Dave & Buster's Entertainment Inc (PLAY) 2017 Q1 法說會逐字稿

Good day, and welcome to the Dave & Buster's Inc.

First Quarter 2017 Earnings Conference Call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Jay Tobin, General Counsel.

Please go ahead, sir.

Thank you, Noah, and thank you for joining us.

On the call today are Steve King, Chief Executive Officer; and Brian Jenkins, Chief Financial Officer.

After comments from Mr. King and Mr. Jenkins, we will be happy to take your questions.

This call is being recorded on behalf of Dave and Buster's Entertainment Inc.

and is copyrighted.

Before we begin our discussion of the company's results, I'd like to call your attention to the fact that in our remarks and our responses to your questions, certain items may be discussed which are not based entirely on historical facts.

Any such items should be considered forward-looking statements and 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 has been published in our filings with the SEC which are available on our website at daveandbusters.com under the Investor Relations section.

In addition, our remarks today will include references to EBITDA, adjusted EBITDA and store operating income before depreciation and amortization which are 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 results contained in our earnings announcement released this afternoon which is also available on our website.

Now I'll turn the call over to Steve King.

Thank you, Jay, and good afternoon, everyone.

We appreciate your participation in our quarterly conference call and your continued interest in Dave & Buster's.

Today, I'll review the quarterly highlights and provide an update on our current initiatives and plans.

Brian will walk us through the key financial highlights, our increased 2017 guidance and our new $100 million share repurchase program.

Then I will discuss our development and remodeling efforts before we open it up to your questions.

We're off to a great start in fiscal 2017 and are pleased to be raising our annual outlook.

Dave & Buster's differentiated experience across our 4 platforms of Eat, Drink, Play and Watch continues to resonate with our guests.

We grew total revenue more than 16% and EBITDA by more than 22% during the first quarter of 2017, demonstrating good operating leverage.

Once again, we delivered very strong comparable store sales growth of 2.2% led by Amusement comps of 6.4% during the quarter, in line with our full year guidance.

This was our 20th consecutive quarter of outperformance relative to Knapp-Track.

Our non-comp store performance remained strong as well and we're pleased with our 2017 store openings to date.

Of the 96 stores we opened -- we operated during the first quarter, 20 stores or 21% of the total were non-comp stores.

Their strong performance and contribution to our overall revenue growth demonstrates the broad appeal of our brand, as we work towards building out our North American store potential of over 200 stores.

The first quarter tends to be volatile for us.

This year, once again, we experienced significant week-to-week sales volatility due to many factors, including delays in tax refunds, the shift in Valentine's Day, Easter and spring breaks, as well as the impact of weather.

Fortunately, these factors were all within our quarter and we believe, on a combined basis, did not have a material impact on us.

From a regional standpoint, our Texas stores rebounded nicely and delivered comps above the system average for the first time in quite a while.

On the heels of a very successful 2016, this year is shaping up to be another exciting year for the Amusement segment of our business.

During the early part of the first quarter this year, we introduced 2 Zombie-themed games including Zombie Snatcher and The Walking Dead, both of which are performing extremely well for us.

In addition, we recently launched a game based on the Pirates of the Caribbean license.

Our upcoming Summer of Games lineup includes highly recognized marketable content which we plan to unveil gradually, as we promote those games over the course of the next several months.

For example just this week, we launched a proprietary game based on the Spider-Man license and we believe the game will resonate well with our guests.

Meanwhile after a somewhat rocky start, the uptime for our proprietary title Rock'Em Sock'Em Robots continues to improve and the game remains extremely popular.

With our new and compelling content including games based on some of the world's best-known movie properties, the year will underscore further -- the further evolution of our Amusement strategy, as we continue to collaborate with our many game manufacturing partners to deliver our strategy.

From a food standpoint, we introduced several new items including 2 shareable appetizers with additional sandwich and burger options as well as a crispy Nashville-style hot chicken.

With our beverage lineup, we added 3 new on-trend flavors to our signature Smashtails platform of whiskey-based cocktails.

Menu innovation remains a hallmark of our brands, particularly in a more challenging casual dining environment.

We recently introduced 4 new signature rum-based punches served with a giveaway sea monster figures.

This monster isle punch platform, as we call it, has quickly become popular with our guests and is performing extremely well for us.

Amusements continues to be our focus, from a promotional standpoint, and continues to be our strongest sales channel.

