Despite a record first quarter, Dave & Buster’s is still waiting for its events business to pick back up.
The food-and-games chain said Tuesday that its same-store sales are up 10.9% over 2019. But that was largely driven by game play. Dave & Buster’s food-and-beverage segment saw an 8.1% decrease compared to 2019, driven largely by a continued slowdown in the chain’s events business.
Special events remain down 34.6% compared to before the pandemic, the chain said, noting that it is seeing some recovery in the segment. For the first five weeks of the second quarter, events revenue is down 27.9% over 2019, the chain said.
“Our special events business is recovering, and I’m confident that, in another few months, we will be in a much better place as the core business returns and we increase our efforts on corporate events,” Interim CEO Kevin Sheehan told analysts.
Dave & Buster’s is working to get more corporate accounts on board, to hold meetings and events at the eatertainment chain instead of in hotels, Sheehan said.
“It’s a heck of a lot better than going through a smug hotel, where you’re paying up the nose to have their event room and you buy a bottle of water and it’s an $8 kind of thing to coming and having a joyful event and coming to Dave & Buster’s and having the meeting and having food and then having everybody share in having a lot of fun in the arcade,” he said.
Although Dave & Buster’s is working to grow its food-and-beverage program, the shift to more game play has been advantageous, the company said.
“If you think about amusement and its profit margin, very little labor is in there,” CFO Michael Quartieri told analysts.
For the quarter ended May 1, Dave & Buster’s revenue increased 24.1% from the same period in 2019, to $451.1 million, a record for the 145-unit chain.
The chain said it intends to open eight new stores this year, with three during the second quarter.
It is working to grow its loyalty program, which now has 3.65 million registered users, 1.9 million of which have been active in the last six months. Dave & Buster’s said it is working on a new website, which it plans to launch late in the third quarter.
In April, Dave & Buster’s announced it would purchase food-and-games chain Main Event for $835 million. That deal has yet to close, but when it does, Main Event CEO Chris Morris will lead the combined company.
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