管理層發言
Hello, and welcome to the Dave and Buster's Entertainment Inc. First Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during the session, press the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I will now turn the conference over to Cory Hatton, Vice President and Head of Entertainment Finance, Investor Relations and Treasurer. Please go ahead.
Thank you, operator. And welcome to everyone on the line. Joining me in the room on today's call are Tarun Lal, our Chief Executive Officer; and Darin E. Harper, our Chief Financial Officer. After our prepared remarks, we will be happy to answer any questions. This call is being recorded on behalf of Dave and Buster's Entertainment Incorporated and is copyrighted. Before we begin the discussion on our company's first quarter 2026 results, I would 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 2000. 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 release this afternoon. And with that, let me turn the call over to our CEO, Tarun Lal.
Thank you, Cory. Good evening, everyone. I first want to speak directly to our Q1 results, which came in below both our own expectations and the expectations we set with you last quarter. We started the quarter well in February. The spring break calendar shift between March and April played out largely as expected. But the macro backdrop—elevated gas prices, geopolitical uncertainty, and a meaningful softening in consumer sentiment—were all a real headwind in April. That said, we are not here to make excuses. We have a resilient business model and expect to be able to navigate these obstacles. Our same-store sales growth declined 5.4% in the first quarter of fiscal 2026. We found that our dollar-per-day messaging did not resonate as strongly as we hoped. Since then, we have pivoted to more compelling promotions, which are resonating with customers. We have also made significant progress in establishing partnerships with IP providers and expect to have exciting entertainment announcements for you in the coming months. We are making significant progress, but I want to remind you that we are in the early innings and look forward to providing updates as soon as possible. We have seen improvement quarter to date in the second quarter despite unfavorable weather, with comps down approximately 4%. We remain confident in our ability to continue improving in the back half of the year. We are extremely excited about our summer offerings, including our new games rollout and the World Cup watch activation, which kicked off last Thursday. After nearly a year fully immersed in this business, I remain extremely confident in our ability to dramatically improve operating results. Over the past several years, we have drifted from the core elements that historically drove our success: investment in games, food & beverage, marketing, and operational excellence. We are systematically restoring each of these pillars now. We have also significantly strengthened our leadership team. In just the last month, we have added top-caliber executives: a Chief Marketing Officer in Jeremy Tucker, who joins us from AutoNation, Planet Fitness, Walt Disney, and Spin Master; a Chief Technology and Digital Officer in Kevin Fay, who joins us from Wingstop; and a Chief Legal Officer in Rachel Morgan, who joins us from Nexstar. We are equally focused on field operations and culture because exceptional execution and guest experience drive traffic and sales. With that in mind, I am delighted to share that we will be announcing a new Chief Operating Officer by next week. Now we have the right strategy, the right team, and the right business model to create meaningful value for our guests and our shareholders. Our priorities this year remain clear: turn same-store sales sustainably positive and generate meaningful free cash flow. This management team is highly confident we will generate positive comparable-store sales growth in the remainder of the year, driving revenue and adjusted EBITDA growth, and more than $100 million in free cash flow for the full year. Let me now provide an update on each pillar of our back-to-basics strategy. First, on marketing. We are rebuilding our strategy around discipline: a simplified promotional calendar, data-driven media mix modeling, and an optimized balance between TV and digital. Getting the right message to the right audience at the right time is one of our biggest opportunities to improve traffic, sales, and EBITDA. Our priority is rebuilding brand consideration through culturally relevant promotions and attractively priced offerings. We are still in the early innings of our marketing optimization. We have conducted a number of tests in the first quarter which have shown success, and which we expect to roll out nationally this year. On the flip side, we also tested a number of items—such as our dollar-per-day messaging and certain changes to our media spend mix and target audience—that had less success but have provided us with valuable lessons for the future. On the earned media side, we have seen a lot of success with bold activations that generate meaningful earned media and put us into cultural conversations. For example, in May, we announced that we would place tickets to the World Cup finals inside our human crane, and the response has been extraordinary. These