Dave & Buster's Entertainment - Earnings Call - Q1 2026

Executive Summary

• Revenue of $567.7M modestly exceeded Wall Street consensus ($565.0M*) while adjusted EPS of $0.76 missed consensus (~$1.01*) and adjusted EBITDA came in slightly below (~$136.1M vs ~$137.4M*).
• Sequential comp trends improved through the quarter (Feb -11.9%, Mar -8.4%, Apr -4.3%) and into Q2-to-date (-2.2%), supported by “back to basics” execution and reintroduction of the Eat-and-Play Combo; management cited 11 of the last 30 days with positive SSS.
• Guidance reiterated: FY2025 capex < $220M, pre-opening ~$20M, cash interest $130–$140M; share repurchases of $23.9M in Q1 left $104.1M remaining authorization.
• Key call themes: remodels outperforming system by >700bps, game-room refresh with eight new cabinets and two attractions, Summer Pass launch, and tightened marketing spend/messaging; management emphasized improved traffic, weekend strength, and higher F&B attach rates.
• Near-term stock catalysts: continued SSS recovery, menu refresh later in the year, gamified promotions (leaderboards, sweepstakes), and proof of free cash flow conversion alongside disciplined capital deployment.

What Went Well and What Went Wrong

What Went Well

• Sequential comps markedly improved across months and into Q2-to-date as “back to basics” initiatives took hold; management noted 11 of the last 30 days with positive same-store sales.
• Eat-and-Play Combo reintroduced and performing strongly, driving double-digit opt-in and higher F&B attachment; ~30% of customers upgraded to all-you-can-play option in tests.
• Remodel cohort outperformed system by >700bps over last three months; new game content and “Summer of Games” rollout enhanced guest engagement.

What Went Wrong

• Comparable store sales down 8.3% YoY and adjusted EBITDA margin contracted to 24.0% from 27.1% YoY as higher marketing and R&M spend and pre-opening costs weighed on profitability.
• GAAP diluted EPS fell to $0.62 vs $0.99 YoY amid lower operating income and higher net interest expense, including sale-leaseback financing costs.
• Prior strategic missteps (marketing, menu, operations, remodels, game pricing) required unwinding and reset, delaying top-line inflection; management acknowledged the recovery remains early innings.

Transcript

Operator (participant)

Good afternoon, and welcome to the Dave & Buster's First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Cory Hatton, Head of Entertainment Finance, Investor Relations, and Treasurer. Please go ahead.

Cory Hatton (Head of Investor Relations)

Thank you, Operator, and welcome to everyone on the line. Joining me on today's call are Kevin Sheehan, our Board Chair and Interim CEO, and Darin Harper, our CFO. After our prepared remarks, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment and is copyrighted. Before we begin the discussion on our company's first quarter 2025 results, I'd like to call your attention to the fact that in our prepared remarks and responses to questions, certain items may be discussed which are not entirely based on historical fact. Any of these items should be considered forward-looking statements relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated.

Information on these risks and uncertainties have been published in our filings with the SEC, which are available on our website. In addition, our remarks today will include references to financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP measure contained in our earnings released this afternoon. With that, let me turn the call over to Kevin.

Kevin Sheehan (Interim CEO)

Thanks, Cory. Good afternoon, everyone, and thank you for joining our call today. I'm pleased to report that we are making good progress and our operating results significantly improved over the course of the first quarter. While performance in the quarter was nowhere close to where we want and expect to be, our back-to-basic strategy is working and is driving a material recovery in our top-line trajectory. In the quarter, we unwound many clear mistakes and made high-confidence changes to marketing, menu, operations, remodels, and games investment. While we are still in the early innings, we are improving our execution every day and have a very clear roadmap of work to do to continue to drive improvements and meaningful growth in the business.

The leadership team and our board are as confident as ever that our current actions will lead to significantly improved revenue, adjusted EBITDA, free cash flow, and shareholder value in the months ahead. As you all know, our financial position remains strong, and we have an excellent business model with high returns on new unit investment, best-in-class store-level economics, disciplined expense management, and significant operating free cash flow generation. As we have discussed before, the current leadership team and the full board are laser-focused on managing this business to drive both revenue growth and free cash flow generation. Our team continues to be energized by the opportunities we see ahead to meaningfully improve the operating performance of the business and shareholder value.

