Dave & Buster's Entertainment Inc., also parent to the Main Event brand, has moved into another phase of its food and beverage menu improvements, the company said Tuesday.
Executives at the Coppell, Texas-based entertainment and foodservice company, which reported earnings for the Feb. 4-ended fourth quarter and full 2023, said continues to see opportunities in menu improvements.
“We know our company has lost attachment over the past decade,” said Chris Morris, Dave & Buster’s CEO, in an earnings call. “We believe the steps we are taking to improve our food offering and service model will go a long way toward recapturing our historically higher levels of attachment.”
Morris said the phases of menu improvements are being introduced strategically with a systemwide remodel program.
“In the first full quarter of its rollout, we continue to experience material gains with our Phase 2 menu, which enhanced operational execution by removing unnecessary complexity in the back-of-house, improved overall food quality, and accelerated speed of service to drive more throughput at peak,” Morris said.
“Since the systemwide launch of Phase 2, we have been testing Phase 3 of our D&B menu of the future in 10 stores and unveiled the final plans and training internally at our Annual General Managers Conference in early March,” he said.
“The Phase 3 menu aims to introduce targeted culinary innovation around appetizers, bowls, desserts and sides that aligns with our new hospitality model and better meet the need states of our guests to drive our attach rate,” Morris said. “Just last week, we rolled out our Phase 3 menu to roughly one-third of the Dave & Buster's system., and we'll launch it to the remainder of the system on April 15.” Phase 2 of menu improvements launched systemwide on Sept. 25.
He said test results for the Phase 3 menu led the company to expect to drive at least a mid-single digit increase in food and beverage revenue per check.
The store remodel program began about nine months ago, Morris added, with the first test location in Friendswood, Texas, southeast of Houston. The company has completed eight additional test remodels, he said.
“For the test, we intentionally hand-selected a variety of our stores across geography, legacy performance, store age and layout, and tailored key product offerings,” Morris said. “On average, these test stores have outperformed the balance of the system by 9% post remodel through March.”
Morris said the Friendswood remodel would be expanded across the next 35 remodel stores, with a target of 20%-plus return on investment.
“We will have a total of 40 to 45 stores remodeled by the end of fiscal '24, which we are confident will drive a similar outperformance,” he said.
As for emphasis on the economy, Michael Quartieri, Dave & Buster’s chief financial officer, said “the choppiness we've seen is really from a visitation perspective, but once people are in the door, they're still spending at the same levels, they've always spent.”
Morris said the company has its eye on consumer uneasiness and it can pivot to value offerings when needed.
“We've introduced $2 beers that timed with the NCAA tournament, we have all-you-can-eat wings and on Thursday, both of those are going very well. And we have Kids Eat Free that’s really aimed at families. We feel good about that,” Morris said. “And we’ve got an offer that we’re going to be announcing here in a couple of weeks that we think really kind of hits a lot of the things that we’ve been doing strategically that also addresses value.”
For the fourth quarter ended Feb. 4, Dave & Buster’s net income was $36.2 million, or 88 cents a share, compared to $39.1 million, or 80 cents a share, in the prior-year period. Revenues in the fourth quarter were $599.1 million, up 6.3% from $563.8 million in the same period last year.
Combined same-store sales, including Main Event, declined 7% compared with the same period in 2022, the company said.
During the quarter, Dave & Buster’s opened six new domestic stores. In 2023, the company opened 16 new stores: 11 Dave & Buster's and five Main Events. The company also signed development agreements for two venues in the Dominican Republic, taking the international pipeline to 33 locations.
Dave & Busters, founded in 1982, owns and operates 223 venues, including 164 164 Dave & Buster's branded stores in 42 states, Puerto Rico, and Canada and 59 Main Event branded stores in 20 states.
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