shareable moments drive organic awareness. Beyond that, we are activating our loyalty program to drive personalized messaging and increase visit frequency. We are building a scalable special events engine that turns events into cultural moments and converts event guests into repeat walk-in visitors. Overall, we are very excited about the evolution of our marketing leadership and look forward to continued progress with Jeremy now at the helm as CMO. Second, our food and beverage business has seen an early win from our back-to-basics strategy. Comparable food and beverage sales grew approximately 5% in Q1, driven by our return to the historically proven menu last October and by our strong Eat & Play combo execution. Before these changes, the share of gaming guests who also bought food had declined significantly as our menu drifted post-COVID. We have reversed that trend decisively in 2025, which has continued in 2026. Our ongoing success in food and beverage has resulted in nine straight months of positive F&B same-store sales. We have additional exciting limited-time offers launching in the coming months which we expect to be highly accretive. Main Event rolled out a new menu last month, and we continue to test food-focused promotions which have shown signs of success. We expect to drive continued growth in the back half of the year. Third, our games offering. This management team strongly believes we need to reinvest in new games after a six-year pullback. New, relevant games and attractions are essential to driving both new and repeat visitation and same-store sales growth. Just a few weeks ago, we rolled out ten new games, the most since 2017. Coupled with initial game investments in 2025, this reverses a prolonged period of underinvestment, and we expect to roll out at least five additional new games in the balance of 2026. This is a direct response to an abundance of customer feedback citing a lack of newness on our traditional game floors. We have moved with significant urgency to address it. We also know from our inaugural State of Fun report that nearly half of Americans say their lives lack fun, and more than half would prioritize fun if affordable options existed. Our strategy is simple: give people exciting, affordable reasons to reconnect in the real world. The new lineup spans high-energy competition, immersive gameplay, and hands-on skill challenges. Highlights include Hot Wheels Ultimate Speedway, Icy Slush Rush, John Wick: Continental Pursuit, Odin's Hammer, and Perfect Pump. Plus, of course, The Mandalorian and Grogu and Stranger Things IP, alongside guest-tested original concepts. Many of these games are already pacing among the top revenue generators in their first weeks, which is validation of our continued midway investment. And this is only phase one. We have a lot more in the pipeline, including several exciting IP partnerships that I look forward to sharing soon. We are equally excited about leveraging our watch offering on massive 40-foot screens and 30-plus TVs per location to drive visitation during the World Cup this summer. The World Cup, which kicked off on June 11, is a major catalyst for our business. We have launched a full 360-degree activation, two new soccer-inspired arcade games—World Soccer and Kick and Win—plus exclusive tournament-themed food and drinks, including sliders inspired by the host countries. As I mentioned, we put tickets to major World Cup matches inside our human cranes, including USA group stage games and all the way through the finals. We have also launched our Hat Trick watch experience, a ticketed watch party for kickoff and championship matches with all-you-can-eat wings and fries and unlimited gameplay all day, starting at just $24.99. It has attracted significant crowds for the opening games, cheering on Mexico's 2-0 victory. This builds on the playbook we deployed during the Super Bowl and creates a repeatable, high-engagement format for major watch occasions that we will continue to enhance and make more programmatic. Combined with our summer season pass, the World Cup activation positions us to capture significant incremental traffic during an already strong summer season. This revitalized product offering represents a meaningful step forward in quality, variety, and cultural relevance. We are combining world-class IP with innovative original concepts in a way that drives per-capita spend and repeat visitation. For full-year 2026, our ambition is to continue evolving our play experience and position Dave and Buster's as the Fun Capital of America. Fourth, operations. We are investing in and energizing the field through training that empowers teams to deliver exceptional guest experiences. A collaborative culture, supported by our shared service center, is reducing turnover and creating an environment where our people and brand can thrive. As we discussed at the start of the year, our full-year 2026 obsession metric is speed of service: a one-minute greet and four-minute drinks, backed by coaching and performance management. We are sending a clear signal: our success is tied directly to execution and to the guest experience. Finally, our revamped remodel program continues to progress. We are confident we have identified the right layout to drive traffic, improve productivity, and