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Dave & Buster’s eyes quick-casual option

Brand seeks complement to full-service dining

Dave & Buster’s Entertainment Inc. is looking to shake up its foodservice offerings with a quick-casual alternative to its current full-service dining, executives said Tuesday.

 The Dallas-based big-box arcade concept is eyeing the “value and speed” of a counter-service option to the brand’s traditional full-service dining room, said Steve King, Dave & Buster’s CEO, in an earnings conference call Tuesday with equity analysts. Tests are likely to begin in the last half of the year, he said.

Dave & Buster’s earlier this year pared down its menu to simplify kitchen operations and improve speed of service, King said.

“In February this year, we streamlined our menu and reduced the number of food items by about 20 percent, and our beverage offering by slightly more than that,” he said. 

“In addition, we’re on track to test the quick-casual offering inside D&B during the back half of the year and view this as a potential complementary delivery mechanism to the casual-dining inside our facilities,” King said.

King said a “significant number” of customers said they would like a different service model.

“They’d rather see a quick-casual offering, with some of them even a counter service offering, but I think that it can be a complement to our full-service opportunity because we still have … a significant majority that want a full-service experience,” King explained.

Those customers looking for a faster dining experience also want to be able to order it on their phones and pick it up when it’s ready, he said.

King said the new service would be tested in “a couple of stores to start.”

Amusements revenues continue to dominate Dave & Buster’s revenue streams, with the games representing 54.5 percent of revenues in the fourth quarter, said Brian Jenkins, the company chief financial officer.

Same-store sales in the quarter ended Feb. 4 were down 5.9 percent, including a decline of 4.2 percent in amusements and decreases of 7.4 percent in food and 8.5 percent in beverages, Jenkins said. The decline in amusements revenue was unexpected, he said.

“The less-compelling game content, bitter cold weather particularly during the busy holiday season, and higher-than-expected impacts from competitive intrusion were all contributing factors,” Jenkins said. 

Dave & Buster’s is working with a study to introduce the a proprietary virtual reality platform in the middle of the year, the executives said. The first title will be with a “very well-known Hollywood film franchise,” King said.

In the fourth quarter, which included a tax benefit, Dave & Buster’s income was up 30 percent to $35.6 million, or 85 cents a share, compared to $27.4 million, or 63 cents a share, in the prior-year quarter. Revenue in the quarter increased 12.9 percent, to $304.9 million from $270.2 million in the same period a year ago.  

Dave & Buster's, founded in 1982, owns and operates 110 units in 37 states, Puerto Rico and Canada.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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