Following a decent fiscal third quarter in which overall revenue rose 9.3%, but comparable-store sales decreased by 1.3%, Dave & Buster's (NASDAQ: PLAY) laid out its expansion plans for the rest of 2017 and all of 2018. They include adding a new restaurant format that widens the range of markets that are viable for the brand to operate in.

What is Dave & Buster's doing?

The company, which opened one new location in Q3, expects to open a total of five new stores in the current quarter, bring its total for 2017 to 14. Of those openings, 10 use its familiar model, sized at between 30,000 and 40,000 square feet. The four remaining stores will be in the 25,000 to 30,000 square feet range. But Dave & Buster's actually has bigger plans for even smaller locations.

"We are excited to announce today a new smaller store format of 15,000 to 20,000 square feet to capitalize on demand in smaller markets not included in our original plan," the company explained in its Q3 earnings release. "Long-term, we see potential to open 20 to 40 of these stores, including two that are part of our 2018 plan."

While the company had original planned to hit a target of 211 locations in the U.S. and Canada, but with this smaller-store format in the mix, the company expects to grow to a number 10% to 20% higher. It currently has 105 stores in North America.

In its fiscal 2018, Dave & Buster's plans to open 14 or 15 new locations, "skew[ed] toward the large store format and existing markets for our brand."

With the design of the new format, the company is taking a different approach to small sites. Its earlier small store philosophy was essentially to shrink every part of its standard model proportionally. Its revised smaller format will devote 10,000 square feet or so to the arcade -- the same amount of space for games as its full-size locations.

What's next for Dave & Buster's?

The chain has lowered its full-year revenue forecast to a range of $1.148 billion to $1.155 billion from the $1.160 billion to $1.170 billion range it offered previously. It's blaming the guidance cut primarily on this fall's hurricanes -- which also delayed the opening of a new store in Puerto Rico -- and a lower expectation for comparable-store sales.

In addition, the company expects same-store sales to range between flat and an increase of 0.75%. For fiscal 2017, Dave & Buster's expects low-double-digit percentage growth in revenue and high-single-digit to low-double-digit growth in EBITDA on a comparable 52-week basis.

Dave & Buster's is taking a measured, but aggressive approach to growth. The chain is expanding steadily, but it's doing so at a pace that gives it time to correct any mistakes. Its limited debut of smaller stores appears to be taking the same approach. That should help the company fix any problems in the format before they have any significant fiscal impact.

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Daniel B. Kline has no position in any of the stocks mentioned.

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