Dave and Busters 2Q17 Earnings Call Notes

Steve King

Reopened our stores in Houston

“I would like to express our deepest sympathy and concern for those affected by Hurricane Harvey. We want you to know that you are in our thoughts and prayers. We’re fortunate to have reopened our three stores in Houston last Friday and most of our employees are back at work.”

Hurricanes have been a tailwind historically

“I think the bigger issue quite honestly is that it’ll be more about how those communities are able to recover or whether people are going out and dining and going to entertainment plans and that sort of things, more so than it is kind of whether or not we’re prepared to handle the traffic. And I think just about everybody has said that each — one of these storms is unique. Houston is going to be, I believe unique in terms of house recovery at first. I would also say one last thing, over my career, hurricanes in the intermediate term have typically been a tailwind, but not in the short-term.”

Mentioned competitor main event and top golf

“We were probably a little bit surprised on the high side on how many units Main Event opened in the quarter. They opened five units, four of which were in our markets and two Topgolfs, both of which were in our market. So that headwind was a little more than I think we were expecting. It does look to us as that Main Event may be slowing down in the back half, but we don’t run those companies and it’s a little difficult to say. I do think from a cannibalization standpoint, we’re trying our best to think through kind of a good balance of new markets versus existing markets, so that we are not oversaturated with opening stores in existing markets. B”

Mall comps lower than system average

“mall stores represent about a third of our store base. And I think we’ve said it on couple of calls that have historically outperformed in terms of AUV and comp compared to the some average. However, after a pretty long period of outperformance, the first half of this year, mall comps were slightly lower than the system average. They’re still outperforming on a two-year and three-year stack basis. So, it’s little unclear to us whether this is just a tougher rollover or it’s something more substantive, but that’s what our data shows at this point.”

Big fights are not necessarily attractive economically

“First of all, Mayweather and McGregor greater happened in the third quarter. So, we are typically not commenting on that. But I’ll comment in general on that because we have seen a couple of those big kind of mega fights in the past. And I would say that in general, they are pretty expensive for us to put on in every store. And if they are happening in a timeframe where we are pretty busy anyway, so getting enough incremental to offset the cost is a pretty tough proposition for us. We remain committed to becoming and building awareness on our D&B sport. And so, we think it’s important for us to carry things like McGregor, Mayweather and how we covered in Mayweather, Pacquiao and all the rest of that. But it is hard on a Saturday night to be able to boost sales enough to make the economics of that overly attractive for us.”

Brian Jenkins

Increase in family mix leads to lower beverage comps

“And we think part of it is the family, I think question came up earlier. Part of that is driven by increase in family mix, which obviously has less penetration around alcoholic beverages and we think also food. That said, they are coming in to playing the games, games are driving — Amusement is still driving positive comps for us, but there is less propensity to buy food and bev. And it is — food and bev down across all day parts. So, it’s not just lunch and afternoon.

Dave and Busters 1Q17 Earnings Call Notes

Stephen King

We’re seeing a lot of real estate from retailers who are closing stores, but more often than not they are located places we don’t want to go

“So we pick the trade area that we want to go to first and we can try to narrow it down to a relatively narrow target within the trade area and then optimize for whatever the best real estate deal is within that trade area. I think that we are continuing to see a lot of flow in terms of things that are being shown to us, if you will, from the fact that Sears, Macy’s, JCPenney, Sports Authority, all these guys are putting space, if you will, on the market. But they don’t always lineup with where we want to go. And more often than not, where they want to – or where they have availability is where specifically we don’t want to go.

Dave and Buster’s 4Q16 Earnings Call Notes

Brian Jenkins

Getting a little bit of moderation in wage rate

“We do anticipate labor to move to the negative side next year. So it’s a pressure point to our P&L moving into 2017, largely on the heels of wage rate. That said, we expect wage rates to moderate a little bit, we were near 5% this year for the full year, California, New York, are the two states that we expect to have less pressure in, because we’re not seeing the same kind of minimum wage increase. New York had a 50% increase last year and California right about half as much as last year. So we’re getting a little bit of moderation on the wage rate in our view. But we still think it’s going to be a pressure point above what we’ve seen in the history of this company, so it’s going to be a pressure point.”