Our results in May were very encouraging, with a particularly robust Memorial Day weekend of solidly positive sales to kick off the summer, and we expect this momentum to continue. Results so far in June continue to show improvement. In fact, we have produced positive same-store sales in 11 of the last 30 days. Let me take a few minutes to update you on our progress on each of our back-to-basics plan and the changes we are making or plan to make to continue to unwind mistakes and deliver better execution and improved results. On marketing, we have rebalanced our media spend across channels, including getting back on TV, improved our creative, and simplified our messaging. We have successfully reintroduced our historically successful and best-in-class Eat-and-Play Combo, which has had really positive early results.

We will continue to refine and sharpen our marketing strategies and lean into our historically most popular and effective promotions. We also recently introduced our first-ever Summer Pass, allowing our guests to get unlimited gameplay and great food and beverage discounts each time they come to visit. Early feedback and results have been very encouraging. On operations, we have diagnosed many of the overwhelming factors for our operators that were requiring too many not fully tested or thought-out changes to promotions, menu, service style, pricing, labor setup, remodels, all while cutting back on training and failing to properly engage with the store team. We've significantly scaled back, returned to our proven practices, and have continued to spend significant time listening to our operators and their insights.

To that end, we are actively rolling out a robust store manager incentive plan driven by same-store sales growth that has positively shocked the system in a very morale-boosting way by allowing our managers to become the true owners of their business. On the F&B front, our classic Eat-and-Play Combo is a huge fan favorite and continues to perform very well with a double-digit opt-in rate given our strong promotion of this incredible value. The Eat-and-Play Combo allows our guests to sample our menu offerings and try out new games, which keeps them coming back for more. We have also corrected many pricing issues and enhanced the menu layout and are hard at work on the introduction of a new menu bringing back our previously top-selling entries, which we think will continue to drive check. This menu will be rolled out later this year after extensive testing.

I should note our food and beverage sales have markedly improved since April. On remodels, we are approaching the completion of 48 remodels and are continuing to see relative outperformance of these units versus the system. In particular, remodeled stores in the aggregate have outperformed the system by over 700 basis points over the last three months. As we've discussed, we launched remodels without proper prototype testing, operator input, store prioritization, local marketing, or budget control. We remain confident in the remodel strategy and are actively refining the prototype with operator input, reprioritizing stores, and tightened budget oversight. We continue to have a significant runway of opportunity to remodel and upgrade our system, and are supremely confident that with proper execution and oversight, we will generate highly attractive ROIs and lead to meaningful increases in sales and cash flow.

On games investment, we are racing to the summer with our summer of games that will be bigger and better than ever, with a leaderboard competition across all of our Dave & Buster's stores, inviting guests to compete all summer long challenged with five new and existing racing-themed games: Hot Wheels, NASCAR Pit Stop, Top Gun: Maverick, Cruisin, and Superbikes for a chance to win a grand prize giveaway sweepstakes and other monthly prizes. In addition, we will also have more brand new titles like Superpunk and Pac-Man Roller for the summer to further enhance the spring fallout of new games and solidify our spot as America's top arcade.

Additionally, we have the Human Crane rolled out in 100 Dave & Buster's stores, which is driving trial and excitement by being centrally located in the Midway, with an incremental big opportunity to continue to introduce this experience to additional stores, including our Main Event stores. New store development continues to deliver strong returns and remains a key part of our strategy. In the first quarter, we opened two new Dave & Buster's stores in Killeen, Texas, and Lansing, Michigan, and already in the second quarter, we have opened two Dave & Buster's locations in Freehold, New Jersey, and Wilmington, North Carolina.

We also successfully relocated our Honolulu, Hawaii, Dave & Buster's to the Premier Ala Moana Mall, and while it cost us two weeks of missed sales in the quarter, I'm proud to report that the new location is performing phenomenally, with the highest weekly sales ever recorded in the company's long history, with week one sales exceeding $1 million. With the opening of the first international franchise location in India in December, we expect at least seven more international openings over the next year. As of today, we have secured agreements for over 35 additional stores in the coming years. We see international franchising as a really nice driver of highly efficient incremental growth, monetizing our brand around the world with minimal investment and risk. With regards to our ongoing CEO search, the Board of Directors is finalizing their work to identify the permanent CEO.

I remain 100% committed to continue to work closely with the board and continue to operate the business and make the right decisions to drive performance above and beyond the improvements we've seen in the last few months. We will update you further when we have definitive news to report, which is all we will be saying about this topic on today's call, given the sensitivity of ongoing discussions with candidates. Before I turn the call over to Darin, I just wanted to mention to you and, importantly, our team, both in the field and in the support center. We are one team, and we are fully focused and dedicated to not just getting this business on track, but making it even better than ever before. We plan to continue to demonstrate to you, the investment community, the power of these brands, and this business model.

Stay tuned as we continue on our journey to deliver the full power of this great company. Now to you, Darin, to walk us through the financial results of the first quarter.

