Dave & Buster's Entertainment Q2 Earnings Call Highlights

Dave & Buster’s Entertainment NASDAQ: PLAY reported lower second-quarter revenue and earnings but said same-store sales trends improved during July and the early weeks of its third quarter as the company pursues a “back-to-basics” strategy centered on traffic, value and store execution. Revenue for the second quarter was $544.1 million, down from $557.4 million a year earlier. Company-wide same-store sales declined 2.9%, an improvement from the 5.4% decline reported in the first quarter. Interim CFO Cory Hatton said sales trends improved further in July, when same-store sales were down 1.6%, compared with a 5% decline in June. The company recorded a GAAP net loss of $12.5 million, or $0.36 per diluted share, compared with net income of $11.4 million, or $0.32 per diluted share, in the prior-year period. Adjusted EBITDA declined to $98.9 million, representing an 18.2% margin, from $129.7 million and a 23.3% margin a year earlier. CEO Darin Harper said the company’s food-and-beverage comparable sales rose 7.6% in the second quarter, marking its fifth consecutive quarter of growth in that category. Special-events sales have increased for seven straight quarters, he added. Harper attributed food-and-beverage momentum primarily to a return to what he called a proven menu, improved execution of the company’s Eat & Play Combo and higher food-and-beverage attachment among gaming customers. The company also plans to raise awareness of its food-and-beverage offerings and take what Harper described as strategic, consistent inflationary price increases. Sports viewing remains another area of focus. Harper said more than half of guests identify football, basketball or baseball among the sports they watch, while more than 90% of guests who watch sports at a food or bar venue order food and more than 80% order alcohol. He said the company produced double-digit sales growth during activated World Cup matches, including the tournament final. “We are a perfect occasion for that type of experience,” Harper said of the World Cup activations, which included themed food, reskinned games, prize integration and ticketed events. Harper said the company is maintaining the core of its back-to-basics plan while providing a more detailed framework for execution. The strategy centers on capturing existing demand around personal, seasonal and cultural occa...