Any regional differences mainly from weather

“First of all, there are regional differences. Most of the regional differences tend to get driven for us at this point by. Weather, although I think we called out on our last call that the ones that were not particularly subject to weather like California and Florida were doing well for us. More specifically than that, we haven’t had a lot — Texas was very close to the average in the third quarter, it fell off quite a bit actually in the fourth quarter and was a negative for the quarter.”

Dave and Busters FY 2Q16 Earnings Call Notes

Dave & Buster’s (PLAY) CEO Stephen King on Q2 2016 Results

Slowing of casual dining industry weighed on results

“You may recall that we called out cannibalization, competitive intrusion, and economic pressures related to the oil industry during the first quarter and these considerations continued into the second quarter as well. However, the macroeconomic environment and especially the casual dining industry also slowed relative to the first quarter and that also weighed our results.”

Planning on 10-11 openings per year

“As Brian mentioned, we have previously guided 9 to 10 openings, this year we’re now raising those expectations to between 10 and 11 openings. Of these 11 stores, 4 to 5 of those store openings are in markets, where we already have brand presence, and up to 6 store openings will be in new markets for Dave & Buster’s.”

Oil oriented geographies pressured still

“I mean, malls were actually better than the average. So that’s not a drag for us. And then I don’t know that we have exactly divided out Texas per se, but our oil oriented stores still remain under pressure, Oklahoma and Texas somewhat relative to remainder of the stores or the balance of the stores. Some of that once again is because of the fact that we did open a number of stores in Texas during the end of 2015 that are having an impact there as well.”

Labor inflation running above 2%

“I think given the wage pressure, it’s probably slightly above the 2%. I mean, I think in the long-term, we said that we need about 2% in order to begin the leverage margins it’s probably slightly above that in light of some of the margin pressure we’re seeing on labor. I mean, labor is — as Brian mentioned, we’re anticipating between 4% and 4.5% in the second half within that range also in the first half. So it’s a little more and without having kind of that fuel of e-ticket as well as some reduced reduction in cost of sales on the food side, the margin side gets a little harder.”

Dave and Busters 1Q16 Earnings Call Notes

Dave & Buster’s (PLAY) CEO Stephen King on Q1 2016 Results

17% Revenue Growth

I am especially excited by our 17.7% revenue growth, demonstrating that our newer stores are adding significantly to the top line, enabling us to continue to leverage our margins and grow the bottom line at an even faster rate.
While comparable store sales decelerated relative to last year’s fourth quarter as we had anticipated, total revenue growth accelerated because of the sales generated from newer stores.

Did see some softness in Texas

Like many others we did experience softness in Texas where we have seven comp stores representing about 10% of our comp store base. We attribute the softness to the impact of cannibalization as three of our 2015 new stores demonstrate some competitive intrusion along with economic pressures related to the oil industry.

There’s a lot of real estate becoming available thanks to struggling retailers

Given what’s going on with some of the department store brands and big box retailers, there is a lot of real estate becoming available in markets to meet our criteria. And while others are having challenges at their mall locations, our mall stores are performing quite well.
So as landlords and developers pivot towards more entertainment options versus traditional fashion retail and mall, we are in a good position to capitalize on these opportunities.

VR has been a cool novelty, but people don’t tend to play it over and over

as it relates to VR, we have tested some VR products and I would say that our results are not compelling from an overall revenue growth standpoint at this point. And I don’t think that means we are going to give up on VR. I still think there is something to it and there is a probably a way for us to roll that in a way that we will create some significant, either attraction for us or in a potentially meaningful increase in revenue. But I think that what we have seen so far is that the content is such that people are likely to do it a single time and then not repeat, which makes it more difficult for — so it has some novelty value, I guess is one way to think about it. And so people are willing to try it but they don’t tend to play it over and over.

Brian Jenkins

Macro environment is volatile

That said, the overall macro environment is rather volatile and these company specific factors may not prove sufficient to sustain comp store sales at the higher end of our new range.