Darin Harper (CFO)

Thank you, Kevin, and good afternoon, everyone. Turning to a more detailed review of our financials, in our first quarter of fiscal 2025, comp store sales decreased 8.3% versus the prior year period. As Kevin mentioned, the first quarter was weighed down by a very soft February, with comps down 11.9%. However, March saw an initial improvement, with comps down 8.4%, followed by April with comps down 4.3% to exit the quarter. Furthermore, through the first five weeks of the second quarter, we are seeing further sequential improvement, with comps down 2.2%. We believe this sequential improvement reflects the impact of the various initiatives we've been focused on this year, and there remains a lot of work ahead.

During the quarter, we generated revenue of $568 million, net income of $22 million or $0.62 per diluted share, adjusted net income of $27 million or $0.76 per diluted share, and adjusted EBITDA of $136 million, resulting in an adjusted EBITDA margin of 24%. As a reminder, reconciliations of all non-GAAP financial measures can be found in today's press release. Quick call-out on the attribution of our adjusted EBITDA decline in the quarter versus the prior year period. With the cadence of our new store openings in late Q1 and early Q2, including our Hawaii relocation, we incurred a $2.7 million increase in pre-opening expenses versus the prior year.

We generated $96 million in operating cash flow during the first quarter, ending the quarter with $12 million in cash and $411 million of availability under our $650 million revolving credit facility, net of $14 million in outstanding letters of credit. We ended the quarter with a total net total leverage ratio of 3.1 times as defined under our credit agreement. In the first quarter, we invested a total of $115 million in capital additions on a gross basis or $110 million on a net basis when factoring in payments from landlords. As we mentioned to you before, we are focused on converting our significant operating cash flow to free cash flow through more strict management and capital spend, eliminating ineffective and inefficient spend.

We are committed to demonstrating our ability to generate free cash flow while continuing to invest in double-digit new store growth, new games, other high ROI initiatives, and a more diligent remodel program. We iterate our previously provided expectations for certain key cash flow items that are readily in our control in fiscal 2025, which ends on February 3, 2026. We continue to expect total capital expenditures to not exceed $220 million. This includes spend on net new store capital, remodels and other initiatives, games capital, and maintenance capital. We further expect pre-opening expense of approximately $20 million and interest expense within the range of $130 million-$140 million for fiscal 2025.

We are firmly committed to our high ROI and historically successful new store strategy with the opening of two new Dave & Buster's in the first quarter, one in Killeen, Texas, and the other in Lansing, Michigan, both opening in the final weeks of the first quarter, and one store relocation in Honolulu, Hawaii. As Kevin mentioned, quarter to date, we have opened two additional Dave & Buster's stores in Freehold, New Jersey, and Wilmington, North Carolina, and we continue to expect a total of 10-12 new store openings in fiscal 2025. In relation to our new store growth strategy and expectations for net new store capital in fiscal 2025, we have nine owned real estate assets today at varying stages of development, ranging from open and operating stores to recently acquired land for future stores at attractive sites.

We are in active discussions with potential partners to monetize this real estate to more efficiently fund our store development and more efficiently manage our cash flows. With that, Operator, please open the line for questions.

Operator (participant)

We will now begin the question and answer session. To ask a question, you may press Star, then One on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star, then Two. Please limit yourselves to one question and one follow-up. If you have additional questions, you may rejoin the queue. Our first question today comes from Andy Barish with Jefferies. Please go ahead.

Andy Barish (Analyst)

Hey, guys. Good afternoon. Just wondering if, at this stage, you're able to kind of have some degree of predictability in terms of the trajectory of the same store sales in the business, maybe kind of how you're looking at it on a multi-year stack basis or anything like that that may be helpful for us to try to project the rest of the year on what's been kind of a difficult or moving target.

Kevin Sheehan (Interim CEO)

Andy, I think you just got to be a little fair as we're coming out of where we've been in the last couple of years. As we see it, we've got a load of opportunity here to drive top-line sales. You've heard me use the analogy many times in sports where in the second or third inning or in the beginning of the second quarter of a basketball game, we've got a long way to go. Getting the business fixed and to the right cadence is job one. That's going to look like some outsized growth as we go through the next couple of years. Over the long term, what I've communicated to our team is this is a business that should grow in the 3% kind of same store sales with another percent or so on new stores.

