Author: Amelia Lucas
- Dave & Buster’s reported same-store sales growth that beat Wall Street expectations.
- The restaurant and gaming company has been investing in virtual reality games and switching up its menu to grow sales.
- The company also credited favorable weather and a calendar change for its fourth-quarter results.
Shares of Dave & Buster’s jumped as much as 4 percent Wednesday after the company’s efforts to improve its menu and amusement offerings led to same-store sales growth that beat expectations.
As competition grows in the restaurant and gaming space from upstarts like Punch Bowl Social, Dave & Buster’s has been working to streamline its menu while still offering value deals, like its unlimited wings special. It has also been investing in virtual reality games. The company released a new “Dragonfrost” VR game during the fourth quarter that ended Feb. 3.
Same-store sales during its fiscal fourth quarter increased 2.9 percent from a year earlier, while analysts surveyed by Refinitiv were expecting same-store sales growth of 2.1 percent. Food and beverage same-store sales rose by 1.1 percent, while amusements and other same-store sales increased by 4.4 percent.
“Against admittedly easy compares and aided by favorable weather/calendar, amusement comps return to mid-single-digit growth for the first time in six quarters and food/beverage comps surprisingly turned positive for the first time in two years,” BMO Capital Markets analyst Andrew Strelzik wrote in a note.
However, the company said it expects same-store sales growth in the range of flat to up 1.5 percent in fiscal 2019. Raymond James analyst Brian Vaccaro wrote in a note that his optimism about the company’s results are tempered by the fact that Dave & Buster’s has been lapping easy same-store sales so far, but that it will become tougher to beat in fiscal 2019.
Dave & Buster’s also reported revenue of $332 million, topping Wall Street estimates of $324 million and up 8.8 percent from a year earlier.
The company now expects revenue for the year to be between $1.37 billion and $1.4 billion.