AP News

Birthday party sales drop at Chuck E. Cheese

NEW YORK (AP) — Chuck E. Cheese is hoping its party days aren't numbered.

The owner of the children's pizza restaurant chain this week blamed a decline in birthday celebrations for weaker sales in the third quarter. CEC Entertainment Inc. said sales from parties fell 11 percent in the period, leading to a 2.1 percent decline in overall sales at locations open at least a year.

"We are incredibly disappointed with our birthday sales so far this year," CEO Michael Magusiak said in a call with analysts Thursday. For the first half of the year, the company says birthday party sales are down 5.5 percent.

The stock dropped $3.24, or 7 percent, to $43.11 in afternoon trading Friday.

The birthday party business is important for the company, which is based in Irving, Texas and has more than 500 locations. CEC said sales from birthday parties have historically generated about 15 to 20 percent of sales in established restaurants.

Magusiak said one of the reasons for the decline may be that the company didn't focus on birthday parties as much in its TV advertising, an issue he said has been addressed. He said trends have improved in the current quarter.

Chuck E. Cheese is trying refresh its image more broadly. Last year, it revamped the image for its giant rodent mascot and is also investing in new attractions.

In the meantime, the company says it's also testing higher prices for its tokens, which customers buy to play games. For example, it used to give out 40 tokens for $10, but is scaling that back to 33 tokens in tests.

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