Good afternoon, Welcome to Dave & Buster's Entertainment, Inc. Third Quarter 2022 Conference Call. All participants will be in a 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. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please limit yourselves to one question and one follow-up, after which your line will be muted, but you can re-enter the queue. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Cory Hatton, Vice President of Investor Relations and Treasurer. Please go ahead, sir.
Thank you, operator. Welcome to everyone on the line. Leading today's call is our Chief Executive Officer, Chris Morris, and Michael Quartieri, our Chief Financial Officer. After our prepared remarks, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Incorporated and is copyrighted. Before we begin the discussion on our company's results, I'd like to call your attention to the fact that in our remarks and our responses to questions, certain items may be discussed which are not entirely based on historical facts. 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 the various risk factors and uncertainties have been published in our filings with the SEC, which are available on our website. 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 announcement released this afternoon, which is also available on our website. Pro forma financials, including Main Event for the trailing 4 quarters ended October 30th, 2022, are available at the bottom of the events and presentation section of our IR website. I will turn the call over to Chris.
Okay. Thank you, Cory. Good afternoon, everyone, and thank you for joining our call today. We are pleased to report strong financial results for the third quarter, which are clearly indicative of the progress we are making on our growth strategy. We delivered record revenue for the quarter driven by double-digit comparable sales growth, which in turn led to record adjusted EBITDA for the quarter despite the challenging macro in this inflationary environment. I wanna recognize the outstanding effort of our teams, both in the field and here in our support center, that produced these record results as we continue the work of integration to become a more efficient organization. Since our last analyst call, our team has been focused on three key work streams. One, effectively managing the merger integration. Two, long-term strategic planning.
Three, managing sales and profitability in the near term to offset the ongoing inflationary pressure in our business. I'm pleased to say we are ahead of schedule in exceeding expectations in all three areas. As it relates to our merger integration, our team's excellence and execution has accelerated the pace of realizing the anticipated benefits. To date, over $17 million of annualized synergies were implemented, and we continue to be confident in our $25 million target. The pace of implementing these Synergies has accelerated as we swiftly address all redundant staffing, continue to combine our purchasing power to offset inflation, and move toward combining the best-in-class systems across both brands. We are moving aggressively to fully capture synergy opportunities, implementing superior operating initiatives and leveraging the scale of our combined operations.
Our teams have been aggressively focused on developing our long-term strategic plan to further cement the Dave & Buster's and Main Event brands as undeniable leaders in location-based entertainment and add meaningful long-term shareholder value. Based on a thorough strategic review of the business anchored in deep consumer research and spending considerable time learning directly from our operators, our core brand position for our Dave & Buster's brand going forward will bring greater focus to executing adult occasions aged 21 to 39, who are visiting our locations to have a great time with their squad. These crew connectors, as we like to call them, are energized by social situations and in the know on culture and social trends happening at the time.
Over the months and years to come, this refined brand positioning will guide our marketing strategy, entertainment innovation pipeline, food and beverage offering, store design and layout, and tech-enabled hospitality model. This long-term holistic approach to managing the business anchored in strategic planning and operational execution led to the successful reinvigoration of the Main Event brand, and we're excited to apply the same approach to the larger Dave & Buster's enterprise. We look forward to sharing more details with you at our Investor Day in the early part of next year. Lastly, our teams have been focused on mitigating inflationary pressures with thoughtful pricing and increased operating efficiencies. Despite ongoing inflationary cost pressure in the business, we've made great progress and continue to find opportunities to manage our cost and increase our profitability.
In addition to the work on cost controls, we are very pleased with the top-line momentum throughout our portfolio. As indicated by our third quarter results, guests continue to visit and spend at healthy rates. On the marketing front, in Q3, we launched our national Where Winners Watch football campaign, featuring Kansas City Chiefs great Travis Kelce, designed to drive awareness of Dave & Buster's as a great football viewing destination, which contributed to our strong Q3 performance. In November, we recently completed our Eat & Play Combo promotion at Dave & Buster's. We've had tremendous success with our local focus on World Cup watch activations, and are excited about the launch of our Impossible Holiday Hangout contest, which will bring together four friends from around the country to spend the holiday together at Dave & Buster's in Kansas City.
