Dave & Buster's Projects Nine to 10 More Stores in 2016 | Food Newsfeed

Dave & Buster's Projects Nine to 10 More Stores in 2016

December 08, 2015 Industry News
Industry News

Dave & Buster's Entertainment, Inc., an owner and operator of dining and entertainment venues, announced financial results for its third quarter 2015, which ended on November 1.

Key highlights from the third quarter 2015 compared to the third quarter 2014 include:

  • Total revenues increased 17.9 percent to $192.8 million from $163.5 million.
  • Comparable store sales increased 8.8 percent vs. an 8.7 percent increase in last year's third quarter.
  • Opened one store and relocated one store in the third quarter 2015.
  • Adjusted EBITDA, a non-GAAP measure, increased 40.3 percent to $34.5 million from $24.6 million. As a percentage of total revenues, Adjusted EBITDA increased around 290 basis points to 17.9 percent.
  • Net income of $4.6 million, or $0.11 per diluted share, compared to net loss of $4.6 million, or $(0.13) per share, in the third quarter 2014.
  • Pro forma net income, a non-GAAP measure, of $5 million, or $0.12 per diluted share, compared to pro forma net loss of $2.3 million, or $(0.06) per share, in the same period last year.
  • Signed master development agreement for seven stores in the Middle East.

"Dave & Buster's is experiencing a phenomenal year of record results and we are very pleased to be increasing our annual guidance for the third consecutive time. Quarterly comparable store sales rose 8.8 percent, inclusive of an estimated negative 110 basis point Halloween calendar shift, and despite lapping an 8.7 percent gain from the prior year. We have now marked the 14th quarter in a row that we have exceeded the competitive industry benchmark while on a two-year stacked basis comparable trends of 17.5 percent were also higher sequentially than the previous two quarters of 16.7 percent and 14.6 percent, respectively. Guests continued to respond well to our 'Summer of Games' promotion, which concluded in the third quarter along with our subsequent football-related promotions along with new food and beverage introductions. Our sales strength during the third quarter was well represented across categories, operating days, day-parts, and geographies. We also set third quarter records for Adjusted EBITDA and Margins by leveraging operating costs into substantially higher profitability as we benefitted from the ongoing business shift to our higher-margin amusement category even as our food and beverage categories grow," says Steve King, chief executive officer."We are slated to open eight to nine new stores this year, mostly in the large store format, and are projecting nine to 10 store openings in 2016 across both store formats. Our long-term target for store growth remains roughly 10 percent and we foresee at least a 200-store opportunity in North America alone. We are also confident that our 'one-of-a-kind' dining, entertainment, and sports viewing venues will resonate with guests outside of North America while adding yet another layer of growth to our business model. We are therefore forging ahead with international development through multi-store licensing and recently signed an agreement for seven stores in the Middle East over a seven-year period with an experienced retail and restaurant operator. We look forward to signing additional agreements across other geographies over time as well," King concludes.

Total revenues increased 17.9 percent to $192.8 million from $163.5 million in the third quarter 2014. Across all stores, food and beverage revenues increased 14.9 percent to $89.8 million and amusements and other revenues increased 20.7 percent to $102.9 million. Food and beverage represented 46.6 percent of total revenues while amusements and other represented 53.4 percent of total revenues in the third quarter 2015. In last year's third quarter, food and beverage represented 47.8 percent of total revenues while amusements and other represented 52.2 percent of total revenues.

Comparable store sales increased 8.8 percent in the third quarter 2015 compared to an 8.7 percent increase in the same period last year. Our comparable store sales growth was driven by a 9.4 percent increase in walk-in sales and a 3.9 percent increase in special events sales. Non-comparable store revenues increased by $16.8 million or 72.7 percent in the third quarter 2015 to $40 million.

Store-level EBITDA increased 32.5 percent to $44.5 million in the third quarter 2015 from $33.6 million in last year's third quarter. As a percentage of total revenues, Store-level EBITDA increased around 250 basis points to 23.1 percent.

Adjusted EBITDA increased 40.3 percent to $34.5 million in the third quarter 2015 from $24.6 million in the same period last year. As a percentage of total revenues, Adjusted EBITDA increased approximately 290 basis points to 17.9 percent.

Operating income increased to $9.5 million in the third quarter 2015 from $0.9 million in last year's third quarter. As a percentage of total revenues, operating income increased approximately 430 basis points to 4.9 percent.

Net income increased to $4.6 million, or $0.11 per diluted share (42.9 million diluted share base), in the third quarter 2015 compared to net loss of $4.6 million, or $(0.13) per share (34.9 million share base), in the same period last year. Pro forma net income, a non-GAAP measure, was $5.0 million, or $0.12 per diluted share, compared to pro forma net loss of $2.3 million, or $(0.06) per share in the same period last year.

In 2015, Dave & Buster’s intends to open a total of eight to nine new stores and relocate one existing store. All but one of the new store openings will be in the large-store format.

It opened a store in Edina, Minnesota, and relocated a store in Buffalo, New York, during the third quarter. Thus far in the fourth quarter, it has opened stores in Friendswood (Houston), Texas, and Glendale (Phoenix), Arizona, and plan to open stores in Springfield (Greater Washington, D.C.), Virginia, and San Antonio by year-end.

Total capital additions (net of tenant improvement allowances) are now expected between $144 million and $149 million for 2015. This new range reflects higher pre-spend for the 2016 store class than previously estimated.

News and information presented in this release has not been corroborated by FSR, Food News Media, or Journalistic, Inc.