Dave & Buster’s Entertainment Inc. said its special-events business continued to recover toward pre-pandemic levels in the fourth quarter and that traffic was accompanied by “strong comparable walk-in sales growth,” executives said Tuesday.
The Coppell, Texas-based company, which owns the Dave & Buster’s and Main Event big-box entertainment venues, posted earnings for the fourth quarter ended Jan. 29, noting that combined same-store sales increased 19% compared with the same period in 2021 and 14.1% compared with the same period in pre-pandemic 2019.
In the first quarter of 2023, Michael Quartieri, Dave & Buster’s chief financial officer, said same-store sales have “been pretty much relatively flat to this very low single-digit number that we've seen on the quarter-to-date basis through the end of last week.”
Chris Morris, Dave & Buster’s CEO, told analysts that special-events traffic had initially lagged the rebound of walk-in business as the pandemic receded, but “we are encouraged by the continued momentum of our special-events business.”
Quartieri noted that as special events have a higher food and beverage component, which yields slightly lower margins than amusements.
“We are seeing an uptick in food and beverage as a percentage of the overall revenues,” Quartieri said. “Food and beverage revenue does have a slightly lower gross margin than amusement, so just the pure mix shift will put a little bit of pressure on the overall margin on a status quo basis.” The impact was being offset by operational improvements, he added.
Morris also said the brand this week launched a $29.99 Slam Dunk deal, which included a $20 amusements card and choice of entrée from our watch menu.
The company is also leaning into its loyalty program, he said.
“We are more aggressively leveraging D&B Rewards and our growing loyalty database of 4.5 million members to efficiently communicate with our guests across all occasions,” Morris said. “We are building out our data and digital innovation capabilities to drive relevancy, media efficiency and tech-enabled hospitality with the Dave & Buster's brand.”
The Dave & Buster’s corporate team continued to work on the merger of Main Event, the acquisition of which was completed in June.
“We have now implemented all the initiatives necessary to achieve $25 million of annualized cost synergies, exceeding our original target by $5 million,” Morris said. “We are extremely pleased that we were able to achieve these synergies and do so ahead of schedule.”
For the fourth quarter ended Jan. 29, Dave & Buster’s net income rose to $39.1 million, or 80 cents a share, up from $25.6 million, or 52 cents a share, in the same quarter last year. Revenues increased to $536.8 million from $342.1 million in the prior-year quarter, with food and beverage revenues rising to $203.6 million from $120.1 million in the prior-year period.
Dave & Buster’s Entertainment, founded in 1982, owns and operates 207 venues in North America under the Dave & Buster’s and Main Event brands. The company has 152 Dave & Buster’s in 41 states and 55 Main Event venues in 18 states.
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