We head into Q4, our special event sales teams and operating teams are aggressively focused on delivering a strong holiday banquet season. We are optimistic that the upcoming holiday season will provide additional momentum as we enter the new year, as our special events business has nearly recovered to pre-COVID levels. We are excited about the future of this organization. We have two industry-leading brands in Dave & Buster's and Main Event. These brands have exceptional business models, strong assets, and talented teams. Bringing these brands together under one umbrella presents our company with exceptional growth opportunities, which will benefit all stakeholders. We have a clear line of sight on the strategic opportunities ahead for the Dave & Buster's brand and a world-class management team with a proven track record of superior execution.
We believe there is meaningful upside potential for this company and our stakeholders, we are working diligently to realize that potential. Let me take a minute to recap a few growth initiatives that have me excited about the opportunity in front of us. The continued development and rollout of our improved hospitality-based service model. The brand awareness work that's driving innovation of our product offering, and in turn, how we approach the refresh program for our stores. The continued recovery of our special event business. Our development pipeline of new stores for both brands. Our progress on developing our international franchisee network. The tenacity of our teams to identify and implement our synergy opportunities. Last, but certainly not least, the proven capabilities of the executive management team, which gives me confidence in our ability to succeed.
To put it succinctly, everywhere we look, we are seeing significant growth opportunities, and we are poised to unlock long-term shareholder value. Now with that, let me turn the call over to Mike to review our Q3 results.
Thanks, Chris. We're pleased with our financial results for the third quarter and encouraged by the trends continuing into the fourth quarter. Amidst considerable economic uncertainty, we remain focused on successfully managing our newly combined business, which generated record revenue of $481 million and produced a record $90 million of adjusted EBITDA in the third quarter, which I'll remind you is holistically our Seasonally Softest quarter of the fiscal year. We produced an 18.7% adjusted EBITDA margin in the third quarter, which represents a 320 basis point improvement above the 15.5% margin of the third quarter of 2019. We continue to be laser focused on optimizing our cost structure and unlocking our synergy target of $25 million from the combination with Main Event.
With regards to Pro forma Comparable Store Sales figures, I'd like to direct you to the supplemental schedule titled December 2022 Supplemental Pro Forma Financial Data posted in the Events and Presentation section on our IR website. I'd like to highlight that the strong comp sales figures in the third quarter of 13.3% versus 2021, and 17.5% comp versus 2019 on a consolidated basis. Notably, our F&B business has continued to improve with our tailored new menu offerings, and F&B represents an increasing mix of our total revenue versus the prior year period.
Additionally, our special events business continues to provide tremendous upside as it continues to normalize to pre-pandemic levels with the Pro F orma combined comps down only 6.7% this quarter versus 2019 in comparison to last quarter when it was comping down 13.4% versus 2019. We generated $68 million in operating cash flow during the quarter, contributing to an ending cash balance of $108 million for total liquidity of almost $600 million when combined with the undrawn revolving credit facility. We ended the quarter with a net total leverage ratio of 2.2x . Turning to capital spending, we invested a total of $64 million in capital additions and opened three new Dave & Buster stores, one in Lynnwood, Washington, one in Long Beach, California, and the other in Bakersfield, California.
We plan to open one new Dave & Buster's branded store and two Main Event branded stores in the fourth quarter of fiscal 2022. Finally, let me update you on Comparable Store Sales through the first five weeks of the quarter. Pro Forma combined Comparable Store Sales has increased 3.1% compared to the same period in 2021, and 9.2% compared to the same period in 2019.
