Is Dave & Buster's In Trouble? The Chain Is Reporting Declining Sales
This year is undeniably shaping up to be a difficult one for the restaurant industry as a growing number of chains, from KFC to Kona Grill, report declining customer traffic and sales. One of America's most iconic eatertainment chains is the latest to be hit with these financial woes.
Dave & Buster's released its financial results for the first quarter of 2024 on June 12, reporting a 5.6% drop in same-store sales and a 1.5% decline in revenue. On a two-year basis, same-store stores have declined by an even higher 9.7%, Restaurant Business Magazine reported. The company's stock plummeted nearly 10% in pre-market trading in the wake of the negative earnings report.
During a June 12 earnings call with investors, Dave & Buster's executives attributed their struggles to the current economic environment. Prices for many goods and services, including restaurants, are still on the rise—spurring many consumers to eat out less nowadays.
"It's a complex macro environment, and it's been challenging," CEO Chris Morris said during the call.
These types of sales declines could cast a shadow of uncertainty over the future of any restaurant chain. However, Dave & Buster's is encouraged by some notable improvements to other parts of its business. Morris said that the food and games chain has been working on several "strategic growth initiatives" and has made "meaningful progress" on all of them.
For one, Dave & Buster's recently rolled out a new-and-improved menu and subsequently saw improvements in its food and beverage satisfaction scores, check size, gross margins, and "overall sales trends, according to Morris. The new menu offerings—which debuted in April—included Loaded Barbacoa Fries, a Stacked Steak Bowl, Cajun Shrimp Pasta, Cereal Cake, and several non-alcoholic flavored lemonades and teas.
Dave & Buster's has also opened 15 new locations in the United States over the past 12 months and remodeled several others, which are already performing extremely well, according to the company.
"Our remodels continue to deliver impressive results and we believe there's a strong opportunity to accelerate and improve the pace of these remodels," Morris said.
Looking ahead, Dave & Buster's is planning to keep up the momentum by opening additional stores, ramping up remodels, optimizing its marketing, rolling out more new menu items, and raising prices in line with inflation, among other efforts.
"In the coming months, we have a lot planned on each of our initiatives," Morris said.
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