Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) Q3 2022 Earnings Call Transcript

Michael Quartieri: Well, I think I’ve taken to a point, if you’re looking versus 2021, you do have the impact of the delta variant coming to a close kind of the end of October, which November had a nice bump. If you recall during our earnings call a year ago, when we founded it on November, we had comp store sales at Dave & Busters, which was 14-plus percent for that month alone on the walk-in business. So from a 2021 perspective, we are lapping that at this point in time. When you look at the balance of the year in that 2021 period, then Omicron hit and the business fell off dramatically. So we do expect to have a much easier comp for the December, January period as we go forward.

Jake Bartlett: Well, I was talking versus 2019, start of the third quarter at 17.6% and then it was 13.6% for the quarter and now it’s closer to 12% consolidated. So there’s a deceleration versus 2019. Is there — what do you think is driving that?

Michael Quartieri: I would just look at just overall trends in the business. I think from a back-to-school perspective, there are economic issues that are out there, although we don’t see it as much. I mean to talk about comp store sales at the levels that we are versus I think it’s still a remarkable component of this business that shows the strength of the overall business in itself.

Jake Bartlett: Agreed. And just one question on the — as we think about the quarter-to-date and then we think about, I believe the comment was that — or maybe you can confirm that you expect the special events business to be above 2019 levels, so kind of no longer a drag. But should we think of the whole quarter if demand kind of levels remain the same, we would think about the quarters being higher than the quarter-to-date just as you consider the lift that you have, I think, probably some visibility on for the special events. Should we think about the quarter as higher than what the quarter-to-date is just given that dynamic?

Chris Morris: The short answer is yes. I mean if you look at quarter-to-date sales, just adjusting for the holiday mismatch, which as Mike said, we expect that mismatch to recover as we move into December, that alone would tell you that we expect the quarter-to-date number to end up better than the five weeks. But then you factor that into just the strength in the business, the focus on special events, the pacing that we’re on right now to deliver on Special Events, we feel great. We feel great about the business. We feel great about the trends and excited that we’re in a position in the year in a really high note.

Jake Bartlett: Great. Thanks a lot. Appreciate it.

Michael Quartieri: Thank you.

Operator: Your next question will come from Andrew Strelzik with BMO Capital Markets. Please go ahead.

Andrew Strelzik: Hey, good afternoon. Thanks for taking the questions. My first one, I was curious if you think there’s any reason to believe recognizing kind of that the overall momentum of the business is still strong, that there has been a touch of a slowdown. Do you think there’s any reason to believe that you’re seeing any pushback from some of the pricing or some of the pricing adjustments at the game level maybe that you made, do you have kind of any metrics or data points that you’re watching to gauge that?

Chris Morris: Yes. So, we certainly have the metrics to — anytime we raise prices, that’s something that we take very seriously. And so, we’re always going back and doing the postmortem analysis. We’re not seeing — no, we’re not seeing any pushback or negative reaction or change in consumer behavior related to the price increases. So, in fact, we still feel like that there is room in some aspects of our business to continue to raise prices. So nothing there. I guess, I would just point you back to the comments that we’ve been making is that, there’s still — the underlying trends in this business are still very good.

Andrew Strelzik: Sure.

Chris Morris: And so, we still feel good about that.

Andrew Strelzik: Okay, great. And then on the synergies and the integration, what exactly do you have left to do there? And you talked about the $17 million annualized, I believe. How much of the $25 million do you actually expect to realize this year on a reported basis?