Categories Consumer, Earnings Call Transcripts

Dave & Buster’s Entertainment Inc. (PLAY) Q3 2020 Earnings Call Transcript

PLAY Earnings Call - Final Transcript

Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) Q3 2020 earnings call dated Dec. 10, 2020

Corporate Participants:

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Brian A. Jenkins — Chief Executive Officer

Margo L. Manning — Senior Vice President and Chief Operating Officer

Analysts:

Jake Bartlett — Truist Securities — Analyst

Jeff Farmer — Gordon Haskett — Analyst

Andrew Strelzik — BMO Capital Markets — Analyst

Andrew Barish — Jefferies — Analyst

Chris O’Cull — Stifel — Analyst

Brian Mullan — Deutsche Bank — Analyst

Joshua Long — Piper Sandler Companies — Analyst

Brian Vaccaro — Raymond James Financial Inc — Analyst

Presentation:

Operator

Good afternoon, everyone. Welcome to the Dave & Buster’s Entertainment, Incorporated Third Quarter 2020 Earnings Results Conference Call. Today’s call is being hosted by Brian Jenkins, Chief Executive Officer. He will be joined on the call by Scott Bowman, Chief Financial Officer; and Margo Manning, Chief Operating Officer. I’d like to remind everyone that this call is being recorded and will be available for replay beginning later today.

Now, I would like to turn the conference over to Scott Bowman for opening remarks. Please go ahead.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Thank you. And thank you for joining us today. Before we begin our discussion on the 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 fact. Any of these items should be considered forward-looking statements related 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 risk factors and uncertainties have been published in our filings with the SEC, which are available on our website at www.daveandbuster.com under the Investor Relations section.

In additional, 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 Brian.

Brian A. Jenkins — Chief Executive Officer

Well, thank you, Scott. Good afternoon, everyone. And we appreciate you joining our call today. On behalf of the entire D&B team, we hope you and your families are remaining healthy and safe during what continues to be a challenging time in our nation’s history. I continue to be extremely proud of our team for their tremendous agility, their resilience and commitment to succeeding under extremely difficult circumstances.

As we have discussed on previous calls, our two key near-term priorities are to, number one, reopen and operate our stores safely and efficiently as quickly as possible and, two, to thoughtfully accelerate change in our service model, menu, programming and marketing. We believe our focus on those two priorities will position our business to thrive in a future beyond COVID. And on both of those fronts, we had a very successful third quarter. I’ll speak to the first of those priorities now. And then Margo and I will provide an update on the second after Scott has had a chance to review our Q3 results and also our expectations for the third — fourth quarter.

During the third quarter, we made significant progress reopening stores and driving improved operating performance. We began the quarter with 84 open stores and finished with 104, representing 75% of our total store base. This included the opening of two brand new stores, one in Manchester, New Hampshire and one in Lehigh, Valley Pennsylvania and the permanent closure of one store in Houston, Texas.

Over the quarter, we also made progress rebuilding our revenue with an average of 74 reopened fully operational comp stores generating revenues at 57% of 2019 levels. That’s up from 35% in the second quarter when we had an average of 39% fully operational comp stores. Comp sales at our reopened stores improved as the quarter progressed, peaking in late October at a 68% index to 2019 levels with the top quartile reaching the combined index of 91%. Four stores generated sales above their 2019 sales for that same week.

With improving sales over the course of the quarter and continued discipline around our lean operating model, we drove a meaningful improvement in our EBITDA trend relative to the second quarter and reduced our cash burn rate as well. In fact, 68 of our 104 reopened stores achieved positive store level EBITDA during the third quarter and 80 stores did so in the month of October, bringing us to within a few million dollars of breakeven on an enterprise level for that month even with all of our California and New York stores still closed.

We believe the strong sales recovery for the third quarter and return to store level profitability at the majority of our opened stores clearly illustrates the resilience of the Dave & Buster’s brand and validates our game plan for navigating through this unique COVID environment.

Also during the third quarter, we solidified our balance sheet and significantly enhanced our liquidity by successfully issuing $550 million of senior secured notes due in November of 2025. We used the proceeds along with available cash to completely pay-off our term loan and to pay down our revolving credit facility. As a result, our total available liquidity under our revolver stood at $314 million at the end of the quarter, significantly extending our liquidity horizon.

In conjunction with the bond offering, we also secured modifications to certain debt covenants through 2022 and a two-year term extension on our credit facility resulting in no debt maturities until August of 2024. On the whole, we are very pleased with our performance and accomplishments during the third quarter.

Now as you are all aware, the resurgence of COVID infections around the country is causing states and local jurisdictions to place renewed restrictions on restaurants and arcade operation and has led to store reclosings in the month of November. As a result, the pace of our overall sales recovery moderated over the first five weeks of the fourth quarter, causing sequentially higher EBITDA loss in November. And we expect these pressures to intensify over the remainder of the quarter.

Despite this recent turn of events, we are well positioned with an exceptional team, a strong plan, significant liquidity and a resilient brand. And I view this as a temporary setback. And we are extremely optimistic about our ability to navigate through another COVID resurgence period and really come out on the other side of this even stronger when this wave passes.

At this time, I’m going to ask our CFO, Scott Bowman, to touch on the financial highlights of the third quarter and provide some broad insights on how we’re managing through the fourth quarter in the midst of renewed COVID limitations.

Scott?

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Thanks, Brian, and thanks to everyone on the call for joining us today. I’ll first spend some time summarizing our third quarter performance and our current liquidity position. And then I’ll provide some expectations for the fourth quarter.

For the third quarter, total revenues of $109 million decreased 64% compared with the prior year period, reflecting a 66% decrease in comparable store sales. By month, comparable store sales were negative 75% in August, negative 62% in September, negative 59% in October. For comparable stores that were open and fully operational for these periods, I would also like to provide some performance details by month compared with the same period last year.

For August, our 68 open comparable stores produced a sales index of 46%. For September, 76 open comparable stores posted a sales index of 65%. And for October, our 77 open comparable stores produced a sales index of 61% compared to the prior year. As for sales mix, amusements and other continued to outperform food and beverage, accounting for 65% of total sales compared to 58% last year.

Turning to the balance of the P&L. Gross margin improved 101 basis points to 83.6% in the quarter, primarily due to higher mix of amusement sales, partially offset as food and beverage spoilage that was expensed as stores reopened. Operating payroll and benefits expense was $27.7 million, a decrease of 64% from the prior year primarily due to fewer open stores and continued execution of a leaner labor model. Despite the lower sales base, we succeeded in managing these expenses to 25.4% of sales equal to the same period last year. Other store operating expense was $70.8 million, a decline of 36% from the prior year, primarily due to lower variable costs compounded by savings and marketing, return maintenance and rent abatements.

