Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q2 2019 Earnings Conference Call Transcript

Sep 10, 2019 • 05:00 pm ET

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Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q2 2019 Earnings Conference Call Transcript

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Presentation
Executive
Brian A. Jenkins

growing category as consumers continue to increase spending on experiences. As a leading brand that delivers immersive experiences, we are in a great position to capitalize on this favorable secular trend. At the same time, this trend and our success have attracted many more players in the space, and the overall market today is quite fragmented and competitive. Over the past 18 months, we've made important progress on several fronts, including enhancements to our food and beverage offerings and the introduction of more immersive games, including our industry-leading VR platform.

As part of our focus on operational excellence, we've also improved our service as reflected in our consistently higher guest satisfaction scores. While we've accomplished a lot, we see great opportunities for continued improvement and recognize we have a lot more to do. As I have mentioned on previous calls, we see immense opportunity to drive traffic by increasing guests' frequency and improving F&B attachment once guests are in the door. With an annual frequency of less than two times and F&B attach rate of approximately 50%, driving deeper guest engagement to improve these metrics is our biggest opportunity to reignite same-store sales growth.

In the near term, our goal is to execute on five priorities that we have identified to maximize shareholder value. First, the revitalization of our existing stores which in the near term includes re-energizing the dining area and many of our stores to drive food and beverage attachment. It also includes continued food, beverage and amusement innovation to augment our offering, all of which is a part of introducing new wow experiences.

Second, we are focused on building deeper guest engagement, which includes the nationwide launch of our new mobile app in October. It also includes increasing investment in digital media to more effectively reach our guests. Third, we are fueling growth investments by surgically reducing costs in other areas. Through the realization of operational efficiencies both in our stores and corporate office, we expect to fund our growth initiatives organically by redirecting resources into our P&L.

Third -- fourth, we are enhancing rigor on capital and resource allocation to invest in the highest returning opportunities for the overall D&B system. This includes optimizing store formats to match market sales potential and managing the pace of new store growth to maximize returns and sufficiently focus our development team and store level managers on advancing our store of revitalization efforts. And fifth, returning significant capital to shareholders in the form of share repurchases and dividends. I went through those pretty quickly. So let me spend some time on each of these five priorities, particularly the first. Our number one priority is store revitalization to reignite comparable store sales growth.

Our focus on this initiative begins this quarter with our Wow Walls to re-energize our dining rooms. For those of you who have been to our Dallas store, you know you've been testing this idea since late last year, a cutting-edge digital display technology using a nearly 50-foot