CEC Entertainment 2Q net income rises 32 percent

IRVING, Texas—Family entertainment and dining company CEC Entertainment Inc. reported better-than-anticipated second-quarter earnings late Tuesday because of increased marketing and investment in its stores.

The company, which operates Chuck E. Cheese restaurants, said net income rose to $11.3 million, or 48 cents per share, for the fiscal quarter, up from $8.5 million, or 26 cents per share, for the same quarter of the previous year.

Analysts polled by Thomson Financial expected earnings of 31 cents per share for the quarter.

Revenue increased 7 percent for the quarter to $192.5 million, driven in part by new store openings and improved performance at existing stores.

"We believe this momentum speaks directly to the health and vitality of our brand in the marketplace today," said Richard M. Frank, chairman and CEO for the company.

CEC said it continues to have a strong outlook for its future, projecting that its comparable store sales will grow 2 to 3 percent for the remainder of the year.

Comparable, or same-store, sales, rose 5.7 percent during the quarter.

Same-store sales is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

CEC also said it expects earnings per share from 56 cents to 60 cents per share for the third quarter and 20 to 22 cents for the fourth quarter.

Shares of the company jumped more than 9 percent in after-hours trading to $32.25.