We estimate that the Calendar Shift of the holiday season, as it specifically relates to our special events business in 22 versus 2019 for this five- week period, represents a temporary - 3% overall comp headwind, which will reverse in the remaining weeks of December. To summarize, we are excited about the strong execution in our business, our progress capturing synergies, the numerous growth opportunities for us to pursue, and the talent and experience of our team to drive growth despite the challenging macroeconomic environment. We remain focused on closely managing costs and capital spending to ensure we strategically unlock the maximum value of these two great brands and deliver the highest returns possible for our shareholders. Operator, please open up the line for questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Let me remind you that you are limited to one question and one follow-up question. At this time, we'll pause momentarily to assemble our roster. The first question will come from Andy Barish with Jefferies. Please go ahead.
Yeah. Hey, guys Happy holidays. Just a couple of thoughts on the top line, if you could. Were you pleased with Eat & Play in November, I guess, firstly? Secondly, can you know, talk to us about sort of the importance of December for the quarter and any quantification maybe on, you know, on how we should think about, you know, sort of seasonality versus the 3 Q as you know, kinda look at average unit volumes.
Hey, Andy Barish, this is Chris I'll start and let Q kinda fill in some additional color. Happy holidays to you as well. Appreciate that. In terms of Eat & Play Combo, you know, what I'll tell you is that we, you know, we're pleased with the trends in our business on top line, and that includes the month of November. You know, when we look at our entire arsenal of marketing activities, the ones that I walked you through, you know, first the NFL campaign, we felt like that did a very nice job of bringing awareness to the sports viewing. We continue to see nice sales results on the weekends, which we think is a combination of first, the campaign we believe was successful.
Secondly, our operators are very keenly focused on maximizing throughput on the weekend. We think that helped. The Eat & Play Combo in November, we're pleased with. You know, as we look at, you know, really trying to understand the contribution that promotion had, you know, the data's a little murky. Overall, you know, we're pleased that we did it. We have no regrets. The thing I'll tell you about that particular platform is it's, you know, it's one of those promotions that is identifiable to the D&B experience. You know, over time, there's a lot of brand equity, a lot of promotional equity in that particular campaign. I would look to see us to continue to do it.
Going forward, we'll be very selective when we do it, as opposed to kind of an always-on type of promotion. No regrets at all in November. You know, as Q walked you through, as we think through our Q4 sales performance, you know, overall we're pleased. You know, when you make the adjustments for the timing, there's still, you know, considerable momentum in this business, on both brands. The December period is a very important period, as you mentioned, because of, you know, the majority of our sales during that period, for the Main Event brand and a significant portion of the sales for the Dave & Buster's brand comes from special events. Our teams are laser focused on, you know, maximizing the opportunities on special events.
It's been a couple of years since that demand has been there. The demand is back and, you know, we intend to optimize that. We've got the teams focused, we're selling and our operators are ready to execute. You know, at this point in time, we are approaching pre-COVID levels, which we're very pleased about.
Yeah. Andy, just one other thought just on the timing and what you see in the first 5 weeks. If you think about our special events business, the peak of that takes place in the three-week period leading up to the Christmas holiday. In 2022, this peak consists of the weeks of December 5th, the current week that we're in, the 12th and the 19th. If you go back and look at 2019, the Christmas holiday was on a Tuesday, Wednesday, which caused that three-week period to push forward. The weeks were really December 2nd, 9th, and 16th. The difference between just December 2nd versus December 5th in this period is significant to us, and that's what's causing about a 3% headwind in our comp store sales for just this five-week period.
We'll get the benefit of that on the back end as we get closer to that, you know, Christmas holiday week. We'll pick up that extra piece of business at that point. Overall, for the month of December, when you take this noise out between the five weeks and the full quarter, we're extremely pleased with the level of work that we're seeing by our sales team and what we think we will experience from the special events business as a whole for the month of December.
Thank you very much.
The next question will come from Jack Bartlett with Truist Securities. Please go ahead.
Thank you. This is Jake. you know, I had a question on just so we can understand the trends for I think you're reporting same store sales, you know, just for Dave & Buster's because the Main Event stores, I don't think are considered comp base, and then you're giving us Pro forma. The guidance is in Pro forma, but I think you're gonna be reporting just the same store sales for Dave & Buster's, if I got that right. What can you give us what the quarter to date was for Dave & Buster's, you know, as it relates to the, you know, the 13.6 versus 19 that you reported in the third quarter?