It beholds us to get another % on incremental opportunities by getting into the expansion of the international selling apparel that we're starting to sell on the website, having a catering operation that we're starting now as well. Lots of little side things that we could do. You take that growth in the revenues, and then you discipline that with lean management and best-in-class cost controls to drive a much higher conversion to EBITDA. You manage your cash effectively, as Darin was talking about, very smartly. We need to first prove to you guys that there's a powerful amount of cash generation in this business, and we will do that this year. You guys will start to see that we're taking that cash flow and intellectually managing it to drive shareholder value.

We're in this for one purpose, and it's to drive this share price to heights it's never seen and should have been all along.

Andy Barish (Analyst)

Okay. Thank you, Kevin. Hey, Darin, it looks like CapEx is very front-end loaded this year. Half of your annual CapEx here in the first quarter, you did, I think, most of the remodels that are going to happen this year. Can you just kind of give us a sense of what that sort of last batch looked like or how much you spent? I imagine there was some spending upfront already for arenas and social bays and just trying to kind of get a breakdown of what that CapEx looks like without having read the queue yet. I guess that looks like it's out.

Darin Harper (CFO)

Yeah, that's right, Andy. Yeah, very front-end loaded, as you mentioned. That was right in line with expectations because we had a lot of new stores coming online within Q4 and Q1, number one. Yeah, we were sort of on the tail end of some more significant spending on the remodel side. Then we had a fair amount of capital with respect to games that supported our spring break of games and heading into summer of games. Yeah, of the $115 million gross spends, $53 million of that was related to new stores, about $20 million for remodels and other initiatives, $30 million on games, and about $12.5 million on maintenance CapEx. Look, we remain confident. Obviously, we reiterated our full-year guidance and feel like that continues to be a good number for us to support everything that we need to do.

Obviously, inherent in that is our ongoing sale lease-back transactions with key partners that we feel very, very good about. That is how we continue to see the balance of the year.

Operator (participant)

The next question is from Jeff Farmer with Gordon Haskett. Please go ahead.

Jeffrey Farmer (Analyst)

Great. Thanks, too, for you guys. Just drilling down on the improved same store sales trend, can you share anything in terms of what that's looked like across things like day parts, week parts, young adults, families, geographies, anything that sort of paints a little bit broader picture in terms of what you guys are seeing on the improved trend?

Darin Harper (CFO)

Yeah. Yeah, I'll take that. Yeah. So we're really encouraged from where we're seeing the improvement. Number one, it's predominantly driven by improvement in traffic. We're seeing that benefit entertainment and F&B both. Furthermore, we're seeing some nice check growth on the F&B side. That's not through taking price, but it's through higher attach coming from our Eat-and-Play Combo that we've been promoting. As Kevin has said, we've seen double-digit opt-in for that, which is great. We are discounting less. Our operators are hyper-focused on our peak hours right now and driving better F&B growth through speed of service, through server suggested, etc. Furthermore, what we're really encouraged with is the strength that we're seeing on our weekends. Really, throughout this calendar year, our weekend growth has far outpaced our weekday.

We are really encouraged by that because that is really focused on us driving a lot of this awareness through our media strategy, through our messaging, through our offer, and it is driving people in at these key peak times. We are seeing in the credit card data, it does appear as if some of that higher income is trading better, a bit of a trade-down that we think we are being beneficiaries of. That middle consumer is performing really well also. Just a bit of color there that hopefully gives you a little bit of perspective on where we are seeing this improvement.

Jeffrey Farmer (Analyst)

I guess that.

Darin Harper (CFO)

Go ahead.

Jeffrey Farmer (Analyst)

One other thing. Yeah, just your point is spot on because this is an area of importance to me as we look to regain some of our revenue in the late-night day parts. We're testing things with lunches. We're trying to push business into these underutilized time periods of the week. That is going to remain a focus. Of course, as Darin pointed out, getting it right in the important peak periods is also extremely important. We feel we have a good opportunity to push the time periods that we're busy further and further out.

Just one quick follow-up. Kevin, you mentioned the, I think it's a new store manager incentive program. Can you just sort of level set us in terms of where you were and what it looks like now?

Kevin Sheehan (Interim CEO)

Yeah. I mean, I think we now have, in my opinion, and somebody can prove me wrong, a best-in-class GM program where we have a very competitive salary. We have got a strong bonus profile if we hit the right metrics. We now have a long-term incentive that will lock our people in and will attract the best in breed of potential new general managers where it works on a rolling three-year basis. Every year you are rewarded based on your same store sales. It all starts with positive same store sales. The higher you get, the better your payoff. That amount is accrued for, and it is going to be paid over three years. The first payment, the first year is paid right away, and the second and third roll into year two and then year three.