As a percent of sales, other store operating expense was 64.9% of sales versus 37.1% last year. The higher percentage was mainly due to the deleveraging effect of lower sales on occupancy expense. G&A expense of $11.7 million decreased 28% from the prior year, mainly due to savings and compensation expense, consulting expense and legal fees. Consulting expense declined $2.6 million partially due to a $1.5 million accrual reversal related to outside advisory fees. As a percent of sales, G&A expense was 10.8% compared to 5.4% for the same period last year, mainly due to the deleveraging effect of lower sales.

Third quarter EBITDA loss was $21.7 million, reflecting an average EBITDA burn rate of $1.7 million per week, which compares to a burn rate of 3.5 million per week in the second quarter. Adjusted EBITDA loss was $16 million for the quarter.

Turning to the balance sheet. We ended the quarter with $8 million in cash and $314 million of availability under our revolving credit facility, which was net of our $150 million minimum liquidity [Phonetic]. Total long-term debt stood at $576 million at the end of the quarter, consisting of $550 million in recently issued senior secured notes and $26 million outstanding on our revolver. Additionally, at the end of the quarter, we had approximately $17 million in deferred vendor payables, which compares to approximately $35 million at the end of the second quarter.

We plan to have approximately $6 million of deferred payables remaining at the end of the fiscal year. Deferred rent totaled approximately $48 million at the end of the third quarter compared with approximately $40 million at the end of the second quarter. We continue to negotiate with landlords for further rent deferrals but expect to be getting some level of repayment beginning in January and extending over 12 to 18 months’ time period. Also during the third quarter, we received a 2019 tax refund of approximately $10 million related to the CARES Act and expect additional refunds of approximately $11 million over the next couple of quarters.

Excluding financing activities, our weekly cash burn rate improved to $2.4 million due primarily due to an improved EBITDA burn rate. When netted together, the temporary working capital adjustments related to deferred payables and deferred rent offset by the CARES Act tax refund had an overall de minimis effect on our weekly cash burn rate.

Turning to capital spending, we recently completed construction and opened two new stores in Greenwood, Indiana and Gloucester, New Jersey and planning on opening one additional store by the end of fiscal 2020. Additionally, we plan on accelerating two capital projects in the fourth quarter, which have contributed to efficiency gains in our stores. These projects include investments in Tampa [Phonetic] to improve our service model efficiency and high-speed kitchen equipment to gain efficiency for certain menu items. Including these investments, we expect to spend approximately $60 million to $65 million in capex for fiscal 2020, net of tenant allowances.

In summary, our operating results for the third quarter reflected encouraging sales trends that reopened stores and validated our lean operating model. Additionally, as a result of the improved liquidity position in the company’s projected cash flows from operations, the company believes it has alleviated the substantial doubt about the company’s ability to continue as a going concern and the company has sufficient liquidity to satisfy its obligations over the next 12-month period. While we are very encouraged by recent performance, COVID resurgence around the country has resulted in the new operating limitations, store re-closures and further delays in the company’s ability to reopen stores. This has naturally had a negative impact on our performance during the first five weeks of the fourth quarter.

After ending the third quarter with 104 open stores, we now have 90 open stores or 65% of the chain and have experienced overall comparable store sales of negative 71% for the first five weeks of the quarter. For our average of 71 fully operational comp stores, we have experienced an index of approximately 49% compared to last year, which had been mainly due to heightened COVID concerns and mandated reductions in operating hours.

For the month of November, the slowdown resulted in $32.6 million in sales at a negative 69% comp and an EBITDA loss of $11 million, resulting in a weekly EBITDA burn rate of $2.7 million. We currently anticipate that the trend of COVID cases and resulting actions by local jurisdictions will intensify over the balance of the fourth quarter and that reopening of our California and New York stores will likely be delayed until early 2021.

These conditions will be especially impactful to our December sales and profitability, a month in which we have historically benefited from high foot traffic and a robust special events business. Given these expectations, coupled with anticipated cost pressures, we expect further erosion in our fourth quarter comparable store sales and EBITDA.

One of the primary expected cost pressures during the fourth quarter is store labor, reflecting our decision to recall key store leadership positions to maintain talent and to ensure store restart capabilities. We also plan to incur increased repair and maintenance costs to ensure stores are up to standard, above-normal spoilage costs due to prolonged closures, reduction of rent abatements due to the expiration of landlord agreements and the G&A as we recall select positions based on these. While this temporary setback will impact our results in the near-term, we have the playbook to navigate through this resurgence and feel confident that demand will return once resurgence subsides.

With that, I’ll turn it back over to Brian.

Brian A. Jenkins — Chief Executive Officer

Thanks, Scott. Despite the recent temporary setback in our business, we’re very encouraged about our future potential due to the resilience demonstrated in our third quarter sales trends and our enhanced liquidity. Another reason we feel very confident is that even before COVID arrived, we were developing and preparing to implement strategic initiatives to accelerate change in our menu, service model, programming and marketing.

Over the past nine months, our team has worked to create a new future for Dave & Buster’s beyond COVID with a plan designed to broaden our relevance and enhance guest engagement while at the same time enabling us to operate more efficiently.

As we’ve reopened and welcome guests back to our stores, we gained confidence in each element of that plan. Much of the execution of our reopening game plan and implementation of our future forward strategic initiatives is being driven by our Chief Operating Officer, Margo Manning. Margo is a 29-year veteran of Dave & Buster’s and has been in her current role for the past four years. And she and her team, together with our store managers, have led our store level COVID response with incredible professionalism, teamwork and discipline.

I’ll ask Margo to join us today to share more information about the investments we’re making in our service model and menu initiatives, which we believe will help put us in a very strong competitive position when we begin to emerge from the current COVID limitations. Here’s Margo.

Margo L. Manning — Senior Vice President and Chief Operating Officer

Thank you, Brian, for this opportunity to highlight the exceptional job our operating teams have done reopening our stores. As each market has been cleared for reopening, our team has demonstrated their ability to get stores up and headed back toward store level profitability quickly. This takes enormous effort, and I’m extremely proud of the team’s performance through these unprecedented conditions. The best part about reopening our stores is bringing back the staff. To-date, we’ve been able to recall approximately 8,000 team members, almost half of the number we were forced to furlough at the onset of the pandemic. And it’s been great seeing them welcome our guests back for good, clean fun.

As Brian said, our team has been implementing and refining a number of service model and menu initiatives that we had already developed before COVID arrived and we’re originally planning to roll out in 2020. The primary objective of our menu initiative is to establish a stronger differentiated food identity for the Dave & Buster’s brand. After extensive research, we have landed on inspired American kitchen as our identity and we have built a plan to bring it to life in 2021.

