• Dave & Buster’s interim CEO criticized past leadership’s management decisions.
  • The company’s stock has dropped 70% in the last year.
  • Turnaround plans include a “back to basics” strategy and new attractions like a “human crane” game.

Dave & Buster’s is on a losing streak.

On Monday, the company reported a net profit of $9.3 million for the fourth quarter, a 74% year-on-year decline. Its stock has shed 70% of its value in the past year. On its earnings call, the company’s interim CEO tore into the company’s past leadership decisions.

An analyst asked Kevin Sheehan why the company was struggling, including whether competitors’ growth had hurt Dave & Buster’s.

“I’d like to use the excuses, it’s the competitive thing, but it’s not. I think it was mostly our own execution,” Sheehan said.

Sheehan used the earnings call to lay out a turnaround plan for the business, but the call was also peppered with some scathing criticisms. Here’s a sampling of Sheehan’s quotes:

  1. On previous management's decisions: "In attempting to improve the business that was already doing well, prior leadership made very dramatic and chaotic changes that among other things, distracted, confused and overwhelmed our customers and our operators."

  2. Also on previous management's decision-making: "Previous leadership, while well-intentioned, made significant and ill-advised changes to marketing, food and beverage, operations, remodels and games investments that negatively impacted the business."

    Sheehan added that his team has been "systematically unwinding these mistakes and pursuing a "back to basic" strategy."

  3. On marketing and advertising: "On marketing, prior leadership made drastic changes to our media mix, essentially eliminating TV entirely. We went from 90%-plus TV to essentially zero," Sheehan said. "Prior leadership also overwhelmed our customers and operators with way too many and often overlapping and conflicting promotions."

    He said the company has reintroduced television advertising and its past style of promotions.

  4. On operations: "We were overwhelming our operators with promotions and making too many other changes to menu, service style, pricing, labor configuration, remodel activity and other changes," he said. "I have personally spent an enormous amount of time directly with our operators, hearing from them, hearing their issues."

Sheehan has been the interim CEO of the entertainment, restaurant, and arcade chain since December.

He held the role once before, from 2021 to 2022. Chris Morris took over as CEO in 2022. Morris left in December to become the CEO of European Wax Center.

Sheehan said the brand's turnaround plan includes bringing back popular menu items and introducing new games, including a "human crane." The game is a life-sized version of the claw machine game popular in arcades. Sheehan said 40 locations have the attraction and that there are plans to roll it out in 100 more restaurants.

Dave & Buster's and Morris did not immediately respond to requests for comment from Business Insider.

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