Dave & Buster's Entertainment (NASDAQ: PLAY) stock soared 5.00% in pre-market trading on Tuesday, following the company's Q4 2024 earnings call where management outlined a turnaround strategy and reported improved recent performance.

Despite disappointing Q4 results, with comparable store sales decreasing 9.4% year-over-year, the company's leadership expressed optimism about the future. Interim CEO Kevin Sheehan highlighted "markedly better" results in March and April, driven by increased traffic and improved food and beverage sales. The company is implementing a "back to basics" approach, reversing previous strategic missteps and focusing on high-confidence, low-risk improvements.

Key elements of the turnaround plan include reintroducing TV advertising, returning to successful promotional activities like the Eat & Play Combo, and rolling out new games such as the "Human Crane" attraction. Additionally, the company announced a more disciplined approach to capital expenditures, with expectations not to exceed $220 million in fiscal 2025, down significantly from $357 million in 2024. This renewed focus on converting operating cash flow to free cash flow has apparently resonated with investors, contributing to the stock's pre-market rally.