Dave & Buster’s decision not to renew an all-you-can-eat chicken wings promotion hurt the eatertainment brand’s sales last quarter, the chain’s CEO admitted this week.
It was another difficult quarter for the 120-unit chain, which saw its stock fall more than 10% by midday Wednesday on its lackluster earnings report.
Same-store sales dipped 1.3% year over year on total revenues of $282.1 million, up 12.9% from the previous year.
“We underestimated the impact of all-you-can-eat wings when we decided to remove it from our promotional flight plan,” CEO Brian Jenkins said during a conference call with analysts Tuesday.
Late in the quarter ended Nov. 4, the company added a new chicken wing promotion that includes unlimited video game play as a “course correction,” said Jenkins, who declined to specify just how much the absent wing deal hurt the business.
The comparable-store decline was driven by a whopping 6.9% drop in special event sales and a 5% shortfall in food and beverage sales.
Amusement comps rose 1.5% for the period, spurred in part by Dave & Buster’s introduction of its first virtual reality game.
The chain will release its second VR game next week, a proprietary title about dragons. A third immersive game, this one based on the “Star Trek” series, is slated to debut early next year. The games, which must be supervised by an attendant, cost players $5 each.
“We are well on our way of building a strong library of virtual-reality content,” Jenkins said. He would not detail how much revenue the new games have brought in.
Apart from the games, the company is looking to strengthen its food and beverage offerings to drive repeat traffic. The chain plans to add zucchini noodles, as well as fresh juices and purees on the bar menu.
One Dallas unit is testing a “quick-casual” operation, in addition to the full-service one, that’s designed to look like a food truck serving tacos and drinks. The concept opened late last week. The hope is that customers will dash in for a quick bite before returning to the amusements.
“I’m optimistic on that,” Jenkins said, declining to comment on early sales. “It’s something we could scale to a number of stores.”
Jenkins said the chain has a “significant amount” of private events booked for the holiday season, but that that area of operation remains volatile.
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