Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q4 2017 Earnings Conference Call - Final Transcript

Apr 03, 2018 • 05:00 pm ET


Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q4 2017 Earnings Conference Call - Final Transcript


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Good afternoon, everyone. Welcome to the Dave & Buster's Entertainment Incorporated Fourth-Quarter 2017 Earnings Results Conference Call. Today's call is being hosted by Steve King, Chief Executive Officer. I'd like to remind everyone that this call is being recorded and will be available for replay beginning later today.

Now I would like to turn the conference call over to Jay Tobin, Senior Vice President and General Counsel, for opening remarks. Please go ahead.

Jay Tobin

Thank you, Ashley, and thank you all for joining us. On the call today are Steve King, Chief Executive Officer; and Brian Jenkins, Chief Financial Officer. After comments from each of 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.

Before we begin our discussion of the Company's results, I'd like to call your attention to the fact that in our remarks and our responses to your questions, certain items may be discussed which are not based entirely on historical facts. Any such items should be considered forward-looking statements and relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995.

All such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Information on the various risk factors and uncertainties has been published in our filings with the SEC, which are available on our website at www.daveandbusters.com under the Investor Relations section.

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 and year-end conference call. Today, I'll begin by providing an overview of the fourth-quarter and full-year performance and update you on our key strategic priorities. Brian will delve into the financials and provide updated 2018 guidance. And then, finally, I'll conclude by sharing an update on our development efforts before we open it up to your questions.

Looking at the full-year results, we grew revenue and EBITDA by low double digits, while keeping EBITDA margins relatively flat year-over-year. But unfortunately, after several years of significant same-store sales growth, we reported comps down about 1% for fiscal 2017. The fourth quarter proved to be a challenging sales environment for us, with comps declining by 5.9%. We did not anticipate the abrupt drop in momentum in the latter part of the quarter as we finished the fiscal year.

To put this surprise in a bit of context, October, the last month of Q3, had modestly positive overall comparable-store sales. The most dramatic change in the trend was the slowdown in