Our new food identity is rooted in enhanced flavors and quality ingredients across a convinced number of menu items, price to maintain our historic gross margins. It enables our guests to explore new flavors while also offering them a balanced selection of familiar dishes. Designed to simplify operational execution, this new menu sets our staff up to deliver dishes to our guests hot and fast. Taken together, we expect our new menu to drive an improved guest experience to increase our food attachment rates and to accelerate table turn, all aimed towards increasing food and beverage sales.

Our new menu is supported with a dedicated training program that educates our kitchen and wait staff on everything from flavor profiles to cooking techniques. Additionally, we’re in the competence of rolling out a new piece of kitchen equipment to every store that will speed up cooking times. And we are also upgrading our kitchen management system to facilitate a seamless flow of food, both meaningful operational improvements that will be completed in the first half of 2021.

In mid-November, we began the transition to our new menu from the temporary 15-item menu that we implemented as stores began to reopen last spring. We are now offering 17 items and currently plan to add six more dishes in early March and expand to 28 amazing items by late April. This represents 33% fewer items than the 42 items on our pre-COVID menu. Of course, we’re prepared to remain flexible in terms of the menu expansion timeline and we will adjust accordingly based on the status of the pandemic.

Turning to the service level initiative. The primary goal here are to enable guests to control more of their in-store experience and to free up our team members to focus on cross-selling and upselling. We believe that increased interaction with our guests will enhance their overall experience. The nucleus of this effort consists of deploying a combination a tablet, kiosk and mobile web to enable a completely contactless order pay experience.

Our five new stores were launched on this platform and it’s been well received by our guests, most of whom have adopted a hybrid approach initially, utilizing both the new technology and the ways of our [Phonetic] team member. As we continue to refine this technology and service model, we are evaluating the potential to expand this platform to all of our stores during 2021.

Another completely new element of our service model initiative involves the November launch of third-party delivery partnership with Door Dash and Uber Eats at 105 of our stores, essentially, all of the stores that we had reopened during the third quarter. Our plan is to add the remaining stores primarily on California and New York locations once we are able to open them for onsite dining.

And finally, to further expand our reach and leverage our kitchen capabilities, we’re beginning to cast several of those kitchen concepts highlighting specific food categories from our new menu. We’re exploring concepts that could be rolled out nationally, regionally or offered in specific markets or offered seasonally or even offered around specific major events.

An overarching objective of our menu and service model initiative is to enhance our long-term profitability by driving increased sales more efficiently. Obviously, many aspects of the lean operating model that we’ve adopted for the past nine months will not be fully sustainable as we move back towards the full operating posture. However, we have learned a lot and are confident that our post-COVID, fully operational service model and menu will produce some degree of sustainable leverage across our major cost levers.

Now, I’ll turn the call back to Brian for his closing remarks and will remain on the call to answer any questions.

Brian A. Jenkins — Chief Executive Officer

Thanks, Margo. And thank you so much for your leadership and your team’s ongoing commitment and dedication to this company that we both love so much. So thank you for that.

As Margo indicated, we have been working on our service model initiative even in the midst of COVID limitations. We’ve also refined our menu during this period and are poised to fully execute the next two phases of expansion as market conditions improve to a level that will support our success. In addition to those investments, we use some of our reopened stores to test new programming strategies that we believe will drive relevance and recovery as we are able to return to full operations. For example, we launched a system-wide in-store radio station, D&B Live and deployed a cloud-based digital video system that enables us to centrally manage programming on our WOW Walls and other high-visibility screens in a store.

We also experimented this fall with sports programming to see how our guests respond to a more immersive watch experience featuring live deejays and engaging events like vendor-managed beverage tastings at select stores. We’re taking the learnings from these tests and refining our programming and event strategies to be in a position to expand them as COVID restrictions ease.

Additionally during the third quarter, we launched our exclusive Star Wars Lightsaber Dojo VR game that quickly established itself as our top-earning single-player non-redemption game. In Q1, we’ll test multiple game titles to determine the extent of our 2021 game buy, and we’ll watch the pace of business recovery to time their broad rollout.

We also launched our new national brand marketing campaign in September. Initial response to the campaign has been encouraging. And we will continue to leverage our relationship with our new creative agency to expand the platform, along with a reimagined promotions and events calendar as market conditions recover. We currently anticipate rolling out our game, programming and marketing initiatives more broadly in late spring to early summer time frame depending on COVID trends.

I’ll close today by reiterating the themes we’ve been focused on for the past nine months. As difficult as those months have been, we are confident that our team, our plan, our liquidity and our brand put us in a strong competitive position to bounce back quickly when the threat of COVID begins to subside. Our team is far more experienced and prepared for this current resurgence than we were back in March. We have confidence in our COVID game plan and in our team’s ability to execute it nimbly as market conditions allow.

We have a vastly improved liquidity horizon extending beyond the projected threat of COVID with the promise of one or more vaccines expected to become widely available in 2021. And we’ve validated that our store reopening process and lean operating model can produce positive enterprise of EBITDA at sales index of 50% to 55% of 2019 levels.

And finally, and perhaps most important, we’ve demonstrated the resilience of the D&B brand and the pent-up demand that exist among our guests to return to Dave & Buster’s unique menus. When they do, they’ll be greeted by an inspired team, a fresh new menu, a more customer-centric experience and the good clean fun they’ve come to expect from Dave & Buster’s.

I continue to be very proud of and inspired by our team for their commitment and teamwork in the face of difficult and ever fluctuating conditions. Each member of the D&B team is contributing their unique skills to drive our success while setting us up for a better future. And for that, I am extremely grateful. We will get through this together. We’re going to come out on the other side and we will thrive again in 2021.

Now, Ali, we’d like to open up the call for questions.

Questions and Answers:

Operator

Chris, thank you. [Operator Instructions] And we’ll go ahead and take our first question from Jake Bartlett from Truist Securities. Please go ahead.

Jake Bartlett — Truist Securities — Analyst

Great. Thanks for taking the question. Brian, my first is on the deceleration of the same-store sales. We’re actually really focusing on the stores that remain open in the comp base and deceleration quarter-to-date from late October. Can you just aggregate what the impact has been on stores that have not had any change and restrictions? I’m trying to you it seems mathematical obviously there’s restrictions being reimposed. But in stores that have not, for instance, stores in Florida and you gave us such great detail in the deck mid-October. You have markets that have not been directly affected by reclosures. Have those also decelerated fairly meaningfully?

Brian A. Jenkins — Chief Executive Officer

Yes. It is a really good question, Jake. Hope you’re doing well by the way.