Once guests are in our stores, we want to sell them the complete experience including our Food and Beverage offerings.

As we mentioned before, we drive traffic by featuring games as well as great-looking Food and Beverage items on national cable television, typically coupled with an immediate call to action including an element of free gameplay.

As an additional note, the number of weeks of national cable advertising as well as spending during the first quarter was comparable to that of the same period last year.

In terms of our guidance for 2017, broadly speaking, we continue to expect low to mid-teen growth in revenue and EBITDA.

That said, we've increased our guidance, and Brian will elaborate on that change in his prepared remarks.

Now let's hear from Brian who'll provide a more detailed financial update.

Well, thank you, Steve, and good afternoon, everyone.

Before walking through the numbers, I just want to thank our many team members across the country who have made D&B one of the best experiential brands for consumers today.

I also want to congratulate them for helping deliver another record-setting first quarter in terms of sales, net income and EBITDA as we continue to drive significant shareholder value.

Now in terms of the first quarter, total revenues increased more than 16% to $304.1 million.

That's up from $262 million in the prior year due to contributions from newer stores, as well as healthy performance in our comp store base.

Revenues from our 76 comparable stores increased 2.2% to $248.4 million, up from $242.9 million while revenues from our 20 non-comparable stores, including 4 that opened during the quarter, increased to $57 million.

That's up from $20.4 million in the prior year.

Turning to category sales.

The mix shift to our more profitable entertainment business continued as total Amusement and Other sales grew 20.4%, while Food and Beverage collectively increased approximately 10.8%.

During the first quarter, Amusement and Other represented 57.3% of total revenues, reflecting a 200-basis point increase from the prior year period, as we continue to feature and promote the entertainment aspect of our brand.

Now breaking down the 2.2% increase in comp sales, our walk-in sales grew 2.4% while our special events business was up 0.6%.

In terms of category sales, Amusements rose 6.4% while our Food and Bar business was down 2.2% and 4.2%, respectively.

As Steve mentioned, we were also able to extend our outperformance relative to Knapp-Track to 20 consecutive quarters.

On a 2-year stack basis, our comparable store sales growth was 5.8% as we cycled over a healthy prior year comp of 3.6%.

The impact of cannibalization and competition was in line with our expectations.

In terms of cost, total cost of sales was $49 million in the first quarter and, as a percentage of sales, improved 150 basis points, reflecting stable F&B margins, improved Amusement margins and higher Amusement sales mix.

Please note that this quarter included a $2.5 million reduction in Amusement costs resulting from the favorable settlement of a multi-year use tax audit by the State of Texas.

This cost reduction represents the excise use tax on redemption items during the period from mid-2011 through fiscal year-end 2016.

Excluding this settlement, the improvement in overall cost of sales would have been closer to 70 basis points.

Food and Beverage cost, as a percentage of Food and Bev sales, improved approximately 10 basis points compared to last year as we benefited from slight food commodity deflation and approximately 2.5% in food pricing and 1.9% in bev pricing, mostly offset by a change in beverage mix.

We continue to expect a relatively flat commodity environment for full year 2017.

Cost of Amusement, as a percentage of Amusement and Other sales, was 210 basis points lower than last year.

About 150 basis points of that improvement resulted from the previously mentioned use tax settlement, with the balance driven by moderate price increase in our WIN!

merchandise and a slight shift in gameplay towards simulation games.

Total store operating expenses, which includes operating payroll and benefits and other store operating expenses, were $147.6 million.

And as a percentage of revenue, store operating expenses were 48.5% or 30 basis points lower year-over-year.

Our operating payroll and benefit cost was 10 basis points lower year-over-year.

Leverage on incentive comp benefits and higher amusement sales mix was largely offset by hourly wage inflation of about 5% and the typical inefficiency at our non-comp stores.

Our non-comp stores, representing over 20% of our store base, continue to perform well and are generating excellent returns but are not as efficient as our mature comp store base from a labor perspective.

Other store operating expenses were 20 basis points lower year-over-year as we leveraged marketing expenses, in part, due to timing, partially offset by higher occupancy cost at our non-comp stores.

Store operating income before depreciation and amortization was $107.6 million for the quarter, reflecting growth of 22.4% compared to $87.9 million last year.

And as a percentage of sales, this was an increase of 180 basis points year-over-year to 35.4%.