Dave and Buster’s 4Q15 Earnings Call Notes

Steve King

There is a lot of real estate our size coming on line

“There is a lot of sites available right now especially for our size. And I think that they changes, there are things like kind of sears coming online and saying they are going dispose a 100 stores and while we may not want to go every sears, there is probably of handful sears that would make chance for us to take a portion of and subdivide, you know they are huge spaces so we won’t be able to take the whole thing but us in conjunction with few other retailers or entertainment facilities might be willing to take down some of that, some Macy’s have come online, sports authority declared bankruptcy, so there is a lot of real estate coming online in our size.”

Malls are not dead, just pivoting towards entertainment

“The only other thing I will say malls are not dead. Actually our mall stores are performing well. And we get that question periodically but the mall stores are performing well. So I think that mall developers are pivoting towards a bit more entertainment as they are going after trying to replace these folks and so we are an attractive alternative for them.”

Brian Jenkins

Expecting 3-4% wage inflation

“We experienced wage inflation of approximately 3% during the fourth quarter, primarily due to the higher minimum wage rates in both California and New York. As we look ahead we are projecting wage inflation of approximately 3% to 4% in 2016 which is higher than the 2.5% experienced in 2015.”

Wouldn’t say that Texas has improved

“Yes. Just on the Texas question. We don’t typically make a practice to talking about states and geographies that much there has been so many questions around the state of Texas and impact of oil and gas in that part of the country. And we felt like we wanted to talk about it little bit here today and reality was in our fourth quarter we were positive. It was not 6% positive, it was a trail the overall change but it was still nose let’s say. I would not say that trend has improved. Part of the situation in Texas for us that make a little hard to read whether its oil or something else. We opened three stores in our 2015 class in three of our markets in the state of Texas. One in St. Antonio, one in Houston and one in Dallas. So we know we are impacting our sales a little bit as well as oil and gas but I would not say we’ve seen it improved.”

Miscellaneous Earnings Call Notes 12.11.15

Universal Health Services (UHS) Presents at Bank of America Merrill Lynch 2015 Leveraged Finance Brokers Conference

Steve Filton

Behavioral health business is more recession resistant

“if you’re seeking — and you’re seeking acute care treatment, you need a hip implant or you need some sort of ENT surgery et cetera, you may think about the economics of that; you may choose to postpone that because you don’t want to come out of pocket for a co-pay or deductable or because you don’t want to be out of work frankly during a tough economic climate. But if you try to commit suicide or you overdose on drugs and alcohol, you are not going to be in a position to decide whether you should or shouldn’t be admitted to the hospital. That decision is really being made generally by somebody else who is effectively economically insensitive to what your economics of the situation or concerns might be. So, I think that’s another reason why the behavioral business has generally proved to be more, I’ll call it, recession resistant.”

Optimum occupancy in behavioral care is in the low to mid 70s

“occupancy rates and our behavioral facility peaks in the mid 80s, right around 84% in about 2005-2006. What we started to do at that point because we have a view probably the ideal occupancy rate in this business is somewhere in the low to mid 70s. And so, when we were at 85% in about 10 years ago, we’re turning away a lot of patients at that point because obviously if we’re averaging 85%, it means that there’s a lot of days when we’re at 90 and 95 and even a 100% occupancy. It also means that because of some of the constraints that we have, we have put male and female patients; we don’t put adults and children together, we don’t certain diagnoses together. So, as a consequence, it’s difficult for facilities to really run at something close to full occupancy.”

Silicon Laboratories Presents at Credit Suisse Technology, Media & Telecom Conference

Tyson Tuttle

Low power for IoT requires innovation

“if you look at the energy efficiency that’s required. If you’re handset only has 10% battery life left, and I know that when mind says 10% battery life, I’m like looking for a charger. But if you imagine that amount of power needs to power an IoT device for five years. So that’s essentially the amount of energy that’s in the little coin cell and they want that device to sense the environment. Let’s say every few minutes it needs to communicate that when something happens. This type of energy consumption requires a lot of innovation. And if so this is what we are focused on doing.”