deliver strong ROIs at a reasonable cost. We recently opened six remodels and plan to open two more over the next few months. Early results from this new remodel prototype have been very encouraging, driving a strong 7% comp uplift consistent with the far more expensive remodels of full-year 2024 and 2025. As a reminder, the new cohort of remodels cost approximately half of what the legacy remodels cost, while still contributing a similar sales lift. In fact, these remodels were positive in same-store sales in the first quarter and year to date, providing us further confidence that we are executing on the optimal prototype. This renewed remodel strategy highlights the power and importance of continuing to invest in our core business as a key traffic and comp driver for our brand. Taking a step back, after COVID, this company moved away from the core and often simple elements that made it successful: marketing, promotions, the F&B offerings, the annual investment in games and entertainment, operational excellence, and store refreshes that preserved what customers love about D&B all changed significantly. We are now actively going back to basics, restoring those elements piece by piece, and it is working. Armed with direct and candid feedback from the guest, we know that games innovation and value are of utmost importance and we are urgently addressing these issues. We know Q1 was disappointing. What I hope you take from tonight is that we understand why and that we are taking the right actions and that the underlying business is already responding. We have made meaningful progress over the past year and expect that progress to convert into financial results more quickly from here. Before I pass the call over to Darin, I want to be clear that we are highly focused on strict capital expenditure discipline, minimum ROI thresholds, and generating significant free cash flow. Net CapEx for full-year 2026 remains targeted at no more than $200 million, down from approximately $270 million in full-year 2025. We are committed to strict ROI thresholds and eliminating inefficient use of capital. We dynamically reevaluate our capital investment plans, including our new store plans, and we will make adjustments as we weigh the best returns for each dollar of capital. We continue to plan to open 11 total new stores in full-year 2026. If and as we make material adjustments to that plan, we will communicate them to you. Very importantly, we continue to expect to deliver over $100 million in free cash flow this year. To talk about this more and review our financial results for the quarter, let me hand the call over to Darin E. Harper.
Thank you, Tarun, and good afternoon, everyone. As Tarun touched on, there are several areas where we have made solid progress over the past several months that I will provide highlights on here shortly. Before that, as a reminder, on a weather-adjusted basis, Q4 FY 2025 comparable store sales were down 1.5% with sequential improvements throughout the quarter. February, our first period of Q1 FY 2026, continued this improvement in trend; however, given broader macroeconomic challenges that intensified in March and April during our highest seasonal time of the year due to spring breaks, our Q1 FY 2026 comparable store sales decreased 5.4% versus the prior year. As Tarun mentioned, despite some unfavorable weather, our comps quarter to date in Q2 have improved to down approximately 4%. Despite this consumer headwind, there are several areas of the business where we have seen improvements which, coupled with our strong unit economics and cash flow generation, led to an overall $84 million improvement in free cash flow in Q1 FY 2026 as compared to Q1 FY 2025. This, in turn, allowed us to reduce our outstanding debt while still continuing to invest in new stores, remodels, and a fresh set of high-quality games. During the quarter, we continued our trend of F&B same-store sales growth, with an increase of over 5%. Special events grew approximately 3%. Our remodeled locations continue to outperform the balance of the system by nearly 700 basis points, led by our most recent and significantly more cost-effective remodel prototype. During the first quarter, we generated total revenue of $559 million; net income of $6 million, or $0.16 per diluted share; adjusted net income of $8 million, or $0.22 per diluted share; and adjusted EBITDA of $123 million, resulting in an adjusted EBITDA margin of 22%. As Tarun mentioned, we expect to generate positive comp sales in the remainder of FY 2026, leading to EBITDA growth and a steady improvement of our margin profile. As a reminder, reconciliations of all non-GAAP financial measures can be found in today's press release. We believe we can meaningfully improve our margins over time by continuing improvements in our cost management. We have put significant additional effort into further improving our internal processes and controls around costs and remain steadfast in identifying material cost savings across all aspects of the business. As you know, we have reworked our D&B store remodel strategy to bring down cost by half versus the store remodels of FY 2024 and FY 2025. I am pleased to report that we have recently completed six of these new remodel prototypes with an additional two scheduled to open in the coming