Jake Bartlett — Truist Securities — Analyst

And you as well.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Yeah. Thank you. The deceleration we’ve seen in November has been broad so restrictions themselves if we’re still allowed to open have not really created that big headwind and performance operating hours a little bit. Capacity restrictions those sorts of things really don’t impact us like they would a casual diner because we have big facilities and a lot of capacity and a lot of its unused certainly over the week and many operating hours. So that’s not particularly the headwind there. So the decline that we have seen in November have been in virtually every market. So, there’s definitely a COVID overhang now in most markets, even in Florida. If you look at the data we’ve put out on the website showing the trends by state and virtually every state is declining in November. So, I think…

Jake Bartlett — Truist Securities — Analyst

Got it.

Brian A. Jenkins — Chief Executive Officer

…you’re seeing some reluctance, I think, my guess to get out really nationally right now.

Jake Bartlett — Truist Securities — Analyst

Great. Okay. That makes a lot of sense. My next question is just on the work that you’re doing with your initiatives around the menu and around some of the operational improvements. When you look out into the future, maybe it’s a year, a couple of years, if you — when you regain your sales, how much more efficient do you think you’d be? I’m not sure how you know what the best way to frame that is. Some companies have talked about, we would need 90% of our sales to achieve the same level of profitability or something, something like that. So, is there a way you can frame how we should think about these more efficient model coming out of COVID, just really the extent that it’s going to be more efficient?

Brian A. Jenkins — Chief Executive Officer

Yeah. I mean, as Margo said, we’ve learned a lot of things. We’ve been really scrappy over the last month in terms of labor. In some ways, a lot of initiatives we’re talking about tablets and what we’re trying to do with self-service, and that really is driving what’s happening today. I mean, we’re — this is just a grid on the part of our operators and they’re doing a fantastic job and being very nimble in terms of how we’re scheduling up and down the P&L and particularly labor.

So, we are definitely getting some efficiencies by our operating calendar. We’re not operating 95 hours a week. So, some of the periods where we are less efficient, less revenue, that’s helpful right now. And we’re going to continue to look at that, our operating calendar, as we move forward because it has been helpful. And the initiatives we’re talking about and Margo’s talking about are really more forward-looking. And we have some of that stuff in test. We think it could be very helpful to us. But I think we’ve learned some things. We don’t anticipate that we’re going to go back to full par level on our management team. When we get back to our normal sales level, I think some of this stuff is going to stick. It’s not all going to stick in terms of hourly labor. We’re going to see some pressure on that as we get that New York and California. Those are higher cost states for us. And they’re not open right now.

Do you want to add anything, Margo?

Margo L. Manning — Senior Vice President and Chief Operating Officer

I think you hit that one.

Brian A. Jenkins — Chief Executive Officer

Okay.

Jake Bartlett — Truist Securities — Analyst

Okay. And just lastly, very helpful to see what kind of the EBITDA burn rate is in November. Things are going to change here in December as you talked about kind of on a year-over-year basis being much lower just because they’re high volume weeks and months. But can you help us out on really from a free cash flow level and that’s kind of including your deferrals, interest expense, what do you think the EBITDA might be? But just trying to understand how — what kind of cash burn you expect in the fourth quarter. Maybe it’s a wide range but just trying to get a better idea of that.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Yeah, Jake. This is Scott. I’ll give you a little bit of color as we saw because of the November numbers come in with EBITDA of about $11 million loss. And so, as we kind of look at the month, our cash burn was between $3.5 million and $4 million. And so, we do expect naturally to have a little bit higher cash burn. And I think a couple of things to think about is, our rent deferrals that we have out there. So that will be a little bit of a drag on cash. But the other thing is, we’re really having some pretty good success of paying down our deferred payables outside of rent. I mentioned that we should have around $6 million remaining at the end of this year and then also the potential of another $1 million or $11 million or so from the CARES Act. So, I think keep those things in mind. But just from an operational standpoint, depending on what your estimate of EBITDA is, take that kind of example from November. And hopefully that kind of helps you to kind of model out what we may see in the future.

Jake Bartlett — Truist Securities — Analyst

Great. That’s very helpful. I appreciate it.

Operator

We’ll take our next question from Jeff Farmer from Gordon Haskett. Please go ahead.

Jeff Farmer — Gordon Haskett — Analyst

Q — Jeffery Daniel Farmer — Thank you very much. I’m just curious if you guys can provide some color on the impact that what looks like a pretty significant drop in special event a large part of bookings will have on your fiscal fourth quarter same-store sales. A – Brain: Well, as Scott said in his prepared remarks and I did too really, I was going to — it’s going to have a pretty significant impact. December special events represents about 15% of our overall sales in the month of December. And that business early on, we were actually booking some events. We geared up a small team to — in some ways think happy thoughts that things would be a little bit better. We kind of lost that bet a bit. And so we’re not expecting to have a particularly big special events calendar here over the course of the holidays. And so that’s a pretty big headwind. And as you know, our overall party business for the full year is around 10% of overall sales. So, even the index is that we’re talking about and we’re disclosing pretty transparently here, those are — we’re generating those numbers in the face of special events business that’s in the high single-digits in terms of mix with really no business. That headwind is going to get a little bit of figure here as we hit December. Okay. That’s helpful. And then, you also — I believe mentioned sort of the early entry into a third-party delivery. Anything you can share with us in terms of how impactful that’s been, delivery sales mix in the stores that offer delivery?

Margo L. Manning — Senior Vice President and Chief Operating Officer

So — hi, this is Margo. So I’ll take this one. So, just starting with, we are an entertainment brand first. But in terms of third-party delivery, it’s a — it’s low cost, low risk. And so it makes complete sense for us to enter into this space. And for us, we view it as being incremental. We’re early days into it. And so, we’ve rolled it out in December. We’re talking literally being live on it for about 2.5, 3 [Phonetic]. We’re working on additional with those concepts because we do feel like there is going to be an opportunity for us to expand this, in addition to experimenting with promotion and marketing, because again, it’s going to be sort of new space for us.

But it’s early for us to really comment on its impact. But just recognize the fact that for us we’re an experiential brand and that’s what the consumer is going to be looking for us. So this is a incremental but probably not a game-changing incentive to address.

Jeff Farmer — Gordon Haskett — Analyst

Okay. I appreciate that. And just one final question, and I believe you guys — sort of the math works out to 15 stores that have been closed in recent weeks. And obviously you’ve outlined an expectation for potentially some additional stores to close with some of the intensifying mitigation efforts. But the question is, where would you theoretically expect those closures to take place from a state perspective?