Yeah, I think just for perspective purposes, you know, when we look and we manage the business, we're managing it as one consolidated entity. We have one management team in place. We do look at both brands as having a slightly different offering, the way we allocate the resources accordingly, we put both in that same vein. From our perspective, what we're trying to do is get to a point where we are commenting on the consolidated business as a whole because we are redeploying assets between both brands accordingly on a daily basis.
Okay. You know, just I'm trying to think about the trends here, and it looks like the first five weeks of the third quarter, you know, for Dave & Buster's alone, I think that's all you provided at the time, was 17.6%, and then you reported 13.6%. You know, guidance is for even on a, you know, perform on a, on a consolidated basis, you know, significant deceleration. We're not guidance, but the quarter to date, even when making that three-point adjustment to, you know, 12% versus the 17.5%. There does seem to be a deceleration going on. You know, I guess, you know, your thoughts on what's driving that?
you know, the Eat & Play when you ran it in April drove a really massive, a pretty really strong result in same store sales doesn't seem to be repeating. you know, how... what do you think is driving the-- it seems like it looks like it's decelerating momentum?
I think I'd taken to a point, if you're looking versus 2021, you do have the impact of the Delta variant, coming to a close kind of the end of October, which November had a nice bump. If you recall, during our earnings call a year ago when we commented on November, we had comp store sales at Dave & Buster's, which was +14% for that month alone on the walk-in business. From a 2021 perspective, we are lapping that at this point in time. You look at the balance of the year in that 2021 period, Omicron hit and, you know, the business fell off dramatically. We do expect to have a much easier comp for the December, January period as we go forward.
Well, I was talking versus 2019. You started the third quarter at 17.6%, and then it was 13.6% for the quarter, and now, you know, it's closer to 12% consolidated. There's a deceleration versus 2019, you know, what do you think is driving that?
I would just look at just overall trends in the business. I think from a back-to-school perspective, there are, you know, economic issues that are out there, although we don't see it as much. I mean, to talk about comp store sales at the levels that we are versus 19, I think is still a remarkable component of this business that shows the strength of the overall business in itself.
Right. I agreed. just one question on the, you know, as we think about the quarter to date, and then we think about, you know, I believe the comment was that or maybe you can confirm that you expect the special events business to be, you know, above 19 levels, so kind of no longer a drag. Should we think of the whole quarter, you know, if demand kind of levels remain the same, we would think about the quarters being higher than the quarter to date, just as you consider the lift that you have, I think, probably some visibility on for the special event? Should we think about the quarter as, you know, higher than what the quarter to date is just given that dynamic?
The short answer is yes. I mean, if you look at, you know, quarter-to-date sales, if just adjusting for the holiday mismatch, which, as Mike said, we expect that mismatch to recover as we move into December. That alone, you know, would tell you that we expect, you know, the quarter-to-date number to end up better than the five weeks. You factor that in to just the strength in the business, the focus on special events, the pacing that we're on right now to deliver on special events. We feel great. You know, we feel great about the business, we feel great about the trends and excited that, you know, we're in a position to end the year on a really high note.
Great. Thanks a lot. I appreciate it.
Thank you.
The next question will come from Andrew Strelzik with BMO Capital Markets. Please go ahead.
Hey, good afternoon. Thanks for taking the questions. My first one, I was curious if you think there's any reason to believe, recognizing kind of that the overall momentum of the business is still strong, you know, that there has been a touch of a slowdown. Do you think there's any reason to believe that you're seeing any pushback from some of the pricing or some of the pricing adjustments at the game level maybe that you made? Do you have kind of any metrics or data points that you're watching to gauge that?
Yeah. I mean, we certainly have the metrics to... Anytime we raise prices, you know, that's something that we take very seriously. We, you know, we're always going back and doing the postmortem analysis. We're not seeing, no, we're not seeing any pushback or negative reaction or change in consumer behavior related to the price increases. In fact, we still feel like that there's room in some aspects of our business to continue to raise prices. Nothing there. You know, I guess I would just, you know, point you back to the comments that we've been making is that there's still, you know, the underlying trends in this business are still very good. We still feel good about that.