From a macro perspective, wireless markets suffering but infrastructure business doing well

“I think a lot of people that we are selling into wireless were suffering, especially in China, we were not exposed to that at least on our infrastructure business, we had a little bit of exposure on the microcontroller side and some of the optical modules that did hold back our growth in IoT in the second half. But on infrastructure we see that it’s pretty solid globally. And this is more of a reflection of core network in data center roll outs.”

Barnes & Noble’s (BKS) CEO Ronald Boire on Q2 2016 Results

Have seen increased traffic so far in Q3

“the challenges were greater than anticipated and reduced traffic as well as conversion. During the second quarter, we implemented a significant number of website fixes to increase traffic, improve the overall user experience and stabilize the site. So far during Q3, we have seen increased traffic and have stabilized the site for the holiday season. We plan to implement additional improvements after the holiday season to further upgrade the overall user experience.”

The Cooper Companies’ (COO) CEO Bob Weiss on Q4 2015 Results

Had a bumpy ride from mid September through the end of November

“August was a good month and things dropped off in October a lot, particularly in the U.S. and some of the problems we ran into in Europe exacerbated the most. We thought we’re in pretty good shape in early September, found out we weren’t in as good shape as we thought by mid-September and had a bumpy ride with our integration if you will in Europe, from mid September until pretty much the end of November. Having said that, we had what we call a very respectable November”

Toronto-Dominion Bank’s (TD) CEO Bharat Masrani On Q4 2015 Results

Mark Chauvin

Are starting to see stress in consumer credit portfolios in energy-impacted provinces, but within expectations

“Next, with respect to our oil and gas exposure, we were not surprised by the level of impaired loan formations this quarter. Ongoing analysis indicates that the oil and gas nonretail credit portfolio continues to perform within expectations, given the current level in near-term outlook for commodity prices in this sector. We are beginning to see signs of deterioration in the oil impacted provinces consumer credit portfolios, which again are well within our earlier expectations. Based on ongoing stress tests conducted against the credit portfolios, I remain comfortable that the potential impact of low energy prices on the bank’s credit losses remains well within the range of a 5% to 10% increase over 2015 levels.”

Seeing a gradual increase in delinquency rates over last 4-5 months in oil impacted provinces

“we have been watching it very closely, especially the impacted provinces, which would be Alberta, Saskatchewan and Newfoundland. And what we are seeing in two categories, being the indirect auto but the non-prime segment primarily and then in the card segment, we have seen a gradual increase in delinquency rates over the last four or five months.”

Customers affected are early indicator, the type of customer that would be more challenged than the typical customer

“So in many respects we look at that as an early indicator because that would be the customer that maybe would be more challenged than the typical customer. Now, I would stress that these two categories are less than 1% of our total book and that we expected to see losses of this level.”

Sprint’s (S) Management Presents at Bank of America Merrill Lynch Leveraged Finance Brokers Conference

Tarek Robbiati — CFO

Wireless data is much cheaper in some other markets than the US

” I think the – look at the U.S. wireless market, it’s the biggest one in the world by value. And the reason why it is the biggest one in the world by value is because we have 300 million people and you have a very, very high ARPU…when you really look at some of their – the size of their bills, it’s quite extraordinary. I mean you compare this with Hong Kong which is a market that I am very familiar with. In Hong Kong you can get very, very decent data packages on 4G networks for less than $5 postpaid, which is quite extraordinary.”

Comcast’s (CMCSA) Management Presents at UBS Global Media and Communications Conference

Mike Cavanagh–CFO

No new comments on wireless plans. We believe the cheapest way to transmit data is to get it to the hardwire as soon as possible

“we have no news on this topic today. What we have decided is that it’s certainly worth at this point triggering the MVNOs that we can work on exploring what kind of offering we could bring and go deeper to learn and experiment. That’s the state of play on the MVNO. And that sits in the context of having been big believers in WiFi. So, you have seen us invest in and continue to invest in the WiFi as an extension of the value of the broadband pipe, which is still the kind of best and cheapest way to transmit data we believe is to get it to the hardwire as soon as possible. So, with the progress we have made on our WiFi product and broadband, we think it makes complete sense to be exploring on – what possibilities the MVNO offering has to add value to our customer relationships. That’s as much as we know. There is no – it will take time to draw any conclusions from what we are now going through.”