Excluding the favorable use tax settlement, this increase would have still have been about 100 basis points.

G&A expenses were $15 million, up from $13 million in the prior year.

Increased share-based compensation and increased headcount at our corporate headquarters to support our growing store base drove this dollar increase.

As a percentage of revenues, G&A expenses were 10 basis points lower due to leverage on our overall sales growth.

Preopening costs increased to $4.5 million, that's up from $2.9 million in 2016, primarily due to the impact of 1 additional new store opening versus the prior year quarter.

Recall that for a large format store, we typically spend around $1.4 million, and for a small format store, it's around $1 million.

Our EBITDA grew 22.5% to $88.2 million and margins improved roughly 150 basis points, while adjusted EBITDA grew 25% to $95.6 million.

Without the benefit of the use tax settlement, EBITDA would have been $85.6 million, representing growth of 19% and a margin improvement of 70 basis points year-over-year.

Net interest expense for the quarter fell to $1.9 million, that's down from $2.1 million in the prior year driven by reduced average debt levels, partially offset by slightly higher cost of debt due to increases in the underlying LIBOR rate.

Our effective tax rate for the quarter was 31.4% compared to 36.5% in the first quarter of last year.

The decrease in the effective rate reflected a favorable 5.3 percentage point impact from the adoption of a new accounting standard related to share-based payment transactions, which reduced our income tax provision by $3.3 million and increased shares outstanding by 467,000 shares.

As a reminder, the implementation of this new standard does not have any incremental effect on our cash taxes.

However, as we indicated on our last earnings call, it does increase our diluted share count and can significantly reduce our effective book tax rate depending on the magnitude and the timing of stock option exercises.

We generated net income of $42.8 million or $0.98 per share on a diluted share base of 43.5 million shares compared to net income of $31.2 million or $0.72 per share in the first quarter of last year on a diluted share base of 43.1 million shares.

I do want to point out that the use tax settlement and the new accounting standards for share-based payment favorably impacted our net income and EPS by a combined $4.9 million and $0.11 per share, respectively.

So still strong growth of over 20% on both of these metrics, even when these items are excluded.

Turning to the balance sheet for just a minute.

At the end of the quarter, we had just under $245 million of outstanding debt on our credit facility, resulting in low leverage of under 1x with available borrowing capacity of nearly $237 million.

As we've stated previously, investing in growth via high return new store development remains the top priority of our capital allocation strategy.

However, our significant free cash flow and strong balance sheet provides us with a lot of flexibility to return value to shareholders in additional ways, including share repurchases.

Last year our Board put in place $100 million share repurchase program.

And in the first quarter, we accelerated our pace of share repurchases to over $31 million.

And with additional shares purchased in the ongoing second quarter, we are now close to exhausting this authorization.

So we are pleased to announce today that our Board has authorized an additional $100 million in share repurchase as we look to continue to return value to shareholders, while also investing in growth of our brand.

Turning now to our outlook.

As we have referenced on previous conference calls, we continue to view 2017 as a year of more normalized growth coming off a record 2016 year.

Our long-term financial targets are for low double-digit annual growth and total revenue and EBITDA.

With this in mind, based on our strong first quarter results, we are raising our annual guidance on several key metrics for 2017 which, you may recall, is a 53-week year for us.

Total revenues are expected to range from $1.16 billion to $1.17 billion, as we have raised the lower end of the range by $5 million.

Comp store sales growth on a comparable 52-week basis is still projected between 2% and 3% for the year or in line, to slightly above, our long-term target.

Note that we have 76 stores in our comp store base for fiscal 2017.

From a development perspective, we are now targeting 12 new store openings, confirming the top end of our prior range.

We expect our 2017 class will skew towards large-format stores and new markets for our brand.

We've already opened 7 stores so far this year and currently have 5 under construction, so we are confident in this guidance.

EBITDA is now expected to range between $276 million and $282 million, representing a $5 million increase at the top end of the range, and we are projecting net income of $107 million to $111 million based on an effective tax rate of 34.5% to 35%.

This guidance now includes the first quarter impact of the new accounting standard related to share-based payment.

However, we have excluded any potential future tax benefits in the balance of 2017 since its timing and magnitude is largely out of our control and will likely exhibit significant volatility.

We also estimate a diluted share count of 43.2 million to 43.4 million shares.

That's unchanged from our prior guidance but now includes the impact of the new accounting standard.