Okay, great. On the Synergies and the integration, what exactly do you have left to do there? You talked about the $17 million annualized, I believe. How much of the $25 million do you actually expect to realize this year on a reported basis?
First part of your question, what's left to do? I'll kind of walk you through what's been done and where we're headed. You know, immediate actions that were taken in the end of Q2 were really around the headcount, where we got rid of the duplicative nature of you don't need two Chief Financial Officers, you don't need two CEOs and the like. Those decisions were made quickly and implemented swiftly. The next phase that you're seeing right now, which gave us the confidence to up the ante from $20 million-$25 million, is really around our supply chain, where we've been able to combine the purchasing power of both brands, renegotiate contracts. That work is now done, and we're now entering the next phase of that component, which is around taking certain contracts out to bid.
That RFP process takes a little bit longer, much more demanding on the, on the procurement team rather than just, you know, looking at contracts, consolidating and eliminating the one that's least favorable for us. The next phase, which I call the more long-haul , step forward, is really around more systems related and more foundational structural items that we need to make changes to. Consolidating, whether it's the POS system, back office accounting systems, HR systems, combining 401( k) plans. It's that type of work that's in process, and that's the long lead time that takes, you know, the 18-24 months that we've quoted previously when we started this process.
As far as what we think we're gonna experience or see come through, I think it's at least, I'm gonna give directionally about $6 million coming through, in that period. A lot of that is what we're seeing in our food and beverage costing, which is helping to offset a lot of the inflationary factors that we've seen before.
Okay. Perfect. Extremely helpful. If I could just squeeze one last quick one in here. You gave the update on 4Q openings. Is there any change in the way you're thinking about the 23 store openings or just didn't hear an update to that? Thanks.
No, not at this time. We are very mindful of the timing as it relates to any supply chain issues, getting governmental approvals at the local level for permitting and things to that effect. The 15-17 that we've talked about earlier in the last quarter, is still in place, but we'll be providing more details and updates, when we get to our investor day coming up, in the April timeframe.
Great. Thank you very much.
You're welcome. Thank you.
The next question will come from Brian Vaccaro with Raymond James. Please go ahead.
Hi, thanks and good evening. I just wanted to circle back to the comps and some of the combined versus brand trends. I mean, the two brands have obviously been generating very different levels of AUVs versus 2019. I think it's important to try to maintain at least a little perspective, at least in the near term, on how the two businesses are trending, because one was up 30% and 40% and one was up, say, 10%, what have you, on the D&B side.
I guess just in the spirit of reducing the risk of any confusion, could you provide, you know, any breakdown between the quarter to date comp D&B and Main Event and maybe give us some perspective on average weekly sales, understanding their special events moving around, but just to try to keep us all on the same page, given the moving pieces here.
Yeah. Look, I'll give it to you the best that I can. If you're looking at, you know, the quarter to date from an average weekly sales perspective, and again, we're working with both brands, it's about $183,000, that is comparable to what we've seen previously. It's the same kind of basic $184,000 that you saw in Q3. The weekly average of what we're seeing is fairly consistent with that level of, call it, yep, differentiation or split between the Main Event and the Dave & Buster's brands that you saw back in Q3 that we showed in the detail to help everybody get their arms around what Main Event is and to help you guys with your modeling perspectives.
If you're looking at the consolidated average weekly sales for 2021 for both brands, on a consolidated basis, that would be about $177,000. If you're looking back to 2019, that number is about $171,000. There is meaningful growth in the quarter during that period, just between the different brands I would say, sticking in line with the trajectories that we saw previously.