Vail Resorts’ (MTN) CEO Robert Katz on Q1 2016 Results

Our labor markets are tight

“think ensuring that we have enough, ensuring that we are providing the right employee experience, attracting enough of the right labor, retaining labor and then a part of that is obviously being able to have housing for everyone that works here, I think it is probably our number one concern right now in terms of ensuring that we can continue to drive success. And so, I mean that’s led us over the last couple of years to continue to invest to make sure that we can do that. I’d say where we feel right now is that our markets are tight. We think it is a challenge.’

Upper income US remained strong

“Colorado in particular is the strong market, continues to be a strong market given the economy here, Utah, the Bay Area and California so that obviously is the big help right there but then I would say we are seeing pretty broad based strength from all of our major destinations across the United States, I would say even places like Los Angeles, like Seattle which are not typically our strongest markets in terms of size, we’re seeing real strength there too”…

“I would say right now I think the domestic, the U.S. economy on the domestic side is very strong, the upper income portion of that remained strong ‘

AutoZone’s (AZO) CEO Bill Rhodes on Q1 2016 Results

DIY auto spending has benefitted from lower gas prices

“I think clearly we are seeing some industry strength currently. I think a part of that has to do with what’s going on with gas prices. And while gas prices initially went down, you didn’t see the initial correlation with miles driven increasing. But in more recent months, starting really strong in this summer, and continuing through September, the latest date that we have available, it’s showing nice strength. Over long periods of time we’ve seen that has a nice correlation with our DIY industry growth.”

Cisco Systems (CSCO) Presents at Barclays Global Technology Brokers Conference

Hilton Romanski

Customers are looking for a hybrid cloud

“what we’re hearing from customers fundamentally is that they want to see the benefits and the economics of public cloud in their private cloud environment. So that would suggest to us that ultimately there is a hybrid cloud solution out there for enterprises where some of those benefits across multiple types of workloads across their own environments that are private as well as those that are being hosted in a public cloud is going to co-exist.”

Dave & Buster’s (PLAY) CEO Steve King on Q3 2015 Results

Couldn’t be happier with how 2015 is shaping up

“we couldn’t be happier in terms of how 2015 is shaping up, while we’ve achieved so far as we look forward to a strong finish in the fourth quarter.”

Halliburton’s (HAL) Management Presents at Wells Fargo 2015 Energy Symposium Brokers Conference

Christian Garcia — Interim CFO

North America looks like it could be marginally better than expected, but international looks marginally worse

“North America does look like it’s going to be marginally better than what we said in the third quarter call and international looks like it’s marginally worse and in total, we’re in line with our expectations as we left the third quarter.”

2016 is clearly going to be another down year but we don’t know the magnitude yet

“2016 is still opaque. E&P the E&Ps have not announced their budgets, but clearly it’s going to be another down year. The question is the magnitude of the decline.”

Argentina had elections that could lead to positive economic reforms

“Argentina just had elections and we think that new president elect will usher in a new era of economic reforms achieved among that would be probably a potential depreciation of their over valid currency which will in the short term provide some little need to some dislocations but I think in the long term would be actually help that economy boot that economy and would invite for investors.'”

HCA’s Management Presents at Opperheimer 26th Annual Healthcare Broker Conference

Bill Rutherford, Chief Financial Officer

Seeing higher turnover of nurses as demand for nurses strong

“We think you know we are seeing higher turnover of recently than we’ve historically had. And we think there is a lot of other supply in the marketplace and demand for nurses. We’ve got a host of efforts around recruiting. We talked about on our call our efforts to hire nurse graduates and putting them in orientation and onboarding them a little bit differently so that they have — the retention is longer for those new nurses.”

See continued strong economies in the majority of our markets

“We see continued strong economies in the majority of our markets and I think that provides really fundamental momentum for the company and those trends don’t appear quickly, nor do they disappear quickly. So, we are optimistic that our market trends, we are seeing has some durability to it in the future.”

