Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q1 2017 Earnings Conference Call - Final Transcript

Jun 06, 2017 • 05:00 pm ET


Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q1 2017 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Dave & Buster's Incorporated First Quarter 2017 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Jay Tobin, General Counsel. Please go ahead, sir.

Jay Tobin

Thank you, Noah, and thank you for joining us. On the call today are Steve King, Chief Executive Officer; and Brian Jenkins, Chief Financial Officer. After comments from Mr. King and Mr. Jenkins, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Inc. and is copyrighted.

(Forward-Looking Cautionary Statements)

In addition, our remarks today will include references to EBITDA, adjusted EBITDA and store operating income before depreciation and amortization, which are financial measures that are not defined under Generally Accepted Accounting Principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released this afternoon, which is also available on our website.

Now I'll turn the call over to Steve King.

Stephen King

Thank you, Jay, and good afternoon, everyone. We appreciate your participation in our quarterly conference call and your continued interest in Dave & Buster's.

Today I'll review the quarterly highlights and provide an update on our current initiatives and plans. Brian will walk us through the key financial highlights, our increased 2017 guidance and our new $100 million share repurchase program. Then I will discuss our development and remodeling efforts before we open it up to your questions.

We're off to a great start in fiscal 2017 and are pleased to be raising our annual outlook. Dave & Buster's differentiated experience across our four platforms of Eat, Drink, Play and Watch continues to resonate with our guests.

We grew total revenue by more than 16% and EBITDA by more than 22% during the first quarter of 2017, demonstrating good operating leverage. Once again, we delivered very strong comparable store sales growth of 2.2%, led by Amusement comps of 6.4% during the quarter, in line with our full year guidance.

This was our 20th consecutive quarter of outperformance relative to Knapp-Track. Our non-comp store performance remained strong as well and we're pleased with our 2017 store openings to-date. Of the 96 stores we opened, we operated during the first quarter, 20 stores or 21% of the total were non-comp stores.

Their strong performance and contribution to our overall revenue growth demonstrates the broad appeal of our brand, as we work towards building out our North American store potential of over 200 stores. The first quarter tends to be volatile for us.

This year, once again, we experienced significant week-to-week sales volatility due to many factors, including delays in tax refunds, the shift in Valentine's Day, Easter and spring breaks, as well as the impact of weather. Fortunately, these factors were all within our quarter and we believe, on a combined basis, did not have a material impact on us.

From a regional standpoint, our Texas stores rebounded nicely and delivered