Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q3 2017 Earnings Conference Call - Final Transcript

Dec 05, 2017 • 05:00 pm ET


Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q3 2017 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Dave & Buster's Incorporated Third Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jay Tobin, SVP and General Counsel. Please go ahead, sir.

Jay Tobin

Thank you, Melissa, and thank you all for joining us. On the call today are Steve King, CEO; and Brian Jenkins, CFO. 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 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.

Steve King

Thank you, Jay, and good afternoon, everyone. We appreciate your participation in our quarterly conference call.

Today, I'll review our third quarter performance, highlight our key strategic priorities and update you on our new store pipeline and significant whitespace opportunity. Brian will walk you through the key financial highlights and I'll conclude by updating you on our development efforts before we open it up to your questions.

I'd like to begin by sharing a few high-level thoughts of our four strategic priorities before I dive into the quarter itself.

First on Amusement. The category continues to be the primary reason for the business, and it's growing, but we remain focused on continually strengthening our content portfolio and differentiating it from our competition. Our 2018 games lineup is shaping up to be the best yet, and I'll talk about that a little more later. Second, we're committed to reigniting the momentum in our F&B segment by improving product alignment and speed of service. Third, we're taking steps to remove friction and the guest experience. And fourth, bolstered by strong new store returns, we want to continue to drive unit growth over the long-term.

Now for a few highlights from the quarter. While the third quarter had its challenges, including weather and difficult comparisons, our teams pulled through remarkably well, and I'm incredibly proud and grateful for all their hard work. We grew revenue by approximately 9% and EBITDA by about 10%, excluding the estimated impact of Hurricanes Harvey and Irma on the mainland and Maria on Puerto Rico, where we had the stores scheduled to open during the quarter, revenue would have been up double digits.

Q3 comps were down 1.3%, which includes an estimated 50 basis points from the impact of the storm. Our stores in the Huston and Florida markets remained closed for the several days following the hurricanes. In addition, our stores in other parts of Texas experienced temporary softness as consumers were distracted by gas shortages.

You may recall during