Okay. perhaps you'd be willing to maybe... Okay, we'll stay to the combined. Versus 2019, you're up, I think you said 17.5% on a combined three-year comp in the third quarter in this quarter you just reported, and that's slowed to, say, maybe in the 12% now if you make the special events adjustment. Has the... You're, you've moderated, let's say, underlying by, call it, 500 basis points. I don't know if you'd agree with that high level, but around 500 basis points, on a versus 2019. Is one brand decelerating more than the other? Can you provide any qualitative perspective on Main Event versus D&B, you know, that three-year trend, one versus the other?
Yeah. The, there is no noticeable difference between, you know, the trends. This is, what you're seeing is just, you know, last quarter, we provided the details for Main Event, you know, to aid investors and analysts in the modeling since, you know, Main Event was not public before. Now, rolling into the Dave & Buster's, we thought it was necessary to provide that detail so you could adjust. Then going forward, you know, I appreciate where you're coming from, wanting more detail. Going forward, this is the disclosures that we've elected to pursue, and it's reflective of how, as Q said or as Mike said, it's reflective of how we're managing the business. You know, Main Event is 20% of our business. We, we don't wanna get into, you know, providing granular data.
We don't provide that across any different regions. You know, we're focused on managing the entire enterprise, and this is how, you know, we're looking at the business, and this is how we wanna communicate the business. To the extent that there ever is a material shift, you know, between the two brands and we deem that it's necessary to talk about that, then we will do so just as we have done in the past. You know, the trends heading into five weeks for Q4, proportionally between the two brands is comparable to, you know, where we've been. This just, you know, this is the disclosure that we're going with going forward.
Okay. Understood. Fair enough. My follow-up, I guess, is on the margin front. I guess I'll pick the other OpEx line here. Saw quite a bit of leverage on the other OpEx line, I guess, versus our expectations or, you know, compared to what you saw in last quarter if we're trying to base it out a little bit. Can you just kind of at a high level move through some of the puts and takes? I know sometimes there's swings in marketing, swings in R&N and other spend levels that might show up in that line. Mike, any help on sort of the puts and takes on that line in the quarter would be very helpful. Thank you.
Yeah. I think from a puts and takes perspective, I think we continue to see higher costs around this area. Two components of that. Part of it is, you know, external janitorial services. As we, as I, we've talked about before, as we reopened, post-pandemic, finding labor was difficult, so we did a lot of outsourcing at that point. As we are seeing today a recovery in the labor market where we've got, you know, 12% more job applicants for positions today than we saw a year ago, we are able to now start going back on a strategic basis and looking and evaluating whether those costs are better off in-house versus external. There is that piece of business that's going. We still continue to see, higher costs around security. Wage inflation there has not come down.
When you're asked to, you know, include security from the local municipality because of certain areas that they have cut back on, that is a cost that we're absorbing, and we wanna do that, because we take the safety of our customers first and foremost as one of the most important table stakes they have in choosing to come to a Dave & Buster's or a Main Event. We also look at things from a, from a repairs and maintenance perspective. We are looking through... If you kind of go back post-pandemic, there was a lot of deferred maintenance in the building. Some people have come back, and we have made a little bit more of investment there on the R&M side from an expense perspective. The recovery aspects of what's offsetting some of that is the utility costs that we spoke about before.
It was a very hot summer that we all had extreme, higher energy costs that we had to deal with, not only from a usage but also from a rate perspective. That utilization's obviously coming down as we get to the cooler months of the wintertime. Those are pretty much the four puts and takes that we have.
Appreciate that. I'll pass it along. Thank you.
You got it.
The next question will come from Jeff Farmer with Gordon Haskett. Please go ahead.
Thanks. I have a couple questions for you guys. Can you just update us on what you're seeing from the lower income consumer? How large is this cohort for you guys and how are they behaving?
Sure. I'll take that. We've, you know, we're constantly trying to understand our business, understand the trends and, you know, certainly understanding, you know, how, you know, our guest profiles are impacting our business. There's really nothing noteworthy there. We, you know, there's still strength in our business across all demos. We're not seeing, you know, we haven't seen a disproportionate shift in trends on a lower end consumer.
Okay. Just really two modeling ones. The first is simple, what interest rate should we be using in the model considering the movement in rates out there? You guys were talking about 25% commodity inflation last time we heard from you. What's the update there?