months. Despite costing half of our prior remodels, our new cohort generates nearly 700 basis points of outperformance versus the rest of the system. As Tarun mentioned, we are positive in both the first quarter and year to date in this new cohort. We are very encouraged by their initial performance and particularly robust return profile due to the efficiencies we have found on our costs. We believe this new prototype will maximize the impactful elements of our successful store models while eliminating previously ineffective spend. We expect to remodel another 10 to 20 locations in FY 2027. Our new store development continues to deliver strong returns, and we have a solid pipeline of upcoming store openings. In the first quarter, we opened one new domestic store, and already in the second quarter, we have opened three additional domestic stores. We continue to anticipate opening 11 new stores in FY 2026. Looking beyond FY 2026, we continue to identify optimal sites but will remain extremely judicious in maximizing return on every dollar of capital spending. We see merit in potentially redirecting new-store capital to further invest in our core through remodels, deleveraging, and other forms of returning capital to shareholders. As Tarun mentioned, we will communicate material adjustments to our capital strategy to you. On the international front, we opened our fifth international franchise location during Q1 in Australia, and our sixth international franchise location opened in Q2 in Delhi, India. We expect at least one more international opening in the balance of the year in Mexico City, Mexico. As a reminder, we have secured agreements for over 30 additional international franchise stores in the coming years, and we see international franchising as a driver of highly efficient growth, increasing our customer base around the world with minimal investment and risk. We have a sizable opportunity internationally and see strong upside from this asset-light growth model. We generated $25 million in free cash flow during the first quarter, which as previously noted is an $84 million improvement compared to the negative free cash flow in Q1 FY 2025 of $59 million. As a result of this free cash flow generation, we ended the quarter with $20 million in cash and $499 million in total liquidity combined with the availability under our $650 million revolving credit facility, net of $20 million in outstanding letters of credit. We remain committed to generating meaningful free cash flow while continuing to invest in new store growth, new games, and our revamped remodel program. In the first quarter, we invested approximately $71 million in CapEx on a net basis when factoring in payments from landlords. We continue to make progress converting our strong operating cash flow to free cash flow through stricter management of capital spending by eliminating inefficient capital spend. As Tarun mentioned, this year we continue to expect this net CapEx figure to be no greater than $200 million for FY 2026. Our entire team is squarely focused on driving savings to expand EBITDA margins while tightly managing capital spending to generate significant free cash flow. Given our plans, management is highly confident in its ability to generate comp-store sales growth for the balance of the year. Coupled with our capital expenditure discipline, we continue to expect to generate more than $100 million of free cash flow during FY 2026, which we believe positions us well to continue investing in the business. Our financial foundation is strong, underpinned by high returns, strong unit economics, disciplined cost management, and clear potential to generate meaningful cash flow. This was demonstrated by our generation of $25 million in free cash flow in Q1, despite over $70 million in net CapEx investment and a 5.4% comparable store sales decline. Leadership and the board remained focused on driving same-store sales growth and significant cash flow generation. With that, operator, please open the line for questions.
分析師問答
Thank you. If you wish to remove yourself from the queue, simply press 1 again. We do ask for today's session that you please restrict yourself to one question and one follow-up. First question comes from the line of Andy Barish of Jefferies. Your line is open.
Hey, guys. Good afternoon. Just wondering on the second-half inflection on same-store sales: are you assuming anything changes in the external environment, given that has been a challenge you noted on the call?
I think that we have more confidence in our internal strategy and execution than in being really dependent on the external environment, Andy. We cannot say anything definitive about the external environment. Of course, we are highly optimistic that things will improve in terms of consumer sentiment. But what really gives us a sense of confidence is the fact that a lot of things we have put into motion are now becoming reality from a guest perspective: new games, new watch experiences, new IP partnerships. That is what is giving us confidence as we get into the second half of the year.
Got it. And then just a follow-up: are you still seeing incrementality in labor and the value initiatives that are weighing on margins? Or is that starting to be lapped from the year now that you have been there, Tarun?