Comerica’s (CMA) CEO Ralph Babb on Goldman Sachs U.S. Financial Services Brokers Conference

Energy reserves at 3% of total energy related loans

“if prices remain low for longer, we expect to see continued negative credit migration and losses to emerge yet we believe they will be manageable. We have increased our reserves for energy loans in each of the past four quarters, as a result of an increase in criticized loans and sustained low energy prices. Because investors have been particularly interested in the size of our energy reserve allocation note that at the end of the third quarter, we had reserves amounting to more than 3% of our total energy and energy related loans.”

U.S. Bancorp (USB) Presents at Goldman Sachs US Financial Services Brokers Conference

CFO, Kathy Rogers

Planning for three interest rate increases in the next 12 months including next week

“as we look out into 2016, I do think that we are seeing an economic environment that is somewhat similar to what we saw this year, may be slightly improved. As we think about the interest environment, we are projecting in our plan, a potential for two interest rate hikes next year, and then December 1 of this year; so a total of three if you look out over the course of the next 12 months.”

Not seeing any deterioration of credit outside of energy

“the simple answer is no. We’re really not. Outside of energy, it’s really relatively benign, no significant change.”

We’ve probably gotten to a point where reserves will start building again (but not necessarily because of credit deterioration)

“I think one of the things that you’re going to see is that we are getting to that point in the cycle where many banks, including ourselves, have enjoyed a nice outcome of reserve releases. And I do think we’re coming to the end of the cycle. And I think that you’ll start to see reserves starting to build as we move out into later quarters.”

Lululemon Athletica’s (LULU) Laurent Potdevin on Q3 2015 Results

Start of Q4 has been mixed

“In line with macroeconomic trends, the start of Q4 has been mixed. We saw lower traffic in the final weeks of Q3 and into the first couple of weeks of Q4, with steady improvement in Thanksgiving. Given the current environment, we’re taking a conservative stance with revenue in Q4, while taking the necessary actions to manage inventory and control expenses.”

Moody (MCO) Barclays Global Technology, Media and Telecommunications Conference

Mark Almeida, who is the Head of the Moody’s Analytics Business

November was a good month from an issuance standpoint and December has gotten off to a strong start as well

“November was a good month from an issuance standpoint, and December has gotten off to a pretty good start as well. So I think things have firmed up a bit, since some of the weakness that we saw in the summer time.”

Korn-Ferry’s (KFY) CEO Gary Burnison on Q2 2016 Results

Even in a digital world, it still pays to have people housed in the same location

“I think that creating connectivity of people and clients in an environment of collaboration is incredibly important and although we live in a virtual world, I fundamentally believe that the people need, to the extent possible, need to be housed in the same location.”

Gregg Kvochak

“global demand for our Executive Recruitment services remained strong in the second quarter.”

McGraw-Hill Companies’ (MHFI) CEO Doug Peterson Presents at Goldman Sachs U.S. Financial Services Conference

Issuance is down 30% year to date

“we’ve seen a choppier market, issuance is down during the quarter and year to date overall issuance is down globally about 28% and in the quarter its down again over 30%, 35%, 37%, depending on which element of the markets that you look at. So we’ve seen some volatility in the ratings business.”

Avnet (AVT) Presents at Raymond James Technology & Communications Investors Brokers Conference

Kevin Moriarty, CFO

Our product is service

“Avnet’s product is, our product is service, has been and always will be. Models change the way we get compensated for that service. We need to continue to be nimble and agile to be able to move with that”

We feel pretty good about the environment

“I would characterize the current lead times as stable, short. We haven’t really seen any significant changes in push outs, cancelation rates. So we feel pretty good. EM, we continue to experience growth within our European business. I would characterize the Americas as sluggish overall on the component side.”

ConocoPhillips’s (COP) CEO Ryan Lance on 2016 Capital Budget and Operating Plan

We see dividend as highest priority

“Despite the tough market, our dividend remains the highest priority use of our cash. We view the dividend level as a long-term decision. And we’ve been in the current low price cycle for relatively short period of time”

Capital budget down ~25% from last year, -54% from 2014

“We’re announcing a 2016 capital budget of $7.7 billion that’s $2.5 billion lower than 2015 capital guidance and more than $9 billion lower versus 2014. In setting our budget, we’re flexing capital down appropriately for the price environment without losing opportunities or sacrificing the safety or integrity of our operations.”

