemented, but plus it up, and then that gives us, you know, opportunity to develop, you know, our initiatives for, you know, heading into next year as well.
Speaker Change: Along the way.
Speaker Change: And now as we've said we've rolled out the new incentive model for our.
Speaker Change: Field and we've got the field focused on.
Speaker Change: On the hospitality model.
Speaker Change: And a separate.
Speaker Change: Now.
Speaker Change: Incentive program to really drive food attach during this period of time as well.
Speaker Change: So there is there is a number of different things that that.
Speaker Change: Focus on that or just continuing to drive a lot of what we've implemented but plus it up and then that gives us time.
Speaker Change: To continue to develop.
Speaker Change: Our initiatives for four <unk>.
Speaker Change: That's a next year as well.
Brian Vaccaro: The next question is from Brian Vaccaro with Raymond James, please go ahead. Hi, thanks and good evening. Just two quick ones on margins, if I could.
Brian Vaccaro: The next question is from Brian Vaccaro with Raymond James. Please go ahead.
Brian Vaccaro: Hi, Thanks, and good evening, just two quick ones on margins if I could.
Darin Harper: First, you know, obviously, in the first quarter, there was the salesy leverage in the margins, but can you unpack the other OPEX line a bit more for us? And are you expecting, I think there were some higher ads then, maybe some R&F, but are you expecting those to continue into the second quarter or rest of the year? So part of that increase is some incremental marketing spend that we had in the period as well. So we had about $4.7 million incremental marketing spend to help drive and promote these initiatives. So you do have that. And you've got the, we do have some incremental R&M spend as well.
Speaker Change: Obviously in the first quarter there was the sales deleverage in the margins, but can you unpack the other opex line a bit more for us and are you expecting some higher ASP.
Speaker Change: But are you expecting those to continue into the second quarter or rest of the year.
Speaker Change: So part of part of that increase is some incremental marketing spend that we had in the period as well so we had.
Speaker Change: $4 $7 million incremental marketing spend to help.
Speaker Change: Drive and promote.
Speaker Change: These these initiatives so you do have that.
Speaker Change: And <unk> got.
Speaker Change: The we do have some incremental R&M spend.
Darin Harper: That was anticipated. A lot of that is focused on, you know, on our game room floor to really drive and make sure that with, you know, the introduction of all these new games, you know, we've got the games working. We've got things refreshed the right way. And so there's an element of that in that cost as well. And so I'd say, look, we don't anticipate.
Speaker Change: While that was anticipated.
Speaker Change: A lot of that is focused on.
Speaker Change: Honors.
Speaker Change: Floor.
Speaker Change: To really drive and make sure that with the introduction of all these new games.
Speaker Change: We've got the games working we've got things refreshed the right way.
Speaker Change: And so there is an element of that and that cost as well.
Speaker Change: And so I'd say.
Speaker Change: Look we don't anticipate.
Speaker Change: The cadence of marketing to continue at that pace for the year.
Speaker Change: But some lines with with R&M.
Speaker Change: Our sort of anticipated.
Speaker Change: Little bit more spend.
Speaker Change: This year versus the prior year.
Speaker Change: We feel like that that's the right investment for us to drive to drive our growth and get us to the topline positivity.
Darin Harper: All right, thank you.
Speaker Change: Alright. Thank you and then if I could just follow up on this.
Darin Harper: And then if I could just follow up on just the comps themselves, and the trajectory here, any color on walk-in versus your events business, another big Any color there and then any color differences between Dave & Buster's and Main Event because I think a lot of So any differences? Thanks again. Yeah, sure. Yeah, overall, you know, we've seen from from a special events side, you know, some, some, some good performance there that's that's outpaced our walk in for for for the year. It's up slightly year over year. Overall, you know, I'd say on balance, D&B and Main Event are continuing to perform similarly.
Speaker Change: The comps themselves and the trajectory here any color on walking versus Europe business.
Speaker Change: Yeah.
Speaker Change: New SaaS from team members to lead the special events business. So any color there and then any color or differences between Dave and Busters and made them that I think a lot of information there is a focus on Dave and busters, so any any differences worth noting there. Thanks again.
Speaker Change: Yes sure.
Speaker Change: Yes.
Speaker Change: Overall.
Speaker Change: We've seen.
Speaker Change: From a special event side.
Speaker Change: So.
Speaker Change: Some.
Speaker Change: Good performance there that's that's outpaced our walk in.
Speaker Change: Four.
Speaker Change: For the year.
Speaker Change: It's up slightly.
Speaker Change: Year over year.
Speaker Change: Overall, I would say on balance Dnb main event are continuing to perform similarly.
Darin Harper: You know, but there are elements of areas that we're focusing on D&B that we're seeing some metrics, which again, give us further confidence on the things that we're really focused on are driving the business forward. We are seeing some even greener shoots on aspects of the D&B business. But overall, you know, nothing extraordinarily notable to call out.
Speaker Change: But there are elements of.
Speaker Change: Areas that we're focusing on D&B that that we're seeing some metrics, which again gives us further confidence on the things that we're really focused on are driving the business forward.
Speaker Change: We are seeing some.
Speaker Change: Some even greener shoots on aspects of the D&B business.
Speaker Change: But overall.
Speaker Change: Nothing.
Speaker Change: Extraordinarily notable to call out.
Unknown Executive: This concludes our question and answer session.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Kevin Sheehan for any closing remarks.
Kevin Sheehan: I would like to turn the conference back over to Kevin Sheehan for any closing remarks. Hey, thank you, operator. And thank you all for joining. In closing, our back to basic strategy is working and we are driving a material recovery in our top line trajectory. We are seeing in real time that our compelling product offering and value proposition are driving renewed interest from our loyal guests and new guests this summer. We have a very strong business model with exceptional brand awareness, high guest satisfaction, and affinity. National scale, high returns on new units, best in class unit economics, disciplined cost management, and strong free cash flow.
Speaker Change: Hey, Thank you operator, and thank you all for joining and closing our back to basics strategy is working and we are driving a material recovery in our top line trajectory. We're seeing in real time that are compelling product offering and value proposition are driving renewed interest from.
Speaker Change: Our loyal guests and new guests this summer.
Speaker Change: We have a very strong business model with exceptional brand awareness high guest satisfaction and affinity national scale high returns on new units best in class unit economics disciplined cost management and strong free cash flow our leadership team our operators and our board.
Kevin Sheehan: Our leadership team, our operators, and our board are fully focused on driving revenue growth and free cash flow. We're excited about the opportunities ahead to enhance performance and increase shareholder value.
Speaker Change: <unk> are fully focused on driving revenue growth and free cash flow. We're excited about the opportunities ahead to enhance performance and increase shareholder value. We look forward to speaking with you again soon and have a great evening. Thank you.
Unknown Executive: We look forward to speaking with you again soon and have a great evening.
Unknown Executive: Thank you.
Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.