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

I don’t see — at this point in time, we’re not seeing anything that would suggest that we need to rethink our strategic priorities. We’re still just as committed as we were June 13th on the areas that we outlined with you. Where we see some momentum in the business is on the food and beverage changes that we’re making. And so the space that we tested and that we’re going to be rolling out in September, we feel great about the results that we’re driving. And that’s a very thoughtful approach to food and beverage. It’s not just recipes, it’s how we deliver on that menu at the store level and drive a great guest experience. That’s something that we’re going to continue to push forward on, the enhanced service model to be able to promote that phenomenal food and beverage offering; and to drive attach, that’s something that we continue to be focused on.

Special events is an area. So all the areas that we outlined at this point in time, we’re still moving forward with the same amount of enthusiasm and the same commitment, but obviously, we’re doing it in a very careful way just to make sure we don’t get ahead of ourselves.

Andrew Strelzik: I just wanted to quickly, as a second question, ask about some of the new stores that you guys have opened and kind of you sounded pretty excited about the return profile and the performance of the new stores in this environment. I’m just curious, kind of any other color that you can share, how those are tracking versus other prior classes, et cetera, would be glasses?

Chris Morris: No, I’ll just say, what we said is, I mean, we’re consistently getting phenomenal returns. This is — we’ve got a great business with great margins and a great business model that delivers very strong cash on cash returns. And we’re pleased with the economics of our most recent new store openings. And so — but we’re going to continue to make new unit openings a priority in our capital allocation.

Operator: [Operator Instructions] Our next question comes from Dennis Geiger, UBS.

Dennis Geiger: I’m wondering if you could talk a little bit more about the menu enhancements or the menu of the future, which sounds particularly interesting. Could you share sort of approximately how many stores were in that test? Anything else sort of on customer feedback scores to share, which I guess sounds good. And then just as a quick reminder that’s rolling out across the system by the end of this month, so did I catch that correctly? Thank you.

Chris Morris: Yes. You caught that correctly. So let me step back. So in Investor Day, we said improving food and beverage is one of our six growth initiatives and specifically grown F&B attach. That’s a multi-phased — or our approach to delivering on those outcomes, is a multi-phase approach. What we tested, and we tested it in 10 locations, was the second phase of this multi-phased approach. But through this phase, it’s been highly impactful and done by design, what we intended to do was, first let’s remove unnecessary operating complexity. Because we want — for us to deliver a consistently high quality product, we want to set our operators up for success and we want to invest labor in the right areas that’s going to lead to quality and enhanced guest experience.

So we intentionally removed operating complexity. Everything that we’re doing is anchored in deep research, and so we spent a lot of time understanding how our guests view our F&B offering and where the gaps are. And through that research, we felt like that there were some areas on the menu that either weren’t necessary, our guests — there was no loyalty to those items based on our research or we were under-delivering on the execution. And so we redesigned the menu in an effort to close that gap. That was a second piece that we did. Third is, there were certain areas in our execution that we felt like that were driving up food costs without really adding value to satisfaction. And so part of what we aim to do was to remove, reduce that added cost to our food cost, when it wasn’t necessary.