Dave and Busters 1Q15 Earnings Call Notes

Mayweather Pacquiao didn’t impact results

“Note that while we feature the Mayweather/Pacquiao boxing match on May 2nd across nearly all stores. It did not have a significant impact on our business, despite that we think that the investment in this content was important as a brand building mechanism that helps solidify our position as the premier place to watch destinations viewing sports.”

Seeing pressure in beef and poultry

“we were seeing pressure on beef and poultry and those are really the two really significant areas that are driving us to that 4% to 5% range of pressures we expect there. We do expect they need to increase to be less so in the back half of year we’ll start to rollover a little bit higher pricing in the back part of the year, but first part most of the pressure is coming from meat and poultry at this point, improved situation on the seafood side and on oils and dressings but all in all it’s a net increase year-over-year.”

Nothing negative in Texas

” as it relates to Houston and Texas, specifically, we just pulled some analysis again last week and we’re just not seeing anything, whether it because of oil or rain or whatnot that’s negatively impacting Texas at this point.”

Have taken a little more pricing this year

“Yes, I mean we took a little more pricing this year. In the first quarter our effective tax — effective price increased on food is about 2.9% and that’s the culmination of really three increases that we did an increase in February and then we have some increases that are working for us from the prior year. I think we’re going to probably be, for the full year net 2.5% to 3%, we had indicated because we see this pressure on the commodity side that we’re going to probably be a little more aggressive than typically what’s been about 2% on food for us and we’ll probably shooting for closer to 2.5 to 3 for the full year on the food side.”

Dave Busters 4Q14 Earnings Call Notes

8 new stores opened

“We completed 2014 with a total of eight new store openings. This included three stores opened during the fourth quarter in Albuquerque, New Mexico, Clackamas which is a suburb of Portland, Oregon, and Greenville, South Carolina. All three are new markets and new states for Dave & Buster’s. Collectively, our entire 2014 class is performing extremely well and ahead of our expectations.”

16 new leases

“In addition to the five stores under construction, we have a well-developed real estate pipeline as an additional 16 signed leases that continues to build and provides us with great visibility over the next several years. And as we’ve done in our prior process, we will tailor our store size to the surrounding population size and other criteria, including daytime traffic, number of businesses, proximity to nationally recognized anchored tenants that have a regional draw. However, over the next couple of years, we anticipate being more heavily weighted towards those larger stores.”

Beef and chicken prices are still high

“So we are seeing some benefit in those areas that you just mentioned, but the big culprit for us right now is beef, followed by chicken. So we’re not seeing moderation in the price of that. And I think a little bit of chicken is just because beef gives them some cover to keep prices higher than you would think they might be given the input costs, which in some measure are driven by fuel prices and some of that, should be dropping. So, but we’re just not seeing it yet in the pricing.”

You can change the menu a little but not too much when it comes to chicken and beef

“I mean we do have some ability to manage that, Andy. I mean in the past when we — when, like for example, last year, shrimp really spiked high, we did some things to try to moderate our usage on shrimp. But in terms of that, we are subject to that, what the guest is buying, we have a very broad menu, beef and chicken are popular, it’s not like we’re going to be able to take those off.”

Not overly concerned with healthcare cost increase in 2015

“we think we have absorbed some of the healthcare cost increase. We expect a little bit of an increase year over year this year. Obviously new stores are going to cause the number to move up some, but we’re not overly concerned about the healthcare benefit increase for next year, for 2015.”

Err on the side of building a store too large

” I would also say that if there is a store that’s on the cusp, we are erring on the side of building a larger store as opposed to a smaller store. ”

No impact in Texas from lower oil prices

“so far so good. We’re seeing very low impact. And again we’re in, primarily in Texas, in the bigger markets, so we’re in more towards in Dallas, we’re in also Austin, San Antonio, two stores in Houston, but we’re just really not seeing very much impact at all to anything going up from an oil patch standpoint, despite some of the layoffs and whatnot in Houston. So, so far so good is our outlook.”