Dave & Buster’s continued to defy the restaurant industry’s doldrums, reporting better-than-expected earnings for the first quarter amid another strong performance from its high-tech arcade gaming.
The chain of “eatertainment” restaurants said Tuesday that it posted net income of $42.8 million, or $0.98 per share, easily topping the Wall Street consensus estimate of $0.82 a share.
Revenue increased 16.1% to $304.15 million, with food and beverage revenue up 10.8% to $129.8 million and amusement and other revenue growing 20.3% to $174.3 million. Comparable store sales rose 2.2%, compared to a 3.6% increase in the year-ago quarter.
Analysts had expected total revenue of $299.7 million. Dave & Buster’s has now beaten the casual-dining benchmark for comp sales for 20 consecutive quarters.
“Dave & Buster’s differentiated experience across our four platforms of eat, drink, play and watch, continues to resonate with our guests,” CEO Steve King said in an earnings call.
According to The Motley Fool, the company is a “one-stop shop for food, drinks, and game-fueled revelry” that has avoided the plight of table-service concepts “struggling to draw traffic since they’re located in malls and shopping centers with waning retail interest.”
Dave & Buster’s has posted year-over-year revenue growth between 12.4% and 20.8% in each of its first 10 quarters since its late 2014 IPO, according to data from S&P. During that time, its shares have more than quadrupled, hitting an all-time high last week.
Investor’s Business Daily also noted that Dave & Buster’s has benefited from “its huge — and higher-margin — arcade areas,” with total operating margin increasing to 21.1% in the first quarter from 19.5% a year ago.
The company last year introduced such games as “Star Trek” and a life-size version of “Rock ’em Sock ’em Robots,” and it began offering “Power Tap” radio-frequency identification bracelets and other devices to activate games.
In after-hours trading Tuesday, the stock fell as much as 4.5%, to $67.00, but that may have reflected profit-taking. Year to date, it has gained more than 24%.