And finally, we project net capital additions after tenant allowances and other landlord payments of $166 million to $176 million driven by new store openings, our remodeling projects as well as new games and maintenance.

This does reflect a $10 million increase from our prior guidance driven by higher [than expected] pre-spend in 2016 for our 2018 class of new stores.

With that, I'll turn the call back over to Steve to make some final remarks.

Thank you, Brian.

I'd like to review our recent and upcoming store development activities as well as our remodeling program.

But before I begin, let me point out that as we look forward to successfully opening our 100th store in the coming weeks, it's a good reminder of how fortunate we are to have a strong a dedicated team led by John Mulleady, our SVP of Development.

This team continues to execute on our vision, driving towards the aforementioned opening of more than 200 locations in the U.S. and Canada.

We're very pleased with the response to our recent openings.

During the first quarter we opened 4 stores in Carlsbad, California; Columbia, South Carolina; Overland Park, Kansas; and Tucson, Arizona.

In the second quarter so far, we have already opened stores in New Orleans, Louisiana, which is a new state for us; Alpharetta Georgia, near Atlanta; and Myrtle Beach, South Carolina.

We plan to open 1 additional store this quarter in McAllen, Texas which will be our 100th location.

We currently have 5 stores under construction and a total of 23 signed leases, providing us with significant visibility on new store growth well into 2018 and the first part of 2019.

As Brian mentioned, we now expect to open 12 new stores for this fiscal year which equates to unit growth of 13%, again at the top end of our previous expectation of 11 to 12 new stores.

By the end of fiscal year 2017, we'll have 104 stores operating across 35 states in Puerto Rico and that's just under half of our long-term goal.

As a reminder, our long-term target is for 10% or more annual new store growth and units, including a combination of large and small store formats.

As always, we're constantly refining our processes to ensure greater efficiency during the preopening and first 90 days of opening.

We remain focused on having buildings and teams ready to handle the typically strong opening weeks that we have in new stores.

Of the 12 stores planned for 2017, 7 stores will be in new markets for D&B, with the remaining stores located in markets where we already have a brand presence.

In terms of square footage, as we've said before, we'll continue to use the entire range between 25,000 and 45,000 square feet.

We expect 6 large stores this year at approximately 40,000 square feet, 2 stores to be between 31,000 and 35,000 square feet and the remaining 4 stores to be 30,000 square feet or less, our small stores.

As developers continue to pivot towards more entertainment options, our position as a premier sought-after entertainment and dining concept continues to strengthen, we remain well positioned to capitalize on these opportunities but are selective in picking the best sites for our brand.

With respect to the 4 remodels that we plan for this year, we may not track to complete these by the end of the second quarter and before the start of the football season.

Excluding these 4 stores, our remodeling work is substantially complete.

So in conclusion, we had another strong quarter.

We raised guidance for the full year and we remain focused on returning value to shareholders, including share repurchases.

As always, we appreciate your continued support and interest in Dave & Buster's.

Operator, please open the line for questions.

(Operator Instructions) And we'll take our first question from Nicole Miller with Piper Jaffray.

I just had 2 quick questions.

Thinking about the Food and Beverage versus Amusement sales, what would you point out as similarities or differences between traffic trends?

I know you give us the price versus traffic and mix for Food and Beverage, and you also talked about a mix shift, I think negative.

But just wondering if you could put some color around that and how that would compare to Amusement trends and just wondering, is there a way you can look at Amusement, like number of plays or any metric that compares to traffic on that end?

Well, sure.

First of all, as we said, and I just said in my comments, I mean we lead with Amusement.

It is the point of differentiation for us and really the focus of our advertising.

We believe that helps to fuel footfalls and really is the primary reason for the visit.

We're very cognizant of the fact that driving F&B at the expense of amusements would really be a bad trade for us, given the margin differential.

So we want anything that we would do to be incremental.

To directly answer your question, what we are seeing is increases in the number of card counts, for example, and decreases in the number of items sold per card, if you will.

So that's really what the issue is for us.

And just to put a little context behind it, I mean we've outperformed Knapp over the last 3 years by over 1,000 basis points.

So -- but having said that, we really feel like this is an area that we're going to need to address.

And over the next several quarters, we're going to test several F&B initiatives to see if we can't increase that attachment rate and drive incremental Food and Beverage, including some things with respect to the menu; as both items and number of items, pricing, including promotional and some service enhancements.

