Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) Q2 2023 Earnings Call Transcript

Brian Vaccaro: Just wanted to ask about the comps again and just sort of the cadence itself through the quarter. Obviously comps down in the 60s now, and I’m — just want to get your perspective on what you think is driving that sequential softness and just sort of the healthier consumer. I think you mentioned it’s not concentrated in any area, but is there anything you’re seeing day part or weekday versus weekend or F&B versus amusements? Just any incremental context on what you think is driving those that sequential softening?

Chris Morris: Yes, Brian, I will take that and then let to wrap it up. The first thing I’ll say is, I’ll repeat, what I said to Jake earlier is, last year part of what we’re dealing with is just a tough comparison to the prior year, just with the post-COVID surge and our performance last year benefited from that just as our peer group did. And so there is a bit of a tough comparison. And as I said, when we compare ourselves to 2019, first, we’re pleased with the growth from 2019; secondly, there was really no material trend in the business throughout the quarter. It was fairly consistent. As we always do, we’ve analyzed the heck out of our business, slicing and dice it every single way. What I’ll tell you is, there was nothing meaningful that came out of that.

We think that it was just overall relative to [2002], there was just a decline. So there’s not one thing that we could really point to that would suggest that it’s related to a shift in consumer behavior in terms of how they’re trading at Dave & Buster’s or anything along those lines.

Mike Quartieri: I think one thing to add on that, what we are seeing is for the customers that are coming in, they are spending at consistent levels of what we historically have seen in that post-COVID environment. So when you look at our mix between — of revenues between amusement and food and beverage, we’re still kind of holding at that one-third, two-thirds with the two-thirds being on the amusement side.

Brian Vaccaro: And just on the initiatives to optimize your pricing on the games, could you elaborate on the changes that you’re making that will have an impact beginning in the fourth quarter, just some of the specifics there? And any ballpark of how much of a pricing benefit you expect that to yield starting in the fourth quarter? And then also I think you were thinking about and maybe testing, raising the buy-in, the minimum buy-in level, maybe from $15 to $20 if memory serves. Have you made a decision on that front?

Chris Morris: Yes. So I’ll give you the two main takeaways. One, towards the end of the quarter, so there was really no benefit in Q2. We did adjust the rate card, which is the buy-in at the kiosk. When you look at our pricing before, the low end entry point was $15, and then it went from $15 to $25 to $35 to $45. We adjusted those rate cards to actually start with $20. And then it goes from $20 to $30 to $40 to $50. The dollar value per chip that the customer receives is consistent. So it really wasn’t much of a, call it a price change as it was a change in just the buy-in amount at the minimum level, and then it went up through there. The other aspect of what we’re looking to accomplish is, as we’ve talked before, one of the strategic unlocks in pricing is the ability to alter pricing between geographic areas.