Dave & Buster’s, which temporarily closed all units amid the pandemic, saw same-store sales plummet 58.6% during its first quarter of the year and is now working to “claw back” to recover its eatertainment business, the chain’s CEO said late Thursday.
The 137-unit brand is slated to reopen 48 stores in 15 states by the end of the week, with plans to reopen 90 to 95 of its locations by the end of July. Barring any coronavirus-related delays, all stores are on track to open by September, CEO Brian Jenkins told analysts.
“We are fighting every day to rebuild the business and ultimately to emerge from this crisis and return our company to its leadership position in our category,” Jenkins said. “We are really optimistic about our ability to claw back."
The best-performing batch of reopened units are performing at 55% of 2019 levels, while the bottom group of stores are performing at 18% of last year’s levels, he said.
In the last week, reopened stores are averaging same-store sales at an index of 37% compared to 2019 levels.
The newly reopened Dave & Buster’s units are operating much differently than they did pre-pandemic.
The chain is piloting new technology in two stores that allow customers to order and pay through their phones, with plans to launch the contactless platform as the primary ordering and payment method in one location in July.
The Dallas-based concept is also revamping its menu, scaling back from more than 40 items to just 15 of its top-performers to ease operations for a limited kitchen staff.
Store hours are also reduced, based on each unit’s highest-volume days and dayparts, the company said. Newly reopened stores are currently operating at an average of 60 hours per week, or about 65% of pre-COVID weekly operating hours.
Dave & Buster’s arcades have been reconfigured to allow for six feet of spacing between games. Multi-player games have been taken offline.
For the quarter ended May 3, revenues totaled $159.8 million, compared with $363.6 million the previous year. The number of units increased 8%, from 127.
The chain incurred $11.5 million in charges during the quarter due to impairments at three existing stores and the termination of leases at three units in the pipeline. The chain decided to complete construction on three stores that were nearly finished and is talking with landlords about rent deferrals and abatements.
“We did decide to move forward on some stores that were nearly complete; that makes sense for us,” Jenkins said. “But the other stores that were in the pipeline, some we did terminate already. But we still have some stores in the pipeline that really are just on hold right now. They could very well be stores in 2021, but we are kind of in a wait-and-see approach right now.”
Given the current struggles of the entire eatertainment segment, though, Jenkins is optimistic that there may be some more space for Dave & Buster’s post-pandemic.
“We have seen some of our competitors that haven’t opened any stores right now or some that have opened very, very few,” Jenkins said. “I think we are going to see less competitive headwind here on the other side.”
CORRECTION: This story has been changed to correct the planned number of store reopenings by the end of July.
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