After going dark for a couple of months in the spring, Dave & Buster’s is continuing its climb to normalcy with top stores nearly reaching prior-year sales levels in recent weeks.
In September, 99 stores were open, and 81 were in the comp base. Those 81 units notched 65 percent of 2019 same-store sales during the month, excluding five stores where arcades have not been allowed to reopen. The top-quartile of stores captured 84 percent of last year’s comp sales.
The numbers, shared Wednesday, are a significant improvement from August when 84 stores were open and 68 locations were in the comp base. During that month, those 68 units achieved 46 percent of last year’s same-store sales.
Overall, Dave & Buster’s comp sales dropped 75 percent in August and 62 percent in September after an 87 percent plummet in Q2. As of October 4, 98 of the 136 stores are open.
THE COVID-19 ROAD FOR DAVE & BUSTER’S SO FAR:
Dave & Buster’s Warns of Potential Bankruptcy
Dave & Buster’s is Reawakening as a Better Brand
Dave & Buster’s Takes $43 Million Virus Hit, Looks to Future
Dave & Buster’s Strikes $100 Million Agreement, Could Still End Up in Chapter 11
Dave & Buster’s to Sell Up to $75 million in Shares
Dave & Buster’s Considers Selling Stake as Stores Shut Down
The chain estimates that it can achieve EBITDA breakeven with revenue of 50 to 55 percent of 2019 sales.
“The progress we’ve made reopening stores and driving sales recovery demonstrates the enduring strength of the Dave & Buster’s brand and the loyalty of our guests across the country,” CEO Brian Jenkins said in a statement. “We remain optimistic that we will emerge from this challenge in a stronger competitive position to deliver fun to our guests and value to our shareholders.”
On March 20, Dave & Buster’s closed all of its locations, and remained that way until May. The brand ended up taking a $43.5 million loss in Q1. In the second quarter, revenue dropped 85 percent to $50.8 million, compared to $344.6 million in 2019.
More stores continue to open, and the brand has attempted to elevate its food product as the amusement side of business continues to be a struggle amid COVID restrictions. For example, Dave & Buster’s is testing a snackable menu that customers can order in the arcade through their mobile devices. During the Q2 earnings call, Jenkins also mentioned launching a “new, stronger food identity” once the reopening process is complete and traffic returns to normal levels.
However, COVID is still having a major impact. According to WARN filings, Dave & Buster’s plans to lay off more than 1,300 workers across several states. The workers were temporarily furloughed in March and are being permanently cut due to “unforeseeable business circumstances,” according to Kathryn Rainey, senior director of human resources.
In a filing, Dave & Buster’s also warned that bankruptcy could be a possibility if it doesn’t seal an agreement with lenders. The brand currently has $197 in cash on hand with roughly $744 million outstanding under its credit facility.