I'll take this. Overall, we feel like we have managed our margins well in terms of the key elements impacting the value equation: cost of sales and labor. From a cost standpoint, we've driven improvements on cost of sales, and we've seen margin improvements from our new menu enhancements as well as driving more attach. We have elevated our offering and managed margins. On the labor side, we continue to be as effective as we can with scheduling at peak times where we are delivering on the guest experience, particularly coupled with our F&B offering. We do not anticipate any material adverse changes to those items as we go through the balance of the year, and we believe we have the structure in place to deliver on the growth we need.
Your next question comes from the line of Sharon Zackfia of William Blair. Your line is open.
Hi, thanks for taking the question. First, on the World Cup: are you doing anything there with special events as well, and what is your insight on what that demand generation could be? And as you think about that guest—lapsed or even new to Dave & Buster's—what is the plan to create more durability with that revenue stream following the World Cup?
That is a great question, and that is exactly our objective: once you get this special-events guest in, how do you build a durable business by getting them back again and again? Special events are a big and growing part of our business, and events such as the World Cup help promote that part of the business even more. We have invested in an incredible organization and an outstanding leader who runs our special events business, Robert Jenkins. He has a team in the field speaking to corporates and different institutions at all times, leveraging a massive database and making a lot of outreach. This business requires a lot of detailed work. In terms of durability, our investments in new games, food and beverage, and experiences matter because when these guests come in and they see the difference—exciting new arcade areas, an improved menu, and value promotions—that brings them back.
To add, with regard to the World Cup, we launched a full 360-degree activation: a couple of new soccer-inspired games, tournament-themed food and drinks, ticketed events, Human Crane promotions, and influencer-driven watch content. We are leveraging Human Crane to offer some free tickets to the World Cup. Once guests are in, they taste our food and experience our 40-foot wall. We hope it becomes part of their consideration set going forward.
That is helpful. In April, when you saw the shift in the business, is there anything to call out in terms of trends by household income? And anything you have subsequently come up with that might attract that customer back?
Consistent with what we've seen, the lower-end consumer is where we have seen most of the pressure. The higher-end and middle consumers are more consistent. We are focusing on value offers targeted to that lower-end consumer without over-discounting and cannibalizing the business. Actions include revamping our rate cards, offering half-price games, promoting Eat & Play combos with the ability to add an entrée for $4.99 when you load any PowerCard denomination, and driving greater attach rates. Those elements are targeted to attract that lower-end consumer back.
Your next question comes from the line of Andrew Strelzik of BMO. Your line is open.
Hey, thanks for taking the question. First, could you be more specific about what you are learning around the marketing messaging and customer targeting, why some recent things did not work, and how that is framing your approach going forward?
Andrew, great question. Let me step back and share what our guests have been telling us. One, they told us we had to elevate our product—games and food & beverage. We have responded: we invested heavily in games in the last 30 days, and the F&B changes took effect last October and have driven attach increases. Two, guests are craving value. The competitive marketplace has many value offerings, so we promoted half-off games and tested dollar-a-day, which did not hit the bull's-eye. However, our new version of the Eat & Play Combo has tested tremendously well and we plan to launch it in the next 30 days. On media, we learned you cannot swing to one extreme. Previously we spent heavily on television at times, then shifted heavily to digital. Consumers engage with media in different ways, so we performed media mix modeling in February and March and are now using data to determine target audiences and channel investments, including linear TV versus CTV. Finally, we are adopting a structured approach with a primary message and a secondary message. Our primary message right now is our ten new games; our secondary message includes the World Cup watch experience. We are becoming more disciplined in both messaging and media allocation.
And then on capital allocation, you sounded more open to potentially shifting dollars between new-store CapEx and internal investments. How are you evaluating that decision? Is it about site selection or internal performance? Some more color would be great.
Fundamentally, our number-one priority is to drive same-store sales growth in our core stores. Our core business is the priority. If CapEx is required for remodels to drive that, it will be a priority. As for new unit growth, we are not turning our backs on it, but we will be very responsible with capital and only deploy new-store capital when we have supreme confidence in a site's returns. In summary, our core business is the priority; we will continue to build new stores only when returns are highly certain.
