Dave & Buster's Lives

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There was a time you need pizzazz to make it in the restaurant biz. It seems silly now -- like shag carpeting on a piano -- but remember when star-struck investors bid up the celebrity-laden Planet Hollywood IPO, and just about every marketable entertainment property was setting up an eatery?

Themed restaurants were going to conquer the world. They didn't. Planet Hollywood filed for bankruptcy. Rainforest Café was acquired by Landry's (NYSE: LNY). Dave & Buster's (NYSE: DAB) was to be taken private. Clear the table. Check, please!

Well, themed casual dining isn't dead. The globe-shaped Planet Hollywood unit in Disney's (NYSE: DIS) Downtown Disney entertainment complex in Orlando may have fallen well off its peak $50 million in annual sales, but it's still the country's highest-grossing location. Rainforest Café has thrived under Landry's tutelage.

And what about Dave & Buster's? That grown-up version of CEC's (NYSE: CEC) Chuck E. Cheese? It never went through with last year's buyout. It hasn't been easy staying public as proxy battles with dissident shareholders, retiring directors, and sub-par financial performance have kept the shares below the original $12 buyout proposal over the past year.

But the company is showing some signs of life. The casual diner, which merges decent eats with high-end video arcades, ticket redemption and billiards, posted healthy earnings growth last night. The company earned $0.11 a share for the quarter, well above last year's $0.07 effort. Unfortunately the top line hasn't been as kind, as the company suffered a 6% slide in comps.

Don't blame the grub. The amusement business caused the bulk of the unit-level decline. That will bounce back along with the economy when customers have some more disposable income to throw away on Skeeball, ticket-spewing video poker and table shuffleboard. So hold off on that eulogy for the eatertainment industry. It may be forgotten, but it's certainly not dead.