In year two, you get the same sort of thing, and you accrue an amount for year two. You get a payment for one-third of it that year. You get a second third from the first year. You push the second year's program into years three and four. I do not know if I said it clearly, but over a three-year period, you are accruing on a three-year basis where you could start to get some meaningful payouts if you do the one thing that we care about immensely, and that is to drive same store sales, get out of the store, get into the community, talk to the leaders of all the corporations, talk about why it is a great place to have a corporate event if you are in the Main Event. I talk about bowling leagues and civic associations.

We just think it's going to drive the behavior of the general manager to start to think more like a CEO of a business as opposed to, I think I said on the last call, table stakes of coming in and making sure the lights are on, the team is there for the day, and we've got the right food order, and all the games are working. We now need to level set the business to a much higher level.

Operator (participant)

The next question is from Andrew Strelzyk with BMO. Please go ahead.

Andrew Strelzik (Analyst)

Hey, thanks for taking the questions. My first one on the improvement in the comp trends, are you able to identify or unpack which of the initiatives that you've implemented have really been the biggest contributors that you saw kind of a step function, whether it's the marketing side or the ops side? When you talk about having a very clear roadmap moving forward over the next three or six months, what are some of the biggest opportunities that you think still remain?

Darin Harper (CFO)

Yeah. With respect to the sales question, I think we're very encouraged through our improvement in the traffic side. That's supported by brand tracker work that we have where our guests are telling us they are more aware. The promotions that we're on media with right now are top of mind. The message, new games, is driving them to make a visit, and it's impacted their perception, etc. We're seeing a lot of consumer stats that are matching up well with that improvement in the traffic trend, number one. A lot of the things that we've also promoted, again, with the Eat-and-Play Combo, really plussing that up, going back to what's really worked well with us on that front. Again, just seeing really good attachment on that, which is driving food check. We're really pleased with that.

It is a number of things like that that we feel we have really good confidence that while we are still in very, very early innings with this, we feel like we are getting the right momentum with it. In terms of where we continue to have opportunity, again, just going back to we are in the early innings, I would say second to third inning on the development of these strategies. We believe that there is more that we can do from a marketing standpoint, just even better optimizing our spend, getting the right messaging, continuing to improve on the mix. On the game side, there is further work that we can really do to tap into what our guests are telling us, what they really want.

I think the pivot from where some of the entertainment on the store of the future was to where we want to go, there's big opportunity there. There's continued opportunity to improve operations. Those are all areas that we've now well-positioned the train on the tracks with that we can just continue to get momentum as we go through the year.

Andrew Strelzik (Analyst)

Okay. Maybe my follow-up. Over the last couple of years, there were a lot of costs that were either optimized or taken out of the business. Is there any sense, as you do this work, that you might need to reinvest in the business to kind of drive that long-term performance or any areas specifically where you feel like you need to lean in from an investment perspective? Thanks.

Kevin Sheehan (Interim CEO)

I mean, I don't think anything that stands out as being larger than life. We are going to benefit now from spending our money smarter. As was alluded to earlier, all the money that was spent on arenas and all that stuff is now going to be spent on initiatives that we test and make sure our guests love. Then we'll roll it out, and it'll be much more efficient than some of the stuff that was done in the past. I don't see that. I think once we get the top line going the way it needs to go, which we should start to see, hopefully, a better place in the second quarter and a much better place in the third quarter, that same store sales cures a lot of the sins, and then we get back to building the business.

We never have to, we shouldn't forget Darin and my background of lean management and wanting to make sure we're best in class, we're executing. Tony, who runs the operations, is always focused on the labor side of it and making sure we keep that top of mind, but provide a great guest experience for our guests when they come so that they come back and return and make sure the experience is right. That's all the stuff that we're working on with the remodels and everything to bring the traffic back. We were silent for so long when you think about the fact that Darin talked about getting back into the marketing. We were marketing to digital people that weren't getting the reach and frequency that we're learning how to get right now.

The marketing still has a long way to go, but we're moving in the right direction. I'm excited because every time we go through a new marketing initiative, we find out we got to a certain % of what we thought we could get to, which leaves so much room for us to build in the future. Lots of opportunity, lots of excitement. I think the costs will make sense out of that as we go forward as long as we get the same sort of sales, which we're all very confident with.

Operator (participant)

The next question is from Todd Brooks with The Benchmark Company. Please go ahead.

Todd Brooks (Analyst)

Hey, thanks for taking my questions. Two from me as well. First, on the gaming floor and the newness that's been flowed in over the course of this year, where do we stand for number of new cabinets after whatever's been flowed in for summer games? What's the outlook exiting the year? There was kind of an earlier discussion that there were a couple of years where we didn't touch the game floor. Can we walk through the cadence of how you get the game floor back to the right balance and newness over the next six quarters here?

