The omicron surge took a bite out of Dave & Buster’s sales, but the eatertainment chain said Tuesday that it’s seeing strong momentum as the pandemic improves and its operational efficiencies continue.
“Other than the omicron, this business is on fire,” interim CEO Kevin Sheehan told investors, noting that the chain’s fourth quarter same-store sales were up 7.6% until the covid surge hit and caused same-store sales to fall 12.2% for the rest of the period.
Similarly, first quarter same-store sales started out down 8.3% but have surged 13% in the last five weeks, Sheehan said.
Now that omicron has subsided, he said, “You can understand why we feel good about where we’re going as a company.”
Dave & Buster’s stock price was up about 15% mid-day Tuesday on the solid earnings news.
The Dallas-based food-and-games chain ended the quarter with 142 locations, which included one new store opening. Revenue decreased 1.2% from the same period in 2019 to $343.1 million, for the period ended Jan. 30. Same-store sales declined 2.6% over the same period in 2019.
For the full year, revenue fell 3.7%, to $1.3 billion, compared to 2019, and same-store sales fell 10.6% compared to 2019.
Sheehan has served as the chain’s interim CEO since September, when Brian Jenkins announced his retirement. He said the chain hoped to announce a permanent CEO “over the coming quarter.”
“The reality is I’m 68, going on 69, and we deserve a young—younger—energetic, driven skillset that’s going to build this brand,” he said. “I think that deserves some new blood, some fresh blood, into our business.”
In the coming weeks, Dave & Buster’s will focus on boosting its late-night business with a “late-night happy hour” that features DJs and other special programming.
“We’re trying very hard to figure out the things that we can do late night with building that back to a level that people want to be there in the evenings to come and hang out with their friends,” Sheehan said.
Dave & Buster’s recently launched a long-term incentive plan for general managers. The four-year program offers significant financial boosts to GMs who produce compound annual growth rates of 3% or more.
“They own their store,” Sheehan said. “They own what goes on. They own the days of the week, the hours of the day. And we are now equipping them with a bag of tricks, of things that we can help them to be better at driving their incremental sales.”
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