Dave & Buster’s has spent much of the past year trying to revive traffic.
It is working to enhance the value of its games and strengthen its food business as consumers become more selective in their discretionary spending.
The restaurant and entertainment chain, which combines arcade games, food, and sports viewing under one roof, has also been reshaping its leadership team.
All this as it pulls back on new-store spending while working through a broader turnaround.
That effort faced another setback after Dave & Buster’s reported weaker second-quarter 2027 results on Sept. 15.
The company posted revenue of $544.1 million, down from $557.4 million a year earlier, while comparable-store sales declined 2.9%.
Dave & Buster’s also reported $12.5 million in net loss, or 36 cents per diluted share, compared with net income of $11.4 million, or 32 cents per share, a year earlier.
Adjusted EBITDA fell to $98.9 million from $129.7 million.
The results added to pressure on a stock that has already fallen sharply this year.
The company’s shares dropped following the report, touching a new 52-week low of $6.45 on Sept. 16 before slightly recovering later in the day.
Dave & Buster’s stock is down over 56% year-to-date and nearly 65% over the past 12 months.
The stock has also lost more than 30% over the past month and nearly 39% over the past three months.
These declines reflect a central problem facing the company, its higher-margin entertainment business, which has historically defined Dave & Buster’s, remains under pressure.
Even as its food and beverage sales are improving,
Dave & Buster’s arcade business under pressure
The company’s sales mix has become one of the biggest challenges facing its turnaround.
Food and beverage comparable sales increased 7.6% during the second quarter and have now been positive for five consecutive quarters.
But the entertainment side of the business continues to struggle, even as Dave & Buster’s rolls out new games and changes how much customers pay to play.
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During the earnings call, analysts noted that entertainment sales had declined year over year for roughly 8 quarters.
It raises the question of whether the game-focused model itself had become less attractive to consumers.
CEO Darin Harper said the company’s consumer research continues to show demand for out-of-home gaming, but acknowledged that Dave & Buster’s has not kept its arcade floors innovative and relevant enough.
“You see other concepts out there with similar type offerings that are able to grow. Where we have not delivered great is that ongoing innovation and ongoing relevancy in our game room floor,” said Harper.
Further noting, “We have to innovate more, and we have to be more relevant for the guest.”
Management said the company has underinvested in its midway over the past several years and needs to catch up through new games, intellectual-property partnerships, and other entertainment experiences.
Dave & Buster’s has launched 10 new games and attractions this year, including experiences tied to The Mandalorian and Grogu, John Wick, Stranger Things, and Hot Wheels.
Management said more than 70% of guests surveyed indicated that learning about new games or activities would encourage them to visit more often.
The company has also changed game pricing in an effort to give customers more value.
Harper said the changes allow customers to play longer while spending roughly the same amount on entertainment, resulting in gameplay and dwell-time increases of about 16% to more than 20%.
The hope is that customers who stay longer will also spend more on food and drinks.
Dave & Buster’s said its Eat & Play Combo has already helped convert some customers who previously came only to play games into food-and-beverage customers.
Dave & Buster’s sees early signs of improvement
There are some indications that the company’s sales trends may be stabilizing.
Comparable-store sales fell 5% in June before improving to a 1.6% decline in July.
Management said trends improved further during the first five weeks of the third quarter and expects better top-line performance over the remainder of the year.
Dave & Buster’s has also found some success tying its stores to major sporting and cultural events.
Management said World Cup activations generated double-digit sales growth during some matches as the company used themed food, games, and watch experiences to draw customers into its locations.
The company plans to lean further into those occasions as it tries to position Dave & Buster’s as a destination for sports viewing, celebrations, and other group outings.
Still, the broader consumer environment remains difficult.
Harper said lower-income consumers have been affected more heavily by current economic pressures.
But he also acknowledged that Dave & Buster’s cannot blame all of its challenges on the economy because other brands operating in the same environment have performed better.
The company is emphasizing value through offers, including its Eat & Play Combo and half-price games on Wednesdays and Sundays.
Wall Street cuts Dave & Buster’s price targets
Wall Street analysts have also become more cautious following the quarter.
UBS analyst Dennis Geiger lowered the firm’s price target to $9 from $12 and maintained a Neutral rating.
Geiger said sales trends are showing early improvement, but greater-than-expected margin and earnings pressure, elevated macroeconomic risks, and limited visibility leave the turnaround in its early stages.
BMO Capital analyst Andrew Strelzik lowered the firm’s price target to $13 from $22 while maintaining an Outperform rating.
Strelzik described the quarter as showing “better comps but a worse sales mix.”
BMO also pointed to limited visibility into an improvement in amusement sales, intensifying consumer pressure, and another leadership transition.
Dave & Buster’s reshapes leadership
The turnaround is happening alongside a broader reshuffling of Dave & Buster’s management team.
Amanda Busby joined the company in August as chief operating officer.
Rachel Morgan was promoted to chief legal and administrative officer and corporate secretary, expanding her responsibilities to include oversight of the legal and human resources organizations.
Aldo Rosales was promoted to chief strategy and revenue management officer.
Those changes followed other recent executive additions, including Jeremy Tucker as chief marketing officer, Kevin Fish as chief technology and digital officer, and Derek Sample as chief accounting officer.
Management said the leadership overhaul is intended to improve operations, accelerate digital initiatives, and restore sales growth.
Dave & Buster’s is also becoming more selective about expansion.
The company opened seven domestic stores during the first half of fiscal 2026 but plans to open only four more during the remainder of the year and five during fiscal 2027.
Dave & Buster’s currently operates 250 company-owned stores, including 184 Dave & Buster’s locations and 66 Main Event locations, along with six international franchise stores.
The company has also identified $15 million in cost savings expected to be realized over the next 12 months.
It is targeting at least double this amount as it searches for additional expenses that can be removed without affecting customers.
Dave & Buster’s is now trying to convert its stronger food sales, better value, and a revamped leadership team to revive its amusement business that has historically been at the center of the chain.
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