Dave & Buster's shares jump on raised forecast after sales improved in fourth quarter
Dave & Buster's updated its fiscal year 2018 outlook, sending shares up.
Reintroducing its All You Can Eat Wings promotion boosted sales in the fourth quarter.
The company expects full-year same-store sales will be negative, but on the lower end of its previous range.
Speaking at the ICR Conference, CEO Brian Jenkins said the company expects to further trim its menu and invest in technology this year.
Shares of Dave & Buster's PLAY are up 5 percent Tuesday morning after the company released an improved outlook for fiscal year 2018.
The company, best known for its arcade games and sports-bar food, said fourth-quarter sales have outpaced previous expectations, leading it to forecast same-store sales growth of 1.8 percent to 2.5 percent.
The positive projection comes after Dave & Buster's struggled in the third quarter, when its results were hurt by a decision to skip an All You Can Eat Wings promotion at the start of the football season. Since reintroducing the $19.99 offer, the company has seen a turnaround in sales.
Dave & Buster's said it expects full-year same-store sales will fall 1.9 percent to 1.7 percent, a more pinpointed outlook compared to its prior forecast of a low single-digit decrease.
The company also updated its full-year revenue projection, saying it now expects revenue to range between $1.259 billion and $1.263 billion, up from a previous range of $1.24 billion and $1.26 billion.
Net income for fiscal 2018 is now slated to be between $112 million and $114 million, up from the prior guidance of $106 million to $113 million.
Dave & Busters is slated to report fourth quarter and fiscal 2018 results in early April.
"We remain laser-focused on our strategic priorities to drive comparable store sales, including evolving our offering, improving the guest experience, and more effectively communicating our new news and value," CEO Brian Jenkins said in a statement late Monday.
Last year, Dave & Buster's slimmed its menu by 20 percent, hoping to streamline operations in the kitchen and increase throughput and speed of service. The company will shave off a few more items in February, Jenkins said during a panel at the ICR Conference in Orlando on Tuesday.
A big focus for the brand in 2019 is improving its technology. Dave & Buster's is rolling out kiosk upgrades, RFID powercards for its games and updating its mobile app, all in hopes of making the experience more seamless and convenient.
Jenkins said the company opened 15 new stores last year and has already signed 25 leases for new stores. So far, 11 of those leased locations are already under construction.
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