Let me start off with commodity inflation. If you're looking at 2021, I should say versus 2021, in Q2 we were up 17%. In Q3 we're only up 9%. A lot of piece of that is the work that we've been doing around our Synergies and really driving home on the renegotiation of contracts and combined purchasing power to lower our commodity costs at that point. When you look at our interest rate, remember, we've got the 7.625 notes that are outstanding. When you're looking at LIBOR or sorry, LIBOR, SOFR, we're at SOFR + 500 is the term loan. You can just look at the forward yield curve for SOFR for the next year, and that will give you your interest rate.
Okay. Thank you.
The next question will come from Sharon Zackfia with William Blair. Please go ahead.
Hi, good afternoon. I guess the question on the spend per card, I know that had been quite elevated kind of in the early innings coming out of the pandemic, for Dave & Buster's. How has that been trending now as we've gotten to maybe a more normalized pandemic status with the consumer?
Yeah, we are at a same consistent level of what we saw coming out of the pandemic. If you look at it over the last year, we've seen no decline in the average transaction value of the Power Card at the kiosk.
Right. And then on the EBITDA margin, I know you've been targeting 200 basis points over 2019. I wanna confirm that that's also a target for the fourth quarter. Then beyond kind of this current quarter, I assume we're not gonna be talking about 2019 anymore. I think things become a little bit more apples to apples when we get into 2023. I'm just curious on the Dave & Buster's business, given that, you know, you guys have fresh eyes on the business. There had been a lot of volatility pre-pandemic with comps negative. I mean, what do you consider a win for Dave & Buster's? Is it slightly positive comps, mid-single?
Like, what's the winning scenario here as you think about Dave & Buster's in more of a kind of steady state environment where we're not talking about the consumer still getting back to normal patterns?
I'll handle the first part of your question in regards to margin. Yes, I am getting pretty tired of talking about 2019 levels as well, but as you do look back to 2021, you still see, you know, whether it's the Delta variant or the Omicron variant. You know, it just makes for a noisy comparison, so that's why we've been providing 2021 and 2019. The 200 basis point commitment that was given a year plus ago, we still remain committed that that's what we'll be able to achieve on this Q4 period.
Sharon, in terms of defining a win, you know, look, we're here to grow this business. We wanna, you know, we're maniacal about, you know, growing our business through a very sharp focus on the guest experience and, you know, driving revenue through the way we manage our business and manage the throughput and focus on guest satisfaction. Really, I guess, what defines winning is just, you know, the magnitude of the growth. We wanna grow as much as possible in all areas of the business. You know, starting, you know, we, you know, we're very focused on growing our guest counts and maximizing our revenue opportunities.
We wanna grow our check, and we wanna do it in a way where it's very profitable and we flow dollars to the bottom line and maximize EBITDA and open as many stores as we can in the future. I don't know exactly how to answer your question. I can tell you that, you know, we believe right now we are winning. We're pleased with the results that we're seeing in the fourth quarter. You know, as we look through the noise of this holiday mismatch and what we're seeing on special events coming into December, you know, we're in a winning position right now. It's really just, you know, in terms of we always want more.
As we move forward, this is a team that is completely focused on, you know, maximizing every single growth opportunity, but doing it, you know, the right way, to lead to sustainable results. Hopefully that answers your question.
Yeah, I suspect you'll tell us more when you have the Analyst Day. Thanks.
This concludes our question and answer session. I would like to turn the conference back over to Mr. Chris Morris, Chief Executive Officer, for any closing remarks. Please go ahead.
All right. Thank you, operator. In closing, we'd like to again commend our team for the exceptional results they continue to produce at our stores across the country and for all the hard work being done at our Dallas Support Center to integrate the Main Event business and optimize the infrastructure to support the bright future of these two phenomenal brands. Thank you for joining. We look forward to keeping you apprised of our continued progress on growth initiatives, and we look forward to hosting you at our Investor Day in the early part of the year. Happy holidays, everybody. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.