Brian A. Jenkins — Chief Executive Officer

Well, we had a couple today, and that’s…

Margo L. Manning — Senior Vice President and Chief Operating Officer

Yeah. They’re kind of coming — certainly rollbacks in terms of hours or even limited service we’ve seeing coming at us, and…

Brian A. Jenkins — Chief Executive Officer

We had a few in Maryland today.

Margo L. Manning — Senior Vice President and Chief Operating Officer

Yeah, Pennsylvania.

Brian A. Jenkins — Chief Executive Officer

I think Northeast, Mid-Atlantic…

Margo L. Manning — Senior Vice President and Chief Operating Officer

[Indecipherable]

Brian A. Jenkins — Chief Executive Officer

…we just had some fall. And we have been eyeing some stores in the Midwest that actually we’re expecting to fall earlier and they haven’t yet. But this is really hard to say. I think we feel like it’s going to get a little worse before it gets better, and we’re going to lose more stores. The 90 we have today, lost 2 today. So we’re going to see a further dial back here, I suspect.

And that said, again, I’m not trying to minimize it, but I do view this as a temporary setback here. And we’re just — I think the line of sight for us is much better today than when we were facing rollbacks and shutdowns of the entire brand back in March. I mean, there was a lot of optimism around — a vaccine that’s on the horizon here. I don’t think we’re going to alleviate thing and nobody really does. But there’s a brighter future in 2021. I think a way forward to get our store base open.

And in my view, when we get these open the next time, some of this stop and start close activity that we’ve seen and been dealing with over 2020 which has been very difficult. I think we’re pretty optimistic that when we get these stores open again, we have a pretty good shot that they’re going to stay open and we’re on a path to just better days and what we’re sort of encouraged about is even with COVID still running all around the country. Now we had our peak in October at the top quartile, as I said, at 90%. That’s very encouraging. We’re really confident that we’re going to bounce back. We just got to get these stores open. We got to weather the winter here. And we’re — as I’ve said, we’re very hopeful for next year.

Jeff Farmer — Gordon Haskett — Analyst

All right. Appreciate that. Thank you, guys.

Operator

We’ll take our next question from Andrew Strelzik from BMO. Please go ahead.

Andrew Strelzik — BMO Capital Markets — Analyst

Hi. Thanks for taking my question and I hope everyone’s doing well. I’m curious about — I’m curious what you’re seeing in some of the stories that were farthest along in the sales recovery. So whether that’s the 15 or 20 or so from the deck that you provided in mid-October about that — 100% or close or maybe the top quartile that we’re at 90% sales index. If you could just kind of compare and contrast how the business looked versus a year ago before the pandemic, where were the margins relative to a year ago for those stores, what did the demographics look like, what did the business mix look like? And any other color and nuances that you can share would be helpful.

Brian A. Jenkins — Chief Executive Officer

A lot of questions.

Andrew Strelzik — BMO Capital Markets — Analyst

Just one overarching question.

Brian A. Jenkins — Chief Executive Officer

So, it terms of the stores that were performing the best over the course of COVID with, I’m sorry. Florida and the Southeast were the states that were really performing the best for us. And those are the ones really getting close to 100% if you look that on our website. So, with what we had done in terms of the lean operating model, those — some of those stores were actually performing better than they were in 2019. So that’s sort of the good news.

In terms of what’s happened recently with this resurgence, really all boats are declining here are dropping also at levels across the states of Florida, South Carolina, some of those locations Georgia that were performing so well, they’ve gone back quite a bit now. And again, we think it’s temporary — it will be temporary but they’re suffering right now and a number of the other questions were.

Andrew Strelzik — BMO Capital Markets — Analyst

That was pretty much it.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

The demographics are — where I think Margo [Indecipherable], we’re still seeing a little more adult, a little more male, I think, but…

Margo L. Manning — Senior Vice President and Chief Operating Officer

And then the families start to come back after the stores have been open for a while. We start seeing them sort of settle back to the pre-COVID sort of gateway. But initially when they opened, it does look a little different.

Andrew Strelzik — BMO Capital Markets — Analyst

Okay. Great. That’s very helpful. And then, the competitive environment, competitive intrusion had, before COVID, been very key theme for the business. And you think that that kind of how that could change moving forward. I’m just curious. Have you been able to kind of quantify or dig in on kind of what you’ve seen so far from a closure perspective or how you expect that to evolve as we kind of move forward over the next couple of years?

Brian A. Jenkins — Chief Executive Officer

So — we quite apologize [Technical Issues] on closures here?

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Competitive.

Brian A. Jenkins — Chief Executive Officer

Competitive closures?

Andrew Strelzik — BMO Capital Markets — Analyst

Yeah.

Brian A. Jenkins — Chief Executive Officer

We’re tracking kind of the competitive set right now. And I think you are and many others in terms of what we’re seeing, there’s a mixed bag right now in terms of the competitive set we have. Some of the ones that we’ve talked about in recent years, Main Event and Top Golf in particular that are largely open right now. And then, there are others where some of them are largely closed down. So it’s definitely a mixed bag. My feeling is that we’re all grappling with store closures, softer demand, dealing with liquidity issues. And so, my feeling is that we’re going to see and we definitely saw a rollback and a decrease in store openings certainly. We did that. Others did that as well.

I think we’re going to see a bit of a slowdown as people are really trying to concentrate on their core business. That’s definitely what we’re going to do. We are going to concentrate — our best path to recovering as a brand is getting our existing store base reopen and driving profitability in the business. And so that’s what our focus is. And I would expect that that’s going to be a bit of the focus here for some of these other brands. And I do think there’s going to be a shakeout of a few. And we’ve already seen some of that with a couple of our competitors.

And I do think with this resurgence, some of the coming soon signs you might see on the websites, I wouldn’t be surprised to see some delays in those — in that pipeline. We’re going to be very — we’re internally going to be very measured about our store development pipeline. Again, concentrating on getting our store base open. That’s the clearest path for recovery for us. And I think we — and I’ve said this before on these calls, guys, that I’m very confident that we have one of the best operating models out there in this competitive space in terms of AUVs, margins, returns on a pre-COVID basis. And I think that’s serving us really well right now. And we’re doing it, I think, better than we ever have in terms of being nimble.

And I’m not sure the entire competitive set has that same situation because most of those models, I don’t think were as strong and as solid as ours coming into COVID. So we’re going to concentrate on what we’re doing and we’re going to do it the best we can do. And I think that’s going to position us really well

Andrew Strelzik — BMO Capital Markets — Analyst

Great. Thank you very much.

Operator

We’ll now take our next question from Andrew Barish from Jefferies. Please go ahead.