Darin Harper (CFO)

Yeah, I can start with that. Total number of new cabinets that is being rolled out is eight, as well as two new attractions on top of that, the attractions being Human Crane and cotton candy. If you include those two, you're looking at about 10 per location, which is fairly consistent with where the brand had been pre-COVID. We feel good about that. Again, it's games that have high appeal with our guests, good IP. We have exclusivity with the new Hot Wheels game, which has given us the ability to do a nice partnership with Mattel. We've got a sweepstakes associated with that to where the consumer, with a new leaderboard concept that we rolled out, can win a new car. That is creating a lot of buzz, and we're getting some really, really good impressions with that.

That gives you some perspective of what we've rolled out here. Look, in terms of where we go from here, I think there was a lot of learnings that we had with the remodel program on making sure that we focus on the right entertainment experience that fits well with the guest occasion, that kind of fits within the Power Card ecosystem. That's where we've really driven a lot of the demand is that that's what guests are familiar with, that that's the type of experience that they want.

We are currently and actively working with our partners on finding the right types of attractions that are not just ubiquitous attractions, but forms of entertainment that fit well with our guests, fit well with the occasion, but also address the need states from our guests of wanting to gamify their experience more and interact more with those that are in their group. There are a number of things that we are working on that we are excited about that we will look forward to sharing in the months ahead.

Todd Brooks (Analyst)

Okay, great. Thanks, Darin. If we're just looking at the same store sales result for the quarter, I know there's a lot of moving pieces. You said you were encouraged by the fact that it was predominantly traffic-driven, the recent momentum. Can you give us any color looking back to Q1 of kind of a traffic check type of split to understand any sort of pricing changes that were made that might have impacted average check or just any sort of nuances that could add some more color to the same store sales result that was reported? Thanks.

Darin Harper (CFO)

Yeah, sure. We historically do not provide any specific details on traffic versus check. I'd say when you look at the predominant impacts on that sales trend, most of that is coming from traffic. Going back, there was no discrete pricing that we took during the quarter. We did moderate some of the discounting or perhaps said differently, we did not get as aggressive with discounting as the brand did last year. For instance, we're rolling over 50% off food from the prior year. Obviously, we're now leaning into our summer of games campaign rather than 50% off food. That's going to be accretive to our F&B check. That's a portion of the story, but the majority is driven by just an improvement in traffic.

Operator (participant)

The next question is from Dennis Geiger with UBS. Please go ahead.

Dennis Geiger (Analyst)

Great. Thanks, guys. I wanted to first ask from here, a lot of compelling initiatives to improve the trajectory. Just as we think about some of the ongoing challenges, Kevin, maybe framing up how you think about sort of macro as a headwind right now versus some of those brand-specific or self-inflicted issues that you're clearly improving, but that maybe just take a little bit of time to work through. Is it more the latter than sort of the macro that we're in, in your view, as far as some of the lingering pressure that's still out there as you work through the fixes?

Kevin Sheehan (Interim CEO)

I think the work on the fixes is going to take us through a good portion of the year as we roll through this quarter. We're still benefiting from that, and we will continue to. We're starting to make new initiatives that are driving value. I think what happens for us, because we've got so much power going behind the business right now, is that you lose the impact of the economic landscape. We're aware of it, but because there are just so many things that we're working on, we feel pretty confident that we'll ride through this period and hopefully come out the other side a much stronger company and doing, I would say, better than most in the industry because of the effort we're doing to make up for the past. I don't know if I answered that well, but.

Dennis Geiger (Analyst)

No, that makes good sense. Maybe just on that, as you talk about getting through and getting to the other side, you gave some comments on the call. I think with respect to at a high level, right, as an algorithm, maybe long-term, I think you spoke to about 3% same store sales maybe longer term on the other side of this. I probably heard it wrong, but maybe another percent or so on new stores. Then some other things to drive revenue growth you touched on. Can you correct me on the new store comment that you made and what that new store looks like longer term if you were directly speaking to that?

Kevin Sheehan (Interim CEO)

Yeah. I mean, at the end of the day, this is a Kevin thing with my team, and I believe in we should be best in class. If we're all thinking like owners, like the new general managers program is set out to support, we should be looking to drive same store sales, positive growth anywhere from 3%. As I said, in their programs, they do much better beyond 3%, to be honest. We're driving the right behavior. That's going to be, to me, the base business. Then we have the growth from the new stores, and that's going to add on to that in whatever the percentage is, something between 1-2%, I suspect, as we get bigger and bigger.

