Dave & Buster’s Entertainment is slowly improving its performance after a couple of difficult years during the pandemic, as the eatertainment industry begins to find its feet again. Dave & Buster’s announced record revenues of $481.2 million for the third quarter ended Oct. 30, 2022 – a more than 50% increase from the same quarter the year previously, likely mainly driven by the acquisition of Main Event, which was finalized in June. But despite the boost in revenues, same-store sales momentum dipped during the quarter, particularly for special events during the quarter, which declined 6.7% compared with 2019.
Despite some of this momentum loss, Dave & Buster’s is confident that the company is on the right path to meet or exceed 2019 performance levels.
“We do expect to have a much easier comp for the December, January period as we go forward,” CFO Michael Quartieri said during Tuesday’s earnings call. “I would just look at just overall trends in the business. I think from a back-to-school perspective, there are economic issues that are out there, if you look at comps levels vs 2019 I think it's still a remarkable component of this business that shows the strength of the overall business in itself.”
For the quarter moving forward, Dave & Buster’s expects that the holiday season will provide a much-needed boost, particularly as New Year’s Eve sales do well for the Main Event stores. Dave & Buster’s is also shifting its focus to young adults, particularly Gen. Z and Millennials in their 20s and 30s, and leaving the more family-focused approach to The Main Event stores.
“Our core brand position for our Dave & Buster's brand going forward will bring greater focus to executing adult occasions aged 21 to 39 who are visiting our locations to have a great time with their squad,” CEO Chris Morris said. “[…] Over the months and years to come, this refined brand positioning will guide our marketing strategy, entertainment innovation pipeline, food and beverage offering, store design and layout, and tech-enabled hospitality model. This long-term holistic approach to managing the business […] led to the successful reinvigoration of the Main Event brand.”
As the events business continues to recover, Dave & Buster’s is looking forward to expanding both its landmark business and the Main Event stores, especially as the Main Event is now 20% of the company’s total income.
During the third quarter ended Oct. 30, 2022, revenues increased 60.7% compared with the third quarter of 2019. Dave & Buster’s net income totaled $1.9 million, or $0.04 per share, compared with net income of $10.6 million, or $0.21 per share in the third quarter of 2021.
As of Oct. 30, Dave & Buster’s has 203 stores in its portfolio, with three net new stores opening during the quarter.
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