Andrew Barish — Jefferies — Analyst

Yeah. Thanks, guys. Happy holidays. I hope you get a little break there coming up. A couple of quick ones on just actually looking back and trying to understand a little bit of the ramp in the 3Q, there was a big jump in the store sales index September from August like 20 points. So I’m just trying to get a sense of what was going on there? Is the changes in schools or was it just kind of the momentum of adding some stores and having additional ones open? It just seemed like a big jump.

Brian A. Jenkins — Chief Executive Officer

Well, I mean, we were seeing — I mean, if you kind of roll back the tape and — I think we have all that made out there, right. We showed the weekly? Okay, we showed months. But we — with the resurgence that happened in June and July, we dialed back pretty quickly and sharply there. And then, it was a pretty steady progression through the month of August moving up. And then, in September, we were back on air and on TV really for the first time in a long time.

So, we came out with a new brand campaign, launched that in September, we were on air. I want to say five weeks is a meaningful investment. These were some dollars that we were unable to cancel. And it actually was a perfect timing for us because some of the fears were subsiding at that time. The consumer appetite was improving and we had more stores opening. And it was sort of the perfect combination in September, more stores open and we had dollars and we put them to work.

Right now, we’re not — we actually delayed and cancelled some plans that we had for media here over the holiday season, really looking to sort of save that powder for a time when COVID fears are actually waning not increasing and the appetite for guests to get out is not something we’re swimming upstream on, which I think is what’s happening right now. But I think that was helpful for us in September.

Andrew Barish — Jefferies — Analyst

Yeah. That’s helpful and understanding that as well. And then, secondly, on the programming side of things, as obviously it’s been difficult for fans to get out to sporting events, do you — have you seen kind of noticeable increases on those weekend sports, football, games, etc? And how are you thinking about the WOW Wall rollout in light of that as you look out to 2021?

Brian A. Jenkins — Chief Executive Officer

Yeah. I mean, we performed well on those days. Thursday has been a little tougher for us as we had Wings [Phonetic] working for us in the prior year. It took a little bit differently really for us. And we’re not really discounting materially right now. Our — we don’t have plans at this point to further rollout WOW Walls. We did pick up about 50 of them out now.

Our view at the moment, number one, we’re going to be very conservative and cautious with the capital in this environment. But we’ve got to go to work on building the programming muscle in this company. We have a lot of assets here. We have big facilities. Sports could be — we can improve on our sports offering and what we’re doing around that from an experience standpoint. And we’re going to be focused on that and we’re looking to see what other things we can do to drive frequency and the reason to visit within our stores. So, the programming engine is, I’d say, we’re running on a few cylinders right now. It’s a muscle that we’re trying to develop and get out. But I think as an entertainment brand that is trying to get beyond an arcade, this is a natural fit for us just like sports. It was a natural fit for us.

Just thinking about how we can create events and reason to visit over the course of a calendar and a course of a month and year. So, our SVP of Entertainment, Kevin Bachus, is leading that charge. I’d say, we’re in pretty early innings and we focused on sports here obviously in the football season, tough read here. 2020 is the year, I want to get out of that and be done but a little — it’s really tough to read that kind of stuff what that’s kind of look like.

Andrew Barish — Jefferies — Analyst

Okay. Thanks for the — thanks for the color.

Brian A. Jenkins — Chief Executive Officer

Thank you, Andy. Be safe.

Operator

We’ll now take our next question from Chris O’Cull from Stifel. Please go ahead.

Chris O’Cull — Stifel — Analyst

Hi. Good afternoon, guys. Brian, given you guys have seen storage go through one or two cycle of closing and reopening, what factors do you think influence the strengths of sales recovery when a store reopens?

Brian A. Jenkins — Chief Executive Officer

Well, I think some of it’s fundamentally in the market itself. I mean, there — we’ve definitely seen a stronger appetite for our experience in the Southeast. Those stores developed out quickly, pretty quickly. And many of the stores in the Southeast got — some of them actually were surpassing prior year over the course of — not recent weeks, but so — and I think some of the Northern states and Midwest states have been a little more difficult for us. So I think some of this is the underpinnings of COVID fears in the particular market because we’re really not running really a different playbook when we open. So it’s not unnecessary something we’re doing differently in different markets. It’s a little more about consumer appetite, I think.

And I think, the good news is when you look at the recovery curve that’s out on the website and the maturity curve. By and large, the good news is, they all have an upward trajectory. And we feel very confident that we’re going to be able to get all of our states when we get past this thing back to a really good place. Some of them may get there quicker, but we’re pretty darn confident. A good example of that is, when we opened California, we went up in there for more than three weeks but they opened and shut. Those stores opened up at a 30% index in their first week of operation. That’s actually one of the highest opening week indexes we had in any state. So we’re really optimistic that people want to get back to their everyday lives and actually we think that’s going to happen everywhere eventually.

Chris O’Cull — Stifel — Analyst

You guys mentioned increased labor costs in the fourth quarter to recall some key store leadership positions. I’m trying to understand the sales level you’re anticipating and when you expect to see that sales level to determine how many of those employees to recall?

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Yeah. Let me explain that a little bit here. We — there’s really two pieces of this. A month or two ago — what months are those? October — end of October?

Margo L. Manning — Senior Vice President and Chief Operating Officer

Yeah.

Brian A. Jenkins — Chief Executive Officer

End of September actually. Early October, we made the decision to bring back our core leadership team in our New York and California stores. Those stores represent 25% of our overall sales base. They represent about 20% of our units and those stores were going on six, seven months of being closed. And there’s nothing more important for us right now than being able to reopen our stores quickly and effectively.

So, we brought back a small team in each of those stores to make sure we could preserve our ability to reopen. And that when you’re closed that long, if you have to start with a brand new leadership team. you’re in trouble and that — this is a win the battle and lose the war kind of thing. And we were going to win that — we were going to try to win the labor battle and lose the war on being able to reopen. So we brought those folks back, a team of folks. And then, as we’ve reclosed the 15 net stores that Scott mentioned, we are not planning to course correct and have a significant furlough at this time.

We think this is temporary and we need to make sure that when the time comes to reopen, which we think we’re going to get some of these stores back open after the holidays and then California, New York, we think can take longer until really our first quarter of next year or early next year. We have to have our eye on that. That’s really important. It’s imperative really. We don’t bounce back. We don’t recover and we’re not going to save our way to profitability here. We’ve got to have sales. We’ve got to get these stores on.

Chris O’Cull — Stifel — Analyst

I agree. And then, one last one. Just with the addition of those positions being filled and ramping operations back up during the quarter and some of the other investments you mentioned. Did you guys provide an update to your EBITDA breakeven target at the enterprise level? I think previously you’ve mentioned something like sales being at 45%, 50% breakeven. So, any new updates to that?