It is incumbent on us as a management team to be thoughtful about how do we deepen our relationship and how do we extend our business proposition based on the value of the Dave & Buster's and the Main Event brands. I'm thinking about that encompassing international and some of the other things that we haven't announced that we're pushing to drive to extend our revenue opportunity. It's an ongoing thing that I've used in many other companies along the way. Just getting people rallied around the metrics that make sense and are important to me and the leadership and the board kind of helps people understanding. I was saying to the guys before, with the number of shares that we have outstanding, I'm blistering on everybody's forehead. $350,000 is plenty of earnings per share or whatever the number is.

When you put it into that terms, all of a sudden, people can understand, "Holy crow. I can make a difference." That is what we are going to hold them to. Everybody's got to start thinking like owners of the business.

Operator (participant)

The next question is from Brian Mullan with Piper Sandler. Please go ahead.

Brian Mullan (Analyst)

Hey, thanks. Just a question on the game side. On the last slide, you referenced, I think, the value proposition for the consumer, perhaps testing some things that could extend the time of play. Could you just talk about those tests, anything you've learned so far, what you're measuring and looking to see, and how you'd expect that to progress?

Darin Harper (CFO)

Yeah, yeah, absolutely. A couple of things that we're doing there. One, as we think about this Eat-and-Play Combo, one of the things that we added to it this year for the first time in the brand is an all-you-can-play option. Of all of our Eat-and-Play Combos, we've got 30% of folks upgrading to that all-you-can-play option. It is very clear in our consumer research and feedback that we're getting is, hey, guests like the ability to know, "Hey, I can spend this much and have a known quantity of time of which to play." That's one aspect. Probably the bigger thing that we are in a couple of phases of testing is on our kiosk. That's testing a more simplified rate card structure for our guests.

I think we all agree that last year, we kind of made it a little bit too confusing for the guests. We are trying to simplify it and bring back the right flow for the guests in terms of initial pricing and supercharges, etc. Along with that is testing, bringing our game pricing down to extend the amount of time that they're in the midway. That was something that we believe we might have overextended a little bit last year. That is an area where, again, we're focused on getting the same amount, if not more from our guests, but giving them better value through the right gameplay. We are being very strategic with how we price redemption versus non-redemption games to really give them the best experience possible while managing our margins in the right way.

Early days in that test, but we're pretty excited about the learnings that we've gotten so far.

Brian Mullan (Analyst)

Okay. Thank you for that. On the food side, on this call, you've talked about seeing some average check lifts from Eat-and-Play, which is great. I wanted to ask about just separately, I think you've talked about making some changes to the menu design or configuration. Have you taken any actions on that so far? Is that something you're still working on? If you have, how has the consumer response been?

Kevin Sheehan (Interim CEO)

Yes. It's very important, by the way. What we did when we got in, we thought that the menu did not present to our guests the menu that we thought they wanted. We reskinned the existing menu and just highlighted the opportunities for our guests that we think they want. That has helped out on our ticket. It has been successful. That was part A. We could do that quickly by just reskinning the menu. Part two, which is the more evolution, and we want to do this right, and we want to do it one time, is we are bringing back the menu and the opportunities that were the most successful for Dave & Buster's over its long history. We are going to showcase those entrées and beverages and desserts and shoot the pictures well and make sure the menu is very appetizing.

We're testing it in different versions that go into test in the next couple of weeks. We're going to learn from that and retest if we need to and roll out a menu toward the fall, hopefully in time for when the business picks up in the fall. We want to do it in a very measured way. We've included a lot of input at every stage from our operators, made sure they felt part of it. We wanted to make sure we understood that we weren't creating more complexity in the dining, in the kitchen. We're doing a lot of work to make sure we do this really well and really right the first time.

Operator (participant)

The next question is from Jake Bartlett with Truist Securities. Please go ahead.

Jake Bartlett (Analyst)

Great. Thanks for taking the questions. I just wanted to start quickly with a clarification, another stab at the question, Kevin, that you made about unit growth. It's so different to think about 1-2% growth versus the 5-6% growth that we've seen in the last or that's guided this year and we've seen recently. Is that the message that you guys are really rethinking the unit growth trajectory of this business and focusing? I think that would mean you're focusing more on same store sales and free cash flow generation. I just want to make sure it seems like a really big change if that really kind of is what you're trying to communicate. I had a couple of follow-ups.

Darin Harper (CFO)

Yeah. Yeah. [Crosstalk]Hey, Jake, Darin. Yeah. I'm glad you asked that question to clear up. Yeah. I think Kevin was kind of providing just sort of a high-level summary view sort of internally. No, we still plan on 10-14 new units a year for the foreseeable future, which obviously is a much higher percentage. No, please don't read into that comment as a change in strategy and capital allocation with respect to new stores.

