DALLAS Dave & Buster’s Inc., operator of 50 casual-dining and entertainment venues, swung to a profit in its second quarter from a year-ago loss on controlled costs and higher sales boosted by consumer spending surrounding the federal stimulus checks and stronger amusement revenue.
The privately held company earned $970,000 in its latest quarter ended Aug. 3, compared with a year-ago net loss of $681,000. Dave & Buster's reduced operating expenses to 94.8 percent of total sales, versus 96.3 percent of sales a year ago. The company also reduced its interest expense by 8.4 percent in the latest quarter.
Revenue for the second quarter rose 3.5 percent to $136.2 million and same-store sales increased 1.2 percent, the company reported. Dave & Buster's said increased revenue from games, which this quarter made up 47.3 percent of total sales, made up for a slight slowdown in food and beverage sales growth, which dipped to 52.7 percent of sales from 53.4 percent of sales a year ago.
Dave & Buster's officials said in a conference call on Wednesday that the chain's positioning as an entertainment venue helped it rise above the negative sales trends afflicting many casual-dining restaurants. It added that consumer spending after the federal stimulus checks were disbursed boosted the quarter's sales, although that driver ended soon after it started.
Dave & Buster's adjusted earnings before interest, taxes, depreciation and amortization, which also excludes start-up costs and other one-time charges, increased 9.8 percent in the latest quarter to $20.7 million.
Officials provided no additional details on the company's pending initial public offering, other than to say the process was ongoing. Dave & Buster's filed for an initial public offering of stock for up to $170 million in July, but has yet to indicate the number of shares it would offer, a per-share price or the date the offer would commence.
Dave & Buster's is owned by private-equity firm Wellspring Capital Management LLC.