Scott J. Bowman — Senior Vice President and Chief Financial Officer

No, we would — yeah, I sort of confirmed it in my prepared remarks today or reaffirmed it. We have — if you look at October, we were pretty close to breakeven in the month of October. Just — we were at an EBITDA loss of $3 million [Phonetic]. And you could calculate that if you look at what we’ve disclosed close out there. So, no new news here. So we were really close in the month of October. As I mentioned, our comp recovery index was — we had a 68% index late in the quarter and had about 75% of the chain open. So, we feel really confident that when we get to 50% to 55%, we’re going to be in that enterprise level breakeven and then to profit.

Chris O’Cull — Stifel — Analyst

I apologize. Index for the fourth quarter as well?

Scott J. Bowman — Senior Vice President and Chief Financial Officer

I’m sorry?

Chris O’Cull — Stifel — Analyst

I meant, for future — for the upcoming quarter not the third.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

No, we’re not. No — as we said, we were close to it.

So we’re confirming that when we get to 50%, 55% we think when profitable, that’s not going to happen in Q4. We’re discussing several, we’re seeing rollbacks, we were just gearing in October, we’re seeing rollbacks in November. So the profit recovery index going wrong way on it and more of the change is being more of our store base has been shut down right now. So we’re going in the wrong direction.

Chris O’Cull — Stifel — Analyst

Scott, what is the comp for November for that.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

For November, it is negative 69% yeah.

Brian A. Jenkins — Chief Executive Officer

So we’ve got an index of not close to get to 55% of 2019. So we’ve got ways to go.

Chris O’Cull — Stifel — Analyst

Okay, thank you.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

I think one of the way to think about it Chris is, as you know, as we do get the ability to start re-opening stores again, I mean we’ll have some of this infrastructure and some of these people in place already and so it won’t be — have as much variable cost adding on because we are taking care some of the repair and maintenance and things like that and with the store leadership being here, there will be some add backs, but we have a pretty good base to build from.

Operator

And we’ll go ahead and take our next question from Brian Mullan from Deutsche Bank. Please go ahead.

Brian Mullan — Deutsche Bank — Analyst

Hey guys, thanks a lot. You touched on sports as an opportunity earlier, but I was curious, does the legalization of sports betting across the country, does that offer any opportunities to drive increased traffic to the stores over the long-term. Are you devoting any time or resources to exploring that opportunity right now. Is there an opportunity.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Yeah. Short answer is, there is an opportunity and we are devoting resources to explore that. We kind of offers to our SKU of entertainment, is in discussions with a potential partner. We’re deep into those discussions and we think it is potential fit for us and I don’t have any more to report on that right now. But hopefully, as we hit our next call, we’ll have a little bit more to report out on that.

Brian Mullan — Deutsche Bank — Analyst

Okay, great. Thanks. And then earlier you touched a bit on the competitive environment, some of your competitors, but just in terms of your own unit growth coming out of the pandemic, are you — same kind of question, are you devoting resources and time thinking about what the pipeline could look like for Dave & Buster’s. In big picture, do you anticipate being a net unit grower concept once again when we get out of this time period.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Short answer is eventually. But if you look at this year, we went out in six stores. We are well on our way with virtually every one of those stores, so it makes sense to wrap those up, limited capital remaining, and we have one last thing based here in the fourth quarter and I will take six. As I look at 2021 and what our team has on the play, our first priority is not be opening of new stores that we often need of a significant portion of the chain. And as I said before, my view is that declared the quickest path to the financial health and recovery of the design. So we will be prioritizing new store growth in 2021 and we must prioritize the recovery and the reopening of the brand and that’s not as long as some of these stores have been down, particularly California, New York. We’re coming up on a year, it feels a lot like a reopening, right Margo.

Margo L. Manning — Senior Vice President and Chief Operating Officer

Yeah, it does.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

And that is why we’re bringing back a small quarter of leadership team to make sure we preserve that ability. But there’s still a lot of listing to get hourly team members that are going up to do other things, rebuild the store. So that is our top priority and our view also is, as we have gotten the stores back up and our bench strength is not what it wants to us, we’re operating the stores right now at a fraction of the prior team typically nine to 10 folks and we’re in average around five right now. So our bench strength actually five new stores, been hurt by this right now and then we’re going to watch liquidity. We want to see a better line of sight of more of the store based back on plan and we’re back on a cost recovery path that is healthy, like what we are seeing prior to this recent resurgence. So there will be a time for acceleration. I don’t view that as 2021. We have a good solid pipeline right now. In 2021, we are going to give locations that we have under lease that we’re working with our landlords in terms of the timing of those. So we still view the US as a great market for us with lot of potential. We have some in our pipeline, we think there’ll be possibly a lot coming up to in the current real estate environment. So we will say that at some point it’s not going to be the pivot here early in the 2021.

Brian Mullan — Deutsche Bank — Analyst

Thank you.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

You bet.

Operator

We will now take our next question from Joshua Long from Piper Sandler. Please go ahead.

Joshua Long — Piper Sandler Companies — Analyst

Great. Thanks for taking my question. Hope everyone is doing well. One of this, more of a point of clarification, I understand that some of the stores are closing back due to the restriction. Curious what the opportunity is or if there is a need to revisit the idea of which diclosures would be not temporary but permanent in terms of just optimizing the overall portfolio.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

Joshua, that is a good question. I think the good news for us and I think we’re maybe one or few brands that can probably say this, we had a very healthy store base overall prior to COVID. All our stores, EBITDA positive and we have in this environment, we have closed the stores, one at Chicago, one at Houston. We have made the Chicago call prior to COVID, older store markets moved away from the location, it was profitable, but we have made a decision we just felt that not to reopen it and then we closed Houston, which is our oldest store right now or was our older store in the fleet. We have a sister store five miles away closed and on lease, just made sense we expect it to be accretive because of the transfer to the sister store. So at this point, I don’t plan to make any long-term closure decisions based on short-term results in disruption that we’re seeing, I think we’re going to want to see how the stores recover. And so we don’t, we have plans to close any other stores at this time.

