Are Dave & Buster's comparable store sales really booming?

The Dave & Buster's chain, with 142 stores (they also own 52 Main Event stores), reported that their Dave & Buster's comparable store sales increased 9.6% in the second quarter ending July 31, 2022, compared to the same 2nd quarter in pre-pandemic 2019. Comparable store walk-in sales were up 13% and special event sales were down 23.1% compared to the same period in 2019. This sounds very impressive. But is it that great of an improvement, and does it indicate a long-term trend?

Part of the increase is due to an effective 11% increase in the Power Card purchases on a per-transaction basis that they achieved last October by raising the minimum Power Card purchase. They also increased some of the game prices. Gaming is the majority of Dave & Buster's revenues. From an inflation perspective, sales need to grow at least as fast as inflation to stay even. A 9.6% increase in comparable store sales is barely greater than the current inflation rate. So, a large part of any increase in sales is not necessarily due to better performance but instead just keeping pace with inflation. This also suggests that walk-in attendance did not increase for comparable stores versus the same period in 2019.

Regardless, can D&B's stores be expected at least to maintain this level of sales into the future? Probably not. First, a lot of the increase is being driven by pent-up demand that is only temporary. Second, in a sense, reopening their is somewhat analogous to opening a new D&B store. D&B has found that new store sales volumes in year two after opening are approximately 10% to 20% lower than in year one.