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Dave & Buster's (PLAY) to Post Q3 Earnings: What's in Store?

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Dave & Buster’s Entertainment, Inc. PLAY is scheduled to report third-quarter fiscal 2021 results on Dec 7, after market close. In the last reported quarter, the company delivered an earnings surprise of 87.7%.

Q3 Expectations

The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at 12 cents per share, indicating an improvement of 111.9% from a loss of $1.01 reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $320.5 million. The metric suggests an increase of 193.9% from the year-ago quarter’s figure.

Dave & Buster's Entertainment, Inc. Price and EPS Surprise

Dave & Buster's Entertainment, Inc. Price and EPS Surprise
Dave & Buster's Entertainment, Inc. Price and EPS Surprise

Dave & Buster's Entertainment, Inc. price-eps-surprise | Dave & Buster's Entertainment, Inc. Quote

Factors at Play

Dave & Buster's fiscal third-quarter performance is likely to have benefited from technological upgrades, entertainment offerings and menu innovations. A rise in mobile web adoption coupled with the rollout of new technology and upgradation in WiFi capability and equipments is likely to have boosted the fiscal third-quarter top line. This along with reductions in pre-opening expenses and operating costs, is likely to have aided margins in the to-be-reported quarter.

Increased investments, in terms of entertainment offerings, are expected to have benefitted the company in the fiscal third quarter. In the previous quarter, the company onboarded new creative and media buying agencies and revamped its brand message and media strategy. The initiative coupled with the rollout of new menu and games is likely to have extended its reach and increased visit frequency in the fiscal third quarter.

Robust performance of food and beverage, and amusement and other is likely to get reflected in the company’s quarterly numbers. The Zacks Consensus Estimate for food and beverage revenues is likely to witness an improvement of 186.8% year over year to $110 million. Amusement and other revenues are likely to record a surge of 193% year over year to $208 million.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Dave & Buster’s this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates.

Earnings ESP: Dave & Buster’s has an Earnings ESP of +13.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Papa John’s International, Inc. PZZA reported robust third-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. During the fiscal third quarter, the company reported adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate of 69 cents by 20.3%. The bottom line surged 137.1% from 35 cents in the prior-year quarter. Quarterly revenues of $512.8 million beat the consensus mark of $501 million by 2.3%. The top line increased 8.4% on a year-over-year basis.

Papa John’s benefited from solid comparable sales in North America, driven by strong customer retention and innovation strategies. The company witnessed a rise in company-owned restaurant revenues, franchise royalties and commissary sales. International revenues benefited from higher franchise royalties and unit growth. This Zacks Rank #2 company’s shares have gained 47.4% so far this year compared with the industry’s 4.3% growth

The Cheesecake Factory Incorporated CAKE reported drab third-quarter fiscal 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Adjusted earnings per share (EPS) was 65 cents, lagging the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company had reported an adjusted loss of 33 cents per share. This was primarily due to a rise in labor and other operating expenses.

Cheesecake Factory gained from a solid off-premise sales growth. Quarter-to-date (through Nov 2), the off-premise model contributed 28% to total sales. Shares of the company have gained 5.4% so far this year. Cheesecake Factory carries a Zacks Rank #3.

YUM! Brands, Inc. YUM reported strong third-quarter 2021 results, with earnings and revenues topping the Zacks Consensus Estimate. Both metrics improved year over year. During third-quarter 2021, the company’s adjusted earnings of $1.22 beat the Zacks Consensus Estimate of $1.06. In the prior-year quarter, the company had reported adjusted earnings of $1.01. Quarterly revenues of $1,606 million outpaced the consensus mark of $1,584 million. The top line rose 11% year over year.

YUM! Brands’ results in the quarter benefited from strong digital sales, robust unit development and a diverse global business model. The company strengthened its digital capabilities with the acquisition of Dragontail, which provides AI-based integrated kitchen order management and delivery technologies. The initiative paves the path for strengthening store operations and enhancing customer experience. During the third quarter, YUM reported digital sales of more than $5 billion. Shares of this Zacks Rank #3 company have gained 16.6% so far this year.


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