CEC Entertainment Inc (NYSE:CEC) reported today that their revenue and profits at Chuck E. Cheese are taking a slide. Not only did the current quarter earnings per share miss analyst estimates by $0.01 (0.55%) but same stores sales declined by 4.2% over the previous year’s first quarter. Revenue came in at $246.8 million, $9.6 million (3.8%) less than the same quarter last year.
The company’s CEO Michael Magusiak shared feelings of disappointment with investors and aside from his enthusiasm over the new advertising and marketing campaign painted a bleak picture of the future. Guidance for fiscal 2012 was reduced by $0.10 on the low end and $0.05 on the high end and the CEO said he expected to see same stores sales declines in the range of 2% for the second quarter.
CEC Entertainment owns or operates 558 Chuck E. Cheese locations in forty eight of the United States and in Canada where a kid can be a kid. 508 of the Chuck E. Cheese locations are owned and operated by the company and the remaining 50 units are franchised. The Chuck E. Cheese business model incorporates a restaurant, an arcade, and a children’s playground all under one roof. Menu items at Chuck E. Cheese include pizza, salads, sandwiches, and desserts.
CEC took a pounding in the markets today losing 9.55% to land at $37.28; meanwhile the Dow Jones Industrial Average slid 1.27% to 13,206.59.
Foodbeats take: Though Chuck E. Cheese has a unique business model there is good reason for the lack of enthusiasm around the company. In this day and age almost every child has several video game systems at home, making arcades a loitering spot of the past and not a very reliable source of income.
Source: Business Wire