Dave & Buster's Entertainment Inc. (PLAY) Moves to Address Sales Decline amid S&P Downgrade

Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) is one of billionaire Steve Cohen’s small-cap stock picks with tremendous upside potential. On September 30, S&P Global downgraded the stock to a ‘B-’ in response to declining same-store sales, compressed margins, and high capital expenditure.

The same store sales decline comes as the dining chain faces lower demand for its products due to deteriorating macroeconomic conditions. Its core customers who fall below the national median income level are facing greater financial pressure, leading to reduced discretionary spending.

In addition, operational changes over the past two years have also hurt sales and cash flow. For starters, increasing game costs and the complexity of purchasing gaming tokens have also hurt sales. In response, the new management team has started focusing on simplification and returning to basics, which is expected to improve messaging to customers and staff.

Dave & Buster’s is also heightening its focus on lower-priced menu items, such as appetizers, as it seeks to grow restaurant traffic.

Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) owns and operates venues offering a combination of food, drinks, games, and sports viewing in North America, creating an “eatertainment” experience. The company provides full-service restaurants, sports bars with large screens, and arcades filled with games.

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Disclosure: None. This article is originally published at Insider Monkey.