So one of the things that we just completed in the second quarter was our Simphony rollout.

That enables us to do things like pay at the table, some handheld devices, line-busting.

So really trying to reduce the friction that we have for some of our guests in having those food and beverage transactions.

And just a second and final question, can you talk a little bit about what you're doing from a hiring, training or retention standpoint as you hit your 100th store opening, but you're also still clearly at a pace of double-digit development with still the ability to double the unit base?

So how are you looking from a human capital standpoint?

So one of the advantages that we have right now is our retention rate is substantially better than what you would see in the comparable category for People Report.

So where People Report turnover now has risen to over 30% in management, and it's close to what we're -- over 100% in hourly -- and our rates, for both of those, have been lower and substantially lower on the management side.

Now having said that, I mean we do a disciplined succession planning process.

We use the 9 box format, that most of you have probably heard of, and really try to project out how we are going to staff our growth through really out into 2018 looking at the individual stores, what markets they're in, who's interested in moving to those markets if we don't have existing stores in those markets and that kind of thing.

It's also part of the reason that we said we want to grow at more than 10% but we don't necessarily want to be a 20% grower, in terms of unit growth because of the need to really be disciplined with that human resource pipeline so that's how we approach it.

We'll take our next question from Andrew Strelzik with BMO Capital Markets.

I wanted to first ask on the EBITDA guidance.

It looks like you raised the EBITDA guidance less than the beat for the quarter.

Even though the comps were the same, you beat on margins and you raised to the high end of the unit growth.

So I'm wondering as we think about the next 3 quarters, what you're thinking about there, seeing there that's taking down the guidance for that part of the year.

Yes, balance of year-wise, some of the margin expansion that we saw in the first quarter we think will be more muted in the balance of the year as we have a deflationary environment in cost of goods for food, and we don't expect that to continue that way.

And then we do expect occupancy costs and labor to be more pressured in the back -- in the balance of the year, as we bring on new stores.

And we talked a bit about that in the past that our new stores are less efficient, both from a labor perspective and an occupancy perspective, rent perspective.

So -- and there are some elements of timing.

I think I mentioned there's some marketing timing in my comments.

So there's a little bit of that, so that's why you don't see us raising the top end by the full beat of the quarter.

Not to mention that is consensus and your guidance, not on our internal plans, too, by the way, so...

Yes, that is very fair.

One more question if I could.

Is it normal for you to have so many of your openings weighted to the front half of the year?

And I guess, implicitly, I'm wondering if there are opportunities that some of the stores that are maybe planned for next year, if that gives you an opportunity to move some of them into this year, kind of later in the year, and move that development goal up for this year.

I think we've said that our first call on capital will always be new stores.

And if we can fit that in -- you just heard me talk about human capital pretty extensively.

And to the extent that we can make the human capital work with that, in addition to the development, just the proper spacing between store openings, then we would consider accelerating a store.

But we're not committing to that today.

We want to see how that plays out through the balance of the next couple of quarters.

We'll take our next question from Andy Barish with Jefferies.

I'm wondering if -- I understand the inefficiencies on new store productivity, but maybe versus planned given the volume, sales appear to be better.

Are you getting a little bit more flow-through on those new stores than maybe you originally thought?

Well, I don't know about -- I'm not sure about that.

I mean we did, obviously with the margin improvement we had in the first quarter, when you adjust out the Amusement tax credit, it was still 70 basis points of improvement year-over-year.

So we were pleased with that.

And I feel like Margo and the ops team did a nice job really trying to dial in this large growing base in non-comp stores.

So we're working hard to try to make them as efficient as we can, as quickly as we can, so -- and I...

I guess another way to ask the question is are you willing to share the sort of the unit level EBITDA contribution from the comp stores year-over-year?

I don't think we're going to begin to start breaking out the segmentation of comps versus non-comps EBITDA contribution at this point, Andy.

I don't think we see doing that, making segments here.

No problem.

And then on occupancy, I guess, with the continued number of retail closures and such, are you surprised you're not seeing some breaks on occupancy costs?

Or is that just not factoring in, in the types of malls or developments you want to be in?

So we pick the trade area that we want to go to first, and we try to narrow it down to relatively a narrow target within the trade area and then optimize 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 line up 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.

And I would say that we're paying what we believe are fair market rents for the sites that we're developing but those are not lower rents than what we have in the historical base.