Jake Bartlett (Analyst)

Great. I really appreciate that. My other more real questions are on what should we expect in the next month or two? I look at kind of the May, and the performance is really strong and impressive to see that improvement. I want to understand better what is happening in June and July from here. The games that were mentioned, I believe the new ones that came on have been in place throughout the last five weeks, so those are kind of included. I think maybe summer of games marketing starts. Just to understand what changes from here to potentially, I would think, drive maybe an improvement from here.

Darin Harper (CFO)

Yeah. So yeah, as you noted, our game rollout was sort of phased between spring break and summer. That is now fully loaded. We're continuing to finish rolling out Human Crane and activating that in 100 Dave & Buster's. That's a key thing. We've launched our Summer Pass program as well about three weeks ago. Early days, we're really encouraged with that. Obviously, the pass model is something that consumers, a subset of our consumers, have really said that they like. We're pretty pleased with that initial performance as well. We're launching our new leaderboard as well across Dave & Buster's associated with a subset of these new games, particularly our new Hot Wheels game that we're now promoting, again, with this sweepstakes to where you have the ability with your high scores to be in the drawing for this new game.

We'll also have first, second, third place prizes throughout the location as well. Again, really strong impression with that campaign right now that we're really excited about. I think it's continuing to drive that momentum, continuing to optimize that media spend along the way. Now, as we've said, we've rolled out the new incentive model for our field, and we've got the field focused on a hospitality model and a separate incentive program to really drive food attached during this period of time as well. There's a number of different things that we're focused on that are just continuing to drive a lot of what we've implemented, but plus it up. That gives us time to continue to develop our initiatives for heading into next year as well.

Operator (participant)

The next question is from Brian Viccaro with Raymond James. Please go ahead.

Brian Vaccaro (Analyst)

Hi, thanks. And good evening. Just two quick ones on margins, if I could. First, obviously, in the first quarter, there was the sales we leveraged in the margins, but can you unpack the other OpEx line a bit more for us? And are you expecting I think there was some higher ad spend, maybe some R&M, but are you expecting those to continue into the second quarter or rest of the year?

Kevin Sheehan (Interim CEO)

Part of that increase is some incremental marketing spend that we had in the period as well. We had about $4.7 million incremental marketing spend to help drive and promote these initiatives. You do have that. We do have some incremental R&M spend as well. That was anticipated. A lot of that is focused on our game room floor to really drive and make sure that with the introduction of all these new games, we have the games working, we have things refreshed the right way. There is an element of that in our cost as well. I'd say, look, we do not anticipate the cadence of marketing to continue at that pace for the year. Some lines with R&M, we are sort of anticipating a little bit more spend this year versus the prior year.

We feel like that's the right investment for us to drive our growth and get us to top-line positivity.

Brian Vaccaro (Analyst)

All right. Thank you. If I could just follow up on just the comps themselves and the trajectory here. Any color on walk-in versus your events business? I know there's been some investments in new staff and team members to lead the special events business. Any color there? Any color differences between Dave & Buster's and Main Event? I think a lot of these initiatives are focused on Dave & Buster's. Any differences worth noting there? Thanks again.

Kevin Sheehan (Interim CEO)

Yeah, sure. Yeah. Overall, we've seen from the special events side some good performance there that's outpaced our walk-in for the year. It's up slightly year over year. Overall, I'd say on balance, D&B and Main Event are continuing to perform similarly. There are elements of areas that we're focusing on D&B that we're seeing some metrics which, again, give us further confidence on the things that we're really focused on are driving the business forward. We are seeing some even greener shoots on aspects of the D&B business. Overall, nothing extraordinarily notable to call out.

Operator (participant)

This concludes our question and answer session. I would like to turn the conference back over to Kevin Sheehan for any closing remarks.

Kevin Sheehan (Interim CEO)

Hey, thank you, Operator. Thank you all for joining. In closing, our back-to-basic strategy is working, and we are driving a material recovery in our top-line trajectory. We are seeing in real time that our compelling product offering and value proposition are driving renewed interest from our loyal guests and new guests this summer. We have a very strong business model with exceptional brand awareness, high guest satisfaction and affinity, national scale, high returns on new units, best-in-class unit economics, disciplined cost management, and strong free cash flow. Our leadership team, our operators, and our board are fully focused on driving revenue growth and free cash flow. We're excited about the opportunities ahead to enhance performance and increase shareholder value. We look forward to speaking with you again soon, and have a great evening. Thank you.

Cory Hatton (Head of Investor Relations)

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.