Report: Chuck E. Cheese's Is on the Block
It hasn't been fun and games for Chuck E. Cheese's investors these last few months, but with rumors of a sale of the chain's parent company, all that may change.
CEC Entertainment, the parent company of Chuck E. Cheese's, is reportedly exploring a potential sale, according to a Reuters report published Tuesday. The Irving, Texas-based company has allegedly been working with Goldman Sachs and has spoken with interested buyers over the last several months.
CEC shares closed at $49.58 on Wednesday, the highest price since the company began trading on the NYSE in 1990. The stock continued to hover near that range midday on Thursday.
CEC has had a rough run in recent months. The company saw same-store sales fall 2.1 percent year-over-year in the third quarter and posted a 3.6 percent drop in food and beverage sales. Total revenues for the quarter fell 0.4 percent to $195.9 million from 196.6 million.
CEC is one of several restaurant chains forced to consider selling in the face of poor traffic. Darden Restaurants recently announced it would shed Red Lobster after declining earnings and disappointing same-restaurant sales. In November, Roark Capital Group, parent company of chains including Arby's, Auntie Anne's and Cinnabon, acquired CEK Inc., the parent of Carl's Jr. and Hardee's. Ruby Tuesday and Dave & Busters are also rumored to be on the block.
Despite rumors of sale and decreasing revenue, Chuck E. Cheese's doesn't seem to be slowing growth efforts. On Dec. 30, the chain opened four restaurants in Florida, Texas and New York. The company and franchisees operate 571 stores in 48 states, as well as eight restaurants internationally.