So we have a lot of new stores which, as you know, 45 of our 99 stores are less than 5 years old but we still have quite a number of stores in that legacy base that are substantially lower in terms of their cost per square foot compared to what we're paying today for a new lease even in this, I guess, what you might call a distressed real estate market for big boxes.

We'll take our next question from Brian Vaccaro with Raymond James.

I wanted to start off on the comps.

And Steve, I know you mentioned there was a lot of volatility in the quarter for a variety of reasons.

And I know you don't provide monthly comps, but can you give us some high-level color on sort of the monthly cadence and how that played out through the quarter?

We really don't do monthly cadence but I will say this.

There were a lot of shifts and it may -- this is very, very typical of first quarter where you have extreme volatility week to week.

Some of it was calendar-driven, Valentine's Day flips off a weekend and into a -- and flips into the middle of the week, and that was a little bit of a headwind.

Calendar-wise, spring break, Easter, all that shifting out in general, is not good for us.

So having a time, spring break at a time where it's more likely that people would be both able and want to spend time outside.

Again, so April spring break as opposed to March spring break is unbalanced or, on average, not right for us.

So those are a couple of kind of things that created such headwinds.

It's almost impossible to read any underlying trend by virtue of when the spring breaks are moving back and forth between March and April.

And then the last thing I'd say is, on weather, we view it as a slight positive.

We had a lot of rain in California, which is typically good for us, offset by some other regional issues around the country.

So kind of net-net, we look at the entire thing and say it's not -- it's probably not a material impact to us since it all fell within our quarter.

Okay.

And if you think about the food and bev comps specifically.

And obviously, the gap widened a bit on the beverage side quite a bit lower than the food side.

Just curious, is part of that driven by, say, outsized sales growth during day parts where you have lower sort of natural attachment, thinking about growing your daypart during the afternoons or resonating in some of the initiatives to drive your family traffic.

Is part of it that dynamic?

Or is it more related to some of the things you talked about, during sort of the core business hours?

Brian, I think you make a great point.

We do continue to see our strongest performance in sort of our lunch afternoon daypart and less growth kind of dinner and late-night.

And really feel like that's a reflection of the increase in the family mix we've seen over time, as we continue to feature new games with a very broad appeal.

And as I think you alluded to, the early dayparts are characterized really by higher amusement consumption relative to food and bev.

So less attach rate, there's less propensity to penetrate F&B during that time.

So yes, we do believe that is a part of the reason for this increasing separation that we're seeing between F&B and Amusements.

Okay, that's helpful.

And then just last one, I wanted to confirm, Brian, the EBITDA guidance for the year, that's based on a reported EBITDA in Q1 of $88.2 million, correct?

So that includes that $2.5 million [good guy] improvement in COGS?

Yes, sir.

That's correct, Brian.

(Operator Instructions) We'll take our next question from Steve Anderson with Maxim Group.

I'm calling to ask about, in your guidance of 12 new restaurants, are these all new locations?

Or any relocations involved with that?

And do you see that being a part of the mix, as you look into your '18 store development?

First of all, it does not include any relocations.

Historically it has, if you dial back several years though, so it's probably been 4, 5 years since we did a relo really.

[Buffalo] was the last one, 2 years ago, yes.

Actually, 2 years ago we did [Buffalo].

But none of the -- when we say the kind of 10% or more unit growth, where we're seeing that is new units, not relo.

I don't believe that there is going to be a substantial number of relos that we will end up doing over the course of the next several years.

Having said that, there's a couple of stores that are on our radar that if we could find the right spot, we would be trying to relo those stores.

And the other question I had, I missed -- I came in late on the call, what was the comp you had for the Food and Beverage businesses?

We were -- food comp was down 2.2% and our bev comp was down 4.2%.

Overall comps were up 2.2%, and our amusements comp was up 6.4%.

(Operator Instructions) We'll take our next question from Sam Teeger with Citi.

Just wondering how are your Texas stores during the quarter?

That was actually addressed in our remarks here but we mentioned that our Texas stores, they outperformed the overall comp.

(Operator Instructions) And with no further questions in the queue, I'd like to turn the call back over to management.

Just thank you for joining our call today.

We look forward to reviewing our second quarter results with you in early September.

Goodbye.

And that does conclude today's conference.

Thank you for your participation and you may now disconnect.