Dave & Buster's Entertainment, Inc., an owner and operator of dining and entertainment venues, announced financial results for its fourth quarter and full year 2015, which ended on January 31. The company also issued guidance for the full year 2016.
Key highlights from the fourth quarter 2015 compared to the fourth quarter 2014 include:
- Total revenues increased 13.1 percent to $234.2 million from $207.1 million.
- Comparable store sales increased 6 percent versus a 10.5 percent increase in last year’s fourth quarter.
- Opened four stores compared to three new stores in the fourth quarter 2014.
- Key highlights from the full year 2015 compared to the full year 2014 include:
- Total revenues increased 16.1 percent to $867 million from $746.8 million.
- Comparable store sales increased 8.9 percent.
- Opened 10 stores, including one relocation, compared to eight stores in fiscal 2014.
"Dave & Buster’s capped off an incredible year of record results with a fourth quarter performance that exceeded our expectations. Quarterly comparable store sales rose 6 percent, inclusive of an estimated negative 110 basis point impact related to Winter Storm Jonas and despite lapping a 10.5 percent gain from the prior year. Our brand has now surpassed the competitive benchmark in each of the last 15 quarters while on a two-year stacked basis delivered comparable trends of 16.5 percent. We also set a fourth quarter record for Adjusted EBITDA and Margins through operating leverage and cost control discipline. This was made possible by capitalizing on the ongoing sales shift to our higher-margin amusement category while benefitting from industry-leading growth in our food and beverage categories,” says Steve King, chief executive officer.
“Looking ahead, our key areas of focus are new store development, comparable store sales growth, and further margin improvement. Last year we drove higher guest satisfaction scores in overall hospitality and within each area of enjoyment—food and beverages, amusement, and sports viewing. We intend to build upon those achievements in 2016 through our commitment to innovation that keeps our brand fresh, entertaining and differentiated,” King continues.
“We are projecting nine to 10 store openings in 2016, including three scheduled to open in the first quarter in Rochester, New York; El Paso, Texas; and Capitol Heights, Maryland. By-year end, we will operate approximately 90 stores compared to a potential of at least 200 stores in North America. Our ‘one-of-a-kind’ dining, entertainment, and sports viewing venue has demonstrated incredible domestic appeal and is far from saturated but we have added another layer of growth to our business model through international licensing development. We look forward to the first store opening in the Middle East slated for 2017,” King concludes.
Review of Fourth Quarter 2015 Operating Results
Total revenues increased 13.1 percent to $234.2 million from $207.1 million in the fourth quarter 2014. Across all stores, Food and Beverage revenues increased 9.9 percent to $113.2 million and Amusements and Other revenues increased 16.3 percent to $121 million. Food and Beverage represented 48.3 percent of total revenues while Amusements and Other represented 51.7 percent of total revenues in the fourth quarter 2015. In last year’s fourth quarter, Food and Beverage represented 49.8 percent of total revenues while Amusements and Other represented 50.2 percent of total revenues.
Comparable store sales increased 6 percent in the fourth quarter 2015 compared to a 10.5 percent increase in the same period last year. Our comparable store sales growth was driven by a 6.9 percent increase in walk-in sales and a 1.8 percent increase in special events sales. Non-comparable store revenues increased by $17.6 million or 46.3 percent in the fourth quarter 2015 to $55.5 million.
Operating income increased to $38.1 million in the fourth quarter 2015 from $28 million in last year’s fourth quarter. As a percentage of total revenues, operating income increased approximately 280 basis points to 16.3 percent.
The company opened four new stores during the fourth quarter 2015 in Friendswood (Houston), Texas; Glendale (Phoenix), Arizona; Springfield (Greater Washington DC), Virginia and San Antonio, Texas. That brought the total openings for the fiscal year to 10 stores, including the Buffalo, New York relocation. All but one of the new store openings were in the large store format.
Total capital additions (net of tenant improvement allowances) for 2015 were $138 million and consisted of development costs for store openings, including pre-spend for the 2016 store class, several remodeling and related projects, new games, and maintenance capital.
In 2016, they intend to open a total of nine to 10 new stores spanning the small and large store formats and currently have five stores under construction. Total capital additions (net of tenant improvement allowances and other landlord payments) are expected in the $120 million to $130 million range and include development costs for store openings, six remodeling and related projects, new games, and maintenance capital.