Dave & Buster's Entertainment Inc (PLAY) Faces Revenue Dip Amid Strategic Growth Efforts
Third quarter revenue declined by 3.0% year-over-year to $466.9 million.
Net loss recorded at $5.2 million, with adjusted net income at $0.4 million.
Adjusted EBITDA decreased by 5.2% from the same quarter last year.
Company executed a $100 million share repurchase and a sale leaseback transaction worth $86 million.
On December 5, 2023, Dave & Buster's Entertainment Inc (NASDAQ:PLAY) released its 8-K filing, reporting financial results for the third quarter ended October 29, 2023. The company, known for its entertainment and dining venues, experienced a 3.0% decrease in third-quarter revenue compared to the same period in 2022, totaling $466.9 million. The net loss for the quarter was $5.2 million, or $(0.12) per diluted share, a downturn from the net income of $1.9 million, or $0.04 per diluted share, in the third quarter of 2022.
Financial Performance and Strategic Initiatives
Adjusted EBITDA for the quarter was $81.6 million, representing 17.5% of revenue, which is a 5.2% decrease from the third quarter of 2022. Despite the decline in quarterly revenue and adjusted EBITDA, year-to-date revenue increased by 14.7% to $1.61 billion, and adjusted EBITDA for the same period rose by 18.1% to $403.9 million.
PLAY's CEO, Chris Morris, commented on the company's strategic initiatives, stating:
During the quarter, we continued to make significant progress against our key growth initiatives... We also continued to open new stores at highly attractive returns on our investment and have continued to opportunistically return capital to shareholders in a highly accretive manner."
The company's liquidity position remained strong, ending the quarter with $554.2 million, including cash and availability under its revolving credit facility. Additionally, PLAY repurchased 2.8 million shares at a cost of $100 million during the quarter and executed a sale leaseback transaction for four properties, generating $85.8 million in proceeds.
Income Statement and Balance Sheet Highlights
PLAY's income statement revealed that entertainment revenues decreased to $302.0 million, while food and beverage revenues slightly decreased to $164.9 million. The cost of products sold and operating expenses accounted for a significant portion of the revenue, with operating income reaching $18.6 million, or 3.9% of revenue.
The balance sheet showed a total asset value of $3.69 billion, with cash and cash equivalents at $64.0 million. Total liabilities stood at $419.3 million, and long-term debt, net, was reported at $1.28 billion. The company's stockholders' equity amounted to $211.6 million.
Outlook and Investor Relations
Despite the challenges faced in the third quarter, Dave & Buster's remains focused on achieving its $1 billion AEBITDA target in the coming years. The company's management team is set to discuss these results in a conference call and further elaborate on their strategies to navigate the current macroeconomic environment.
For detailed financial information and future updates, investors and analysts are encouraged to review the company's Quarterly Report on Form 10-Q and follow the investor conference call and webcast.
As Dave & Buster's Entertainment Inc (NASDAQ:PLAY) navigates through a complex macroeconomic landscape, the company's strategic initiatives and share repurchase program reflect a commitment to driving growth and shareholder value. With a focus on long-term targets and operational efficiency, PLAY continues to adapt and evolve in the competitive entertainment and dining industry.
Explore the complete 8-K earnings release (here) from Dave & Buster's Entertainment Inc for further details.
This article first appeared on GuruFocus.
