A tough economy dampens the fun at Dave & Buster’s

This spring was not all fun and games for Dave & Buster’s.

Same-store sales at the eatertainment chain fell 5.4% year over year in the quarter ended May 5, worse than the company was expecting after starting the quarter with flat same-store sales.

Executives blamed the economy, gas prices, geopolitical uncertainty, and “meaningful softness” in consumer sentiment for a sharp decline in April, particularly among lower-income customers.

New marketing strategies

The brand had tried to appeal to that group with unlimited gaming passes that started for as little as $1 a day. But that message failed to resonate, and the company is shifting to other promotional strategies.

Dave & Buster’s stock fell nearly 19% in pre-market trading Tuesday before rebounding to negative 4.6%. Wall Street had been expecting a same-store sales decline of 1.2%.

Things have improved somewhat in the current quarter. Same-store sales are down 4% quarter to date, and the company has high hopes for programming around the FIFA World Cup soccer tournament this summer, among other initiatives.

The chain’s World Cup plans include ticketed watch parties for certain matches that come with all-you-can-eat wings and fries and unlimited gameplay for $24.99. The chain has also put World Cup tickets in some of its Human Crane games; installed two soccer-inspired arcade games; and added sliders inspired by the host countries to its menu.

The chain believes those efforts, combined with the unlimited gaming passes, will help it “capture significant incremental traffic” during the busy summer season, said CEO Tarun Lal.

Turnaround efforts

The company’s priority is to turn same-store sales positive by the end of Dave & Buster’s fiscal year in February, a goal Lal said it is confident it can achieve. Same-store sales have declined for 13 straight quarters.

Lal was brought in last summer after years with Yum Brands to help turn Dave & Buster’s around. He has spearheaded a back-to-basics approach focused on marketing, food and beverage, games, and operations.

This has included investing in new games for the first time in six years and bringing back a “historically proven” menu in October as well as value-focused Eat & Play Combos that start at $19.99.

So far, the menu updates are working: Food and beverage same-store sales rose 5% in the first quarter, their ninth straight month of growth.

The real issue has been on the game floor, where customers have complained of a “lack of newness.” Dave & Buster’s responded by adding 10 new games a few weeks ago, some tied to popular franchises like John Wick and Hot Wheels. Many of the new games are already among the chain’s top revenue generators, Lal said. It will add five more games over the course of the year.

Operational improvements

Dave & Buster’s also wants to take a more disciplined approach to marketing, using data to help determine how to allocate its budget between TV and digital. It is moving away from the $1 per day message and will focus in the near-term on its new games lineup and the World Cup.

It is putting an emphasis on operations, and especially speed: Its “obsession metric” for 2026 is speed of service, with the goal of greeting customers within a minute and getting their drink orders within four minutes. It’s investing in field training and is set to announce a new COO role next week.

That would be the chain’s latest addition to the C-suite after a number of new hires over the past month. Jeremy Tucker joined as CMO, bringing experience from AutoNation, Planet Fitness and Walt Disney; Chief Technology and Digital Officer Kevin Fish came over from Wingstop; and Chief Legal Officer Rachel Morgan joined from Nexstar Media Group.

Remodeled stores have also been a bright spot for Dave & Buster’s. It recently reopened six locations with a new layout designed to improve traffic and productivity, and those are generating same-store sales growth of 7% year over year on average. They cost half as much as the remodel packages of 2024 and 2025 but are producing the same ROI, Lal said. The company will open two more this fiscal year.

Dallas-based Dave & Buster’s generated total revenue of $559.2 million in the quarter, a 1.5% decrease year over year. Net income was $5.7 million, down from $21.7 million a year ago. Free cash flow improved to $25.3 million, compared to negative $58.8 million last year.

The company is cutting back on capital expenditures this year, targeting $200 million compared to $270 million last year. It still expects to open 11 new locations but said those plans could change as it weighs the return on its investments.

It ended the quarter with 247 locations in North America between its Dave & Buster’s and Main Event brands.

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