CEC Entertainment, the US operator of both Chuck E. Cheese’s and Peter Piper Pizza venues, has reported a dip in its fourth quarter results for the year ending December 31, 2017.
Company venue sales decreased US$7.2m from the fourth quarter of 2016, primarily driven by a six per cent decline in comparable venue sales.
Deferred amusement revenue was $3.4m less than the fourth quarter of 2016, resulting in cash revenue from company-operated venues decreasing $10.6m. Total revenues were $196.7m for the fourth quarter of 2017 compared to $204.6m previously.
The company reported net income of $52.9m in 2017, compared to a net loss of $10.1m for 2016. This was positively impacted by a $66.6m adjustment to deferred income tax liability related to the recently enacted tax law changes. Before the impact of this adjustment, the net loss was $13.7m, compared to a drop of $10.1m the year before. A decline in revenue and an increase in marketing costs were the drivers.
Adjusted EBITDA decreased $11.4m to $25.5m for the period.
"There were several factors which impacted our business in 2017, which our team is addressing diligently," said Tom Leverton, CEO. "We have put several measures in place to address these challenges, including launching new advertising campaigns addressing moms and kids, as well as a revitalised approach to birthdays.
“Additionally, we have identified several improvements to our website and digital marketing platform. While our primary focus has been on revenue, we recently implemented several changes in our corporate support structure to better align with our recent performance. We are optimistic that these combined revenue and cost initiatives should have a positive impact on our revenues and operating results in future periods."