Joshua Long — Piper Sandler Companies — Analyst

Understood. Then my follow-up question would be lots of interesting opportunities and initiatives about extending the brand into new channels, whether that’s through the third-party delivery, virtual brand and then it sounds like Kevin and his team are quite busy on some different pieces as well, but curious on if we think about work from home being a larger piece incrementally or relative to how consumers spent time pre-pandemic. Is there an opportunity to extend the gaming piece that you guys have a leadership in as a category into mobile or into the home as well. Is that something that makes sense and how do you think about kind of engaging with guest on that core brand equity if we’re all going to be spending time and have our consumer travel patterns a bit disrupted versus we think as an opportunity.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

It’s a really good question. Today, our focus is in-store experiential and I think we have a lot of opportunities to improve our lives there right now and that is where we’re focused. So I can say we are actively looking at that at this point. So I think we have a lot of heavy lifting around the in-store experience right now and that’s where the team is focused and I would say that we have a lot on our plate right now and a small team and I think we’re focused on the right things. When you look at how people have responded in these markets, how much they want to get back out of their house and not be in their home sitting in around, I think that’s where we’re going to focus our attention.

Joshua Long — Piper Sandler Companies — Analyst

It makes sense. Thank you.

Operator

We’ll take our next question from Brian Vaccaro from Raymond James. Please go ahead.

Brian Vaccaro — Raymond James Financial Inc — Analyst

Thank you and good evening. Good to catch up with everyone. Hope everyone’s doing well. I wanted to ask a question on the changes you’re making to the menu. And I understand you’re adding the items back and I think you said you expected to settle for around a third fewer items, but can you help us understand where some of the more meaningful reductions have been, were there specific categories that were removed or will it be more sprinkled throughout the menu, just trying to understand how you view sort of that food and beverage experience and how that looks post COVID versus where you were in 2018 or 2019?

Margo L. Manning — Senior Vice President and Chief Operating Officer

Hi, this is Margo. So, I’ll start and Brian can chime in. For us, when we get the research, one of the things that came out was, again, just say strong interest in appetizer, but in the main menu, you will see that we’ve had done some significant work with the new items along the category of appetizers, but every aspect of the menu has an impact. And really what the objective was is to get to very few very good items that we could execute well to out to the guests quickly. And so at the end of the whole rollout, when we hit 28 items, we’ve distilled it down so that there is enough variety that you don’t have a veto vote, but that it is really tightly curated to enable the perfect operational execution.

Brian do you want add anything to that?

Brian Vaccaro — Raymond James Financial Inc — Analyst

Okay, that’s helpful. And I guess shifting gears a little bit, but trying to think about the more efficient labor model in a post-COVID world, can you maybe expand and perhaps quantify some of the benefits you expect from the streamline menu in the back of the house, things like prep, and that sort of thing. Also, the kiosks and the server handhelds how that will impact the house labor model?

Brian A. Jenkins — Chief Executive Officer

Yeah, we’re still working through that Brian. If you look at kind of the numbers that we’ve put up, and you know, architects sitting right across from, Margo, in terms of what the operators have been able to accomplish, right now, in terms of managing labor. It’s quite remarkable that, you know, we’re having the kind of declines in sales, which will typically result in a significant de-leveraging event and hours of labor. It’s not all variable, we have, you know, a store within a store, and when we have game tech, there’s a semi-fix to fix elements, some of that and we’re running that very efficiently right now. Hourly labor, you know, sort of flattish. If I recall for the third quarter. So, you know, that’s a really good outcome.

And some of the things we’re talking about, some of the technology kiosks, and mobile devices, you know, will be helpful, but I think some of that stuff is going to be a lot more helpful in terms of speed and execution for putting in a little less necessarily about efficiency. I think where we’re winning the battle right now is we’re just being very thoughtful and we’re not going to be able to keep all this on how we’re scheduling off peak, and it’s up and down. Essentially every job code within our — from front of house, back to house to front desk to win, game tech and being very nimble and off peak. So we’re going to try to carry as much of that that we feel is appropriate that doesn’t damage the guest experience. And I think we’re going to add some stuff back eventually, for sure. But I think — and I’m going to stop, because we’re not going to get into the guidance on how many bips we think we’re going to get in 2020, 2021 right now, or any of that stuff.

Brian Vaccaro — Raymond James Financial Inc — Analyst

And are you thinking about on the manager side? And correct me if I’m wrong, but I think the historical structure was the general manager and maybe 10-ish managers throughout the unit on average, please correct me if that’s not right. But I know it’ll be fluid, but what might that structure look like? Are you thinking about changing the mix of salaried versus hourly managers, maybe Team Leader type positions, just trying to get a sense of how you think that might settle out in a post-COVID world whenever sales recovered towards a normal level?

Margo L. Manning — Senior Vice President and Chief Operating Officer

Hi, this is Margo. I’ll just jump in on this one. So one of the things about this COVID world and it has presented the opportunity for us to look at every single thing that we do. And so when you look at the savings, the savings did not happen by accident, we have literally looked at every single spend in the store and evaluated whether or not we will keep it or whether or not we will permanently eliminate it. And so we will definitely see us look at the management structure. Just as we are every single, you know, line item that is going on in the store. And so when we talk about sustaining some of the improvement in 2021, it’s impossible to take the learnings that we’ve had this year and not keep some of them because you learn. And so what we’re doing is trying to make sure that we are selecting the efficiencies that are truly good efficiencies without diminishing any aspects of the guests experience. So in terms of the management structure, of course, we’ll be looking at that, just as we’re looking at the hourly and we’ll put them both through the same lens to ensure that we can get the experience that our destiny and that we’re doing it thoughtfully and efficiently. So that’s something we can expect in 2021.

Brian Vaccaro — Raymond James Financial Inc — Analyst

All right, that’s really helpful. Last one, just from me, thinking about the sales index and the next couple of months, can you remind us in a normal year, how much higher are sales volumes or average weekly sales in December versus the shoulder months? And I’ll pass it along. Thank you.

Scott J. Bowman — Senior Vice President and Chief Financial Officer

I don’t have that. Yeah [Speech Overlap]

Brian A. Jenkins — Chief Executive Officer

Yeah, it’s a good question, Brian, and the December and March really our two biggest month. And if you look at December, I mean versus kind of an average weekly sales across the entire year, it runs about 15% higher than that.

Brian Vaccaro — Raymond James Financial Inc — Analyst

Okay, great. Thank you.

Operator

And we have no further questions. I will pass it back over to our speakers for any additional or closing remarks.

Brian A. Jenkins — Chief Executive Officer

Okay. Thank you, Ali. Guys, thank you for joining our call today. We wish you and your families a safe and healthy holiday season. And we look forward to seeing you at a D&B location really soon here. So, have a great night.

Operator

[Operator Closing Remarks]

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The market rally gathered pace this week amid impressive quarterly results, led by the banking sector, and positive economic data. Leading stock indexes continued their winning streak, with S&P 500

Undeterred by crisis, Bank of America stays in expansion mode

Leading Wall Street banks recorded robust earnings in the early months of fiscal 2021 with the results benefiting from the release of credit loss reserves, in most cases. Taking advantage

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