I would interpret it less as a loss of confidence in new-store growth—new stores continue to deliver great returns—but more as a reallocation of capital to our core business. That will allow us to be even more discriminating about sites to open. More to come, but we believe this reallocation will be meaningful.
And Andrew, between Darin and me, the one number we are very fixated on is the $200 million of CapEx. That is a finite amount of money that we need to allocate thoughtfully.
Thank you. Your next question comes from the line of Eric Wold of B. Riley Securities. Your line is open.
Thanks. A couple of questions. First, to clarify your expectation for positive same-store sales for the balance of fiscal 2026: does that start today, or does that include the quarter-to-date decline of roughly 4% and assume a reversal in the remainder of the quarter to get back to positive comps for Q2?
Eric, the best way to look at that is starting today through the balance of the year. That is how we are looking at same-store sales growth.
Yes, that is perfect, Darin.
Second question on the games and the installation of the ten new games to date and five more for the remainder of the year: when you install and promote a new game, are you seeing a lift in gameplay outside of the new games as people come in and try everything, or is gameplay more focused on the new games and you are not really seeing a broader lift?
I can take this and Tarun can add color. The best way to look at it is how these games complement the overall entertainment experience. The 10 to 15 games we are rolling out this year represent over 10% of our game-room floor. We look at it as refreshing the game floor, keeping it relevant, giving us news to message to guests, and driving visitation. It is more about traffic-driving, relevancy, messaging, and getting lapsed customers in, rather than solely driving incremental spend while they are in stores. That said, certain game investments, like Human Crane, can generate incrementality. Coupled with optimizing dwell time in the box, we have found that also leads to more F&B sales, which is incremental to check growth.
I completely concur. One positive highlight is that consumers are spending more time on our games floor, which helps drive F&B revenue. The key challenge for us remains marketing these games more effectively to drive foot traffic. Finding the best use of media and communication with consumers is our primary area of focus.
Your next question comes from the line of Brian Vaccaro of Raymond James. Your line is open.
I had a question on the adjusted free cash flow guidance. Can you help us bridge that guide? You are maintaining it at $100 million despite the weaker-than-expected first half. Could you walk us through the moving pieces that allow you to maintain that guide?
Sure, Brian. Despite same-store sales performance, we have other levers to drive free cash flow. The simplest way to look at it is operating cash flow less gross CapEx adjusted for sale-leaseback proceeds. As demonstrated in Q1, despite comps down 5.4% and $70-plus million in net CapEx, we generated $25 million in free cash flow. We are able to deliver through capital-spend management, working capital management, and other cost controls. That gives us confidence to reiterate the guide.
On the last call, you spoke about adding senior resources to look at cost savings. Are there additional cost savings you have identified versus the prior call that could be helping that free cash flow outlook?
Yes. We are focused across the P&L on cost-of-sales optimization—not lessening the product for the guest, but being smarter and more efficient with spend—utilities, insurance, and other areas. We have identified some very significant cost opportunities and are leaning into them to deliver on the $100 million free cash flow guide.
Quick follow-up on capital allocation and new-unit growth. We ran math on your noncomparable stores and arrived at a noncomp AUV in the mid- to high-$7 million range. Can you confirm that is about right? If so, what is the average cash investment on those units, or can you sketch out the cash-on-cash ROI you have seen on the current noncomp base at those AUVs?
You're in the right ballpark on the AUVs. Keep in mind a good chunk of the latest cohort are some of our smaller prototype locations that we underwrote at those volumes, but we continue to deliver strong circa 30%-plus cash-on-cash returns even at those volumes. On that topic, as we redeploy capital, I would anticipate about half the number of new units in FY 2027 and probably FY 2028 as well—so circa five new units—so that should help frame how to think about it.
Your next question comes from the line of Michael Hickey of StoneX. Your line is open.
Hey guys, thanks for taking our questions. Given your track record over the last year and quarter-to-date on same-store sales, it's just surprising that you are so highly confident that as of today you are going to inflect positive on comps, especially when macro was a factor that took down April and the first quarter but you will not give a view on it. Is there any specific evidence you can point to as to why your confidence is warranted? Second, last year you only refreshed about 8% of your arcade. When thinking about capital allocation and resetting your entertainment side, why were you not more aggressive earlier in refreshing that area, which was clearly a concern?
