Dave & Buster’s 1st-Quarter Results Well Below Estimates, but Shares Jump After Hours

The casual dining and entertainment operator said its ‘back-to-basics’ strategy is driving a meaningful recovery in sales.

The exterior of a Dave & Buster's restaurant is seen in Austin, Texas, on June 10, 2025. Brandon Bell/Getty Images

Faced with budget-conscious customers who are spending less on dining out and entertainment, Dave & Buster’s Entertainment Inc. on June 10 reported a near double-digit decline in same-store sales as it looked to rebound from a tough end to fiscal 2025.

During its after-market conference call with Wall Street analysts, Dave & Buster’s interim CEO Kevin Sheehan said the Texas-based casual dining and entertainment operator is still recovering from the abrupt resignation of former CEO Chris Morris in December 2024, which triggered a broader revamp of the company’s nationwide operations.

“While performance in the quarter was nowhere close to where we want and expect to be, our ‘back-to-basics’ strategy is working and is driving a material recovery in our top-line trajectory,” Sheehan said. “In the quarter, we unwound many clear mistakes and made high-confidence changes to marketing, menu operations, remodels, and games investment.

“While we are still in the early innings, we are improving our execution every day and have a very clear road execution roadmap of work to do to continue to drive improvements and meaningful growth of the business.”

In April, during the company’s fourth-quarter and full-year conference call for fiscal 2024, Sheehan told analysts that Dave & Buster’s was working to address missteps by former CEO Chris Morris and his leadership team, which contributed to the company’s disappointing operational and financial performance—trends that have carried into the new fiscal year.

“Previous leadership, while well-intentioned, made significant and ill-advised changes to marketing, food and beverage, operations, remodels, and games investment that negatively impacted the business,” Sheehan said after the company reported an across-the-board decline in earnings, revenue, and same-store sales at the time.

New Sales Gains

Since taking over the reins of the company, Sheehan said the company has made progress in improving its operating performance and unwinding earlier management decisions, resulting in positive same-store sales gains since the Memorial Day weekend.

Among key changes, Sheehan said the company has revamped its media and marketing strategy and spending, including a return to TV advertising and the introduction of a new unlimited summer pass that allows its customers to receive game, food, and beverage discounts with each visit.

Sheehan also mentioned that his executive team has identified several changes at local stores that were not thoroughly tested and vetted before being implemented in the past two years, including promotional menus, service style, gaming and food pricing, and store remodels that were placing too much demand on our operators. Many of those changes occurred while the company was cutting back on training and failing to properly engage and communicate with store managers and their teams, he said.

Later this year, Sheehan said the company will unveil a revamped menu and introduce new arcade offerings this summer, including the Human Crane and a half-dozen new premium games and competitions. Sheehan said the Human Crane, where customers can strap into a giant claw and grab prizes, has seen strong feedback at local test stores.

“We’ve significantly scaled back and returned to our proven practices and have continued to spend significant time listening to our operators and their insights,” Sheehan said, adding that the company is launching a new store manager incentive plan driven by same-store sales growth.

For the first fiscal quarter ending May 6, Dave & Buster’s reported net income of $21.7 million, or 62 cents per share—down 47.5 percent compared with net income of $41.4 million, or 99 cents per share, in the first quarter of fiscal 2024. Revenue fell to $567.7 million, a 3.5 percent decrease from $588.1 million a year earlier.

On an adjusted basis, the Texas casual dining and arcade chain reported net income of $26.7 million, or 76 cents per share. Those results fell well short of Wall Street expectations of $1.04 per share on revenue of $566.8 million, according to FactSet.

As noted, Dave & Buster’s same-store sales decreased by 8.3 percent across its 172 namesake locations in 43 states and Puerto Rico, and its 61 entertainment-focused Main Event venues in 21 states, mainly due to less traffic at the company-owned stores open more than a year. During the first quarter, the Texas restaurant operator opened two new Dave & Buster’s locations, relocated one store, and completed 13 remodels.

As a part of the company’s growth strategy first unveiled in June 2023, Dave & Buster’s expects to open 10 to 12 new stores in fiscal 2025 under its $220 million capital spending program. Sheehan also noted that the company is in discussions with potential partners to monetize and increase cash flow from company-owned real estate at nine Dave & Buster locations.

In addition to steering the company back to financial stability and correcting past missteps, Dave & Buster’s is also overhauling its board of directors. In May, the board nominated industry veterans Allen Weiss and Nathaniel Lipman for election to the board. Current board members Michael Griffith, Gail Mandel, and Jennifer Storms recently told the company that they will not seek reelection at the upcoming annual meeting on June 20.

In addition, Sheehan said the board is collaborating with Heidrick & Struggles, a global executive search firm, to assist the board in hiring a new CEO. He stated that the board is finalizing its efforts to identify a permanent CEO but said no additional information would be provided until a new hire is announced publicly.

In after-hours trading, Dave & Buster’s shares rose 4.75 percent to $27.1. The stock has fallen more than 11 percent year to date but saw a 20 percent improvement over the past month as the company hopes to get customers back to its stores this summer.