• Revenue: $535 million for Q4 fiscal 2024.
• Net Income: $9 million or $0.25 per diluted share.
• Adjusted Net Income: $27 million or $0.69 per diluted share.
• Adjusted EBITDA: $127 million with a margin of 23.8%.
• Comparable Store Sales: Decreased 9.4% on a like-for-like calendar basis versus the prior year period.
• Operating Cash Flow: $108.9 million for Q4.
• Cash and Credit Availability: $6.9 million in cash and $503.5 million available under a $650 million revolving credit facility.
• Net Total Leverage Ratio: 2.8 times.
• Share Repurchases: Nearly 3 million shares for approximately $85 million in Q4; total of 5 million shares repurchased in fiscal 2024.
• Sale-Leaseback Proceeds: $111 million from Q4 transactions, totaling $185 million for fiscal 2024.
• Capital Expenditures: $558 million on a gross basis or $357 million net for fiscal 2024.
• New Store Openings: 5 new stores in Q4, totaling 14 new stores in fiscal 2024.
• Franchise Development: First international franchise location opened in India; 35 franchise partnership agreements in place.
• Fiscal 2025 Capital Expenditure Expectation: Not to exceed $220 million.
• Planned New Store Openings for Fiscal 2025: 10 to 12 new stores.

• Warning! GuruFocus has detected 6 Warning Signs with PLAY.

Release Date: April 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dave & Buster's Entertainment Inc (NASDAQ:PLAY) has identified clear opportunities for improvement and is taking actions to address past mistakes.
• The company has reintroduced TV advertising and returned to its historically successful promotional activities, such as the Eat & Play Combo.
• Financial position remains strong with low leverage, no near-term debt maturities, and significant operating free cash flow generation.
• New store development continues to deliver high returns on investment, with 14 new stores added in fiscal 2024 and plans for further expansion.
• The introduction of new games, including the Human Crane and other premium marquee games, is expected to enhance the customer experience and drive revenue growth.

Negative Points

• Comparable store sales decreased by 9.4% in the fourth quarter of fiscal 2024, indicating ongoing challenges in driving traffic and sales.
• Previous leadership's significant changes to marketing, operations, and menu negatively impacted the business, requiring a back-to-basics approach.
• The company is facing a mixed economic environment, with uncertainties impacting consumer behavior and spending.
• Remodel strategy faced challenges due to improper testing and budget overspending, leading to a more measured pace in 2025.
• The competitive landscape remains a concern, with the need to differentiate and improve brand positioning to better compete in the market.

Q & A Highlights

Q: Where have you seen improvements in March and April, and how are you handling economic uncertainties? A: Darin Harper, CFO, noted that March and April showed marked improvements in traffic and ticket sales, particularly in food and beverage. The company is about 55% of the way to where they should be and expects further improvements in the coming months. They are optimistic about overcoming economic uncertainties by focusing on strategic opportunities.

Q: How does the Back to Basics strategy affect the cost structure and remodel cadence? A: Kevin Sheehan, Interim CEO, explained that the Back to Basics strategy involves reallocating marketing dollars back to TV and improving game offerings. The strategy aims to enhance customer experience without significantly changing margins. The remodel cadence will be more measured, focusing on stores that need it and ensuring high ROI.

Q: Is there a value proposition issue for the brand, particularly in pricing? A: Kevin Sheehan and Darin Harper addressed this by stating they are testing new pricing strategies to enhance the guest experience. They are focusing on food attach strategies like the Eat & Play Combo to drive check growth without relying solely on price increases.

Q: How do you view the competitive environment and its impact on recent sales struggles? A: Kevin Sheehan believes the recent sales struggles are more about internal execution rather than competitive pressures. He emphasized that correcting past mistakes and focusing on core strengths will mitigate any competitive challenges.

Q: What are the expectations for CapEx in fiscal 2025, and how does it relate to sale-leasebacks? A: Darin Harper stated that the $220 million net CapEx includes typical tenant improvements and sale-leasebacks. The company is taking a conservative approach, focusing on optimizing capital spending to ensure high ROI.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.