Dave & Buster's Inc. said Thursday that new-store performance, especially with a midsize format model, helped drive strong second-quarter results at the 59-unit high-volume entertainment-dining chain.
Dallas-based Dave & Buster’s swung to a profit of $687,000 in the second quarter ended July 29, from a loss of $3.1 million in the same quarter a year ago. Latest-quarter revenue increased 15 percent to $147.9 million in the second quarter compared with $128.7 million a year ago.
Steve King, chief executive of Dave & Busters, said on a conference call with analysts that it was the largest quarterly growth he’d seen at the company. “We attribute this milestone to strong comparable-store sales growth, outstanding new-store performance and ongoing cost controls,” King said.
The company said the revenue increase included a 5.4-percent increase in same-store sales. Same-store walk-in sales rose 5.6 percent in the quarter, and special-events business increased 4 percent. Across all stores, food and beverage revenue rose 11.8 percent, while amusements and other revenue increased 18.1 percent.
King said newer stores in Braintree, Mass.; Nashville, Tenn.; Oklahoma City, Okla.; and Orlando, Fla., helped boost the most recent quarter’s revenues.
“I’m especially excited about Oklahoma City,” said King, adding that it's the first of the new 25,000-square-foot format stores.
Prior to the Oklahoma City store, Dave & Buster’s small-store format had been in the range of 15,000 to 17,000 square feet, he explained.
“It’s very clear to us at this point that a 25,000-square-foot store is much more able to accommodate the volume that we see and the peak loads that we see in our business,” King said. Those stores with less square footage saw huge openings and then business backed off more rapidly than in larger stores, he noted.
A second 25,000-square-foot format will open in September in Orland Park, Ill., and another smaller format store is planned for Idaho. That compares to a new 40,000-square-foot store scheduled to open this fall in Dallas, King said, adding that Dave & Buster’s portfolio will still include the large-format stores in its future-store growth.
Dave & Buster’s has been planning an initial public offering, but King said the company was watching market conditions. He added that the company would continue to update its Securities and Exchange Commission filings with quarterly earnings information.
Dave & Buster’s has 59 stores in 25 states and Canada.