Financial Data and Key Metrics Changes - The company reported revenue growth of 12.8% for Q3 2025, driven by a 5.5% increase in average weekly sales and 6.8% store week growth [13] - Diluted earnings per share decreased by 0.8% to $1.25 [13] - Restaurant margin dollars increased by 1.1% to $204 million, while restaurant margin as a percentage of total sales decreased by 168 basis points year-over-year to 14.3% [15][16] Business Line Data and Key Metrics Changes - Texas Roadhouse averaged nearly $162,000 in weekly sales, Bubba's 33 averaged $119,000, and Jaggers averaged over $75,000 [10] - Comparable sales increased by 6.1% in Q3, with traffic growth of 4.3% and an average check increase of 1.8% [13] - The to-go business represented approximately 13.6% of total weekly sales, averaging $21,500 [13] Market Data and Key Metrics Changes - The company opened seven company-owned locations in Q3, including two Bubba's 33 and one Jaggers, and plans to open approximately 30 restaurants across three brands in 2025 [5][6] - Franchise partners opened two international Texas Roadhouse restaurants during Q3 and plan to open ten new restaurants in total, including six international locations [6] Company Strategy and Development Direction - The company aims to maintain a people-first focus, operational excellence, and a strong value proposition to drive long-term success [4] - The company is on track to open approximately 35 company-owned restaurants in 2026, including 20 Texas Roadhouse, 10 Bubba's 33, and five Jaggers [6] - The company continues to invest in technology, with 95% of restaurants using a digital kitchen and upgraded guest management systems [8] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior remains strong, with no noticeable change in guest behavior following a 1.7% menu price increase [6] - The company expects commodity inflation to be approximately 6% for 2025 and 7% for 2026, with significant volatility in beef prices anticipated [10][11] - Management remains optimistic about maintaining top-line growth through guest traffic and restaurant expansion despite inflationary pressures [8][9] Other Important Information - The company ended Q3 with a cash balance of $108 million and cash flow from operations of $144 million, offset by $214 million in capital expenditures, dividend payments, and share repurchases [11] - The company is prioritizing new store development and maintaining existing restaurants, with capital expenditure guidance set at approximately $400 million for 2026 [12] Q&A Session Summary Question: Outlook for beef inflation and beverage program - Management indicated that beef inflation is expected to be in the mid-teens, with a focus on mocktails and beverage offerings to cater to changing consumer preferences [21][26] Question: Confidence in beef inflation being transitory - Management believes the current beef inflation is cyclical and transitory, based on industry insights and purchasing department evaluations [32][34] Question: Consumer trends by income and age cohort - Management noted no significant differences in consumer behavior by income or age cohort, attributing strong traffic growth to the value offered [36][38] Question: Pricing philosophy and impact on compensation - Management emphasized a conservative pricing approach to protect top-line growth and manage partner compensation effectively [44][46] Question: Restaurant profit dollars and inflation management - Management acknowledged the decline in restaurant profit dollars per location but remains confident in long-term growth strategies [52][56] Question: New customer acquisition and competition - Management believes they are attracting customers from various segments, including higher-end steakhouses and QSRs, due to their quality offerings and restaurant experience [60][61] Question: Franchise acquisitions and CapEx balance - Management confirmed ongoing conversations for franchise acquisitions and explained that capital expenditures remain stable despite increased openings due to efficiency [71][74]

Core Insights - Dave & Buster's reported lower-than-expected Q2 fiscal 2025 results, with both earnings and revenues missing estimates, leading to a decline in share price by approximately 6.8% since the last earnings report [1][3][6] Financial Performance - Adjusted EPS for Q2 was 40 cents, missing the Zacks Consensus Estimate of 88 cents, and down from $1.12 in the same quarter last year [6] - Quarterly revenues totaled $557.4 million, slightly up by 0.5% year-over-year but below the consensus mark of $562 million [6] - Food and Beverage revenues increased by 6.3% year-over-year to $192.9 million, while Entertainment revenues fell by 3% to $364.5 million [7] - Comparable store sales declined by 3% year-over-year, with similar trends expected to continue into the third quarter [8] Operational Highlights - Operating income for Q2 was $53 million, down from $84.5 million in the prior year, with adjusted EBITDA at $129.8 million compared to $151.6 million last year [9] - EBITDA margin decreased to 23.3% from 27.2% in the previous year [9] Balance Sheet and Liquidity - As of August 5, 2025, cash and cash equivalents were $12 million, an increase from $6.9 million in February 2025 [10] - Net long-term debt rose to approximately $1.55 billion from $1.48 billion at the end of fiscal 2024, with available liquidity of $443.3 million [11] Growth Initiatives - The company opened three new domestic stores during Q2 and continued its international expansion with a second franchise store in India, planning to open at least five more international franchise stores in the next six months [12][13] Market Sentiment and Estimates - Estimates for the company have trended downward, with a significant revision of -38.37% in consensus estimates [14] - The company currently holds a Zacks Rank of 5 (Strong Sell), indicating expectations of below-average returns in the coming months [16]

Core Insights - Dave & Buster's Entertainment, Inc. reported lower-than-expected second-quarter fiscal 2025 results, with earnings and revenues missing the Zacks Consensus Estimate, leading to a 16.6% drop in shares during after-hours trading [1][4][9] Financial Performance - Adjusted earnings per share (EPS) for the fiscal second quarter were 40 cents, missing the consensus estimate of 88 cents and down from $1.12 in the prior year [4][9] - Quarterly revenues totaled $557.4 million, slightly up 0.5% year-over-year but below the consensus mark of $562 million [4][9] - Operating income was $53 million, down from $84.5 million in the year-ago quarter, with adjusted EBITDA at $129.8 million compared to $151.6 million previously [7][9] Revenue Breakdown - Food and Beverage revenues, accounting for 34.6% of total revenues, increased 6.3% year-over-year to $192.9 million, exceeding estimates [5] - Entertainment revenues, making up 65.4% of total revenues, fell 3% year-over-year to $364.5 million, missing estimates [5] Comparable Store Sales - Comparable store sales, including Main Event-branded locations, declined 3% year-over-year, with sales trends in the third quarter following the same direction as the second quarter [6] Management Outlook - Management expressed confidence in the company's long-term potential despite the fiscal second-quarter results, highlighting profitable business models and expected high returns from new store openings [2][3] - Targeted initiatives such as menu innovation, new arcade titles, and remodel programs are showing early progress, with management cautiously optimistic about stabilizing performance and driving long-term shareholder value [3] Store Development - During the fiscal second quarter, the company opened three new domestic stores and one additional store post-quarter, along with two Main Event stores [10] - The company launched its second franchise store in India and plans to open at least five more international franchise stores within the next six months [11] Balance Sheet - As of August 5, 2025, cash and cash equivalents were $12 million, up from $6.9 million in February 2025, while net long-term debt increased to approximately $1.55 billion [8]