Great questions. Our confidence and optimism come from the fact that many initiatives—marketing, operations, and game investments—are now coming together. We've also partnered with exciting IPs that we will announce in coming months; that gives us tremendous confidence that the brand will be back in conversation and culture, and traffic follows. Regarding why we were slow to invest earlier: that's a fair question. If you buy games from suppliers without a thoughtful approach, you can end up with similar games skinned differently. There is a significant lead time in developing proprietary games, especially those with IP, because IP partnerships take time to formalize. We do want to invest in new games and have the capital to do so. We are being thoughtful about which games to add so consumers get diverse experiences versus similar ones to our existing offerings.
Your last question comes from the line of Dennis Geiger of UBS. Your line is open.
Thanks. One more question on the entertainment part of the business: you mentioned lack of newness as a major issue. Anything else you are hearing from customers about the entertainment softness? Anything additional on the value proposition? And has mobile-phone gaming had some impact? Anything else on entertainment besides newness that you are observing?
Dennis, great question. The biggest competitor is the couch at home: mobile phones and home gaming. That's why it is so important to introduce games that are truly distinctive and can only be experienced at Dave & Buster's. There is a lead time involved in introducing and launching those sorts of experiences. We brought in Putnam Shin about six months ago from Walt Disney; he has transformed our internal thinking about guest experiences. We are being methodical and disciplined in investing capital behind experiences that will drive guest satisfaction and traffic. We are conscious not to repeat past mistakes of rushing in without sufficient quality and thoughtful underwriting.
To add, value has been a key piece of guest feedback on the entertainment side. We have been hyper-focused on promotion testing, passes, rate-card setup, kiosk flow, half-price games, and other initiatives. Based on these changes, while still preserving card load, we've increased the number of games guests are playing by about 20% year over year and dwell time is up nearly the same amount. We've done a lot of positive things and have additional initiatives to roll out this summer to further address value concerns.
That concludes our Q&A session. I will now turn the call back over to CEO Tarun Lal for closing remarks.
Thank you, operator, and thank you all for joining us this evening. Dave and Buster's is an iconic brand at an obvious inflection point. We are executing a clear, differentiated strategy built on innovation, operational rigor, and an unwavering focus on the guest experience. Across brand marketing, F&B quality, in-store execution, and next-generation game content, we are raising the bar, and early results are validating our thesis. I want to remind you that we are still in the early stages of this transformation, and we are encouraged by the momentum we are building. We deeply engage with our guests and our operators, listening closely to their direct feedback and using it to inform every decision we make. That connection gives us confidence that the initiatives we have in play—from our evolving product offering and the Eat & Play Combo to our sharpened approach to value—are resonating and will continue to drive meaningful results. We are already seeing it in the data: metrics on new games, guest satisfaction scores, and value perception scores are all trending in the right direction. We will accelerate our revamped remodel program and further optimize our media spend to sharpen our approach to both new and repeat customer acquisition. We are also cultivating exciting IP partnerships that we look forward to announcing in the coming months and are enthusiastic about what they will mean for the brand. There are significant improvements still to come, and we look forward to sharing the positive results we are confident these initiatives will produce. Our strategic framework is simple and disciplined: build lasting brand equity; drive top-line growth with urgency; deliver a world-class guest experience at every touch point; protect and expand industry-leading unit economics; and underpin it all with the right talent, culture, and technology. The financial model is straightforward: same-store sales growth drives EBITDA expansion, and EBITDA expansion drives long-term shareholder value. We are building momentum and are still in the early innings of unlocking this platform's full potential. We have a major catalyst ahead with our currently live and comprehensive World Cup 360-degree activation, which is an exciting step along our clear and achievable path to sustained same-store sales growth, expanding free cash flow, and durable value creation for shareholders. I want to thank our teams across the country. They are the ones making this all happen. I look forward to updating you on our continued progress. Have a wonderful evening. Thank you.
This concludes today's conference call. You may now disconnect.