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Vaccine mandates, fewer private parties bring slowing sales for Dave & Buster’s

The food-and-games chain said it saw same-store sales dip in Q3 in markets that required patrons to be vaccinated and that its special events business remains far from 2019 levels.
Dave & Buster's
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Dave & Buster’s is blaming vaccine mandates for slowing sales in some of its markets.

The food-and-games chain on Tuesday said its same-store sales were up 1.1% for the third quarter compared to 2019, if you exclude the seven locations in markets that had vaccine mandates. With those units included, Dave & Buster’s overall same-store sales were down 0.4% compared to pre-pandemic levels.

The numbers reflect “softness due to the delta variant and associated mask and vaccine mandates,” outgoing CFO Scott Bowman told analysts, according to a transcript from financial services site Sentieo.

Dave & Buster’s, however, said it isn’t seeing much impact on its traffic attributed to the new omicron COVID variant.

“Our walk-in business continues to be very strong,” Interim CEO Kevin Sheehan said. “I think our special events business, with or without omicron, we expected that to be softer for the fourth quarter.”

Indeed, the chain’s special events business is well below 2019 levels, down 64% from pre-pandemic numbers, largely due to a major drop in corporate events. That drop led Dave & Buster’s to see a 17% drop in its food and beverage business for the quarter ended October 31, compared to 2019. That decline in special events traffic will be more impactful this month, the chain said, when holiday parties are typically held.

The brand’s sales have picked up during the early part of the fourth quarter, with same-store sales up 3.5% over 2019, with special events business remaining down 59%. Dave & Buster’s said it expects a $9.5 million impact on its bottom line with Christmas and New Year’s falling on a Friday and Saturday this year, compared with a Tuesday and a Wednesday in 2019.

Dave & Busters, which ended the quarter with 143 locations, said it will embark on a large-scale remodeling project in 2022.

Some stores will undergo minimal updates, while others will be subject to total remodels. And some units will be relocated, the chain said.

“We are also evaluating relocation opportunities in some of our legacy markets where we can open new, more efficient stores,” Sheehan said. “Think of one 75,000-square-foot store built 30 years ago in a part of town that has become less optimal and replacing that store nearing the end of its lease term with possibly two strategically located new stores in more relevant parts of town that accelerate growth in that market.”

The chain on Tuesday announced the hiring of Antonio Bautista as SVP and head of international development, to accelerate the brand’s global growth.

Dave & Buster’s is also working to fill roles in its C-suite, noting a “pending announcement” for its new CFO hire. Former CEO Brian Jenkins retired in September.

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