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Dave & Buster's (PLAY) Q3 Earnings Top Estimates, Revenues Lag

Dave & Buster's Entertainment, Inc. PLAY reported mixed third-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both metrics declined on a year-over-year basis. Following the results, the company’s shares dropped 3.9% during the after-hours trading session on Dec 5.

Earnings & Revenues in Detail

During the fiscal first quarter, the company reported adjusted earnings per share (EPS) of 1 cent, against the Zacks Consensus Estimate of a loss of 22 cents. In the year-ago quarter, it reported an adjusted EPS of 10 cents.

Quarterly revenues of $466.9 million missed the consensus mark of $472 million. In the prior-year quarter, the company reported revenues of $481.2 million. A complex macroeconomic backdrop and difficult prior-year comparisons (on account of robust post-COVID demand) added to the negatives.

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

 

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

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

 

Food and Beverage revenues (35.3% of total revenues in the reported quarter) dropped 0.6% year over year to $164.9 million. Entertainment revenues (64.7%) declined 4.2% year over year to $302 million.

Comps Details

During the quarter under discussion, pro-forma comparable store sales (including Main Event branded stores) declined 7.8% year over year but increased 8.1% from 2019 levels.

Operating Highlights

During the quarter under discussion, operating income amounted to $18.6 million compared with $30.1 million reported in the prior-year quarter. The operating margin was 3.9% compared with 6.3% reported in the year-ago quarter. Our estimate for the metric was 2%.

Adjusted EBITDA came in at $81.6 million compared with $86.1 million reported in the year-earlier quarter.

Balance Sheet

As of Oct 29, 2023, cash and cash equivalents were $64 million compared with $181.6 million as of Jan 29, 2023.

During the fiscal third quarter, the company repurchased nearly 2.8 million shares for an aggregate cost of $100 million. As of Oct 29, the company had $100 million available for the buyback program.

At the fiscal third-quarter end, net long-term debt totaled $1,281.3 million compared with $1,222.7 million at the end of fourth-quarter fiscal 2022.

Zacks Rank & Key Picks

Dave & Buster currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector include:

Wingstop Inc. WING sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 28.9%, on average. The stock has surged 62.6% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.

The Zacks Consensus Estimate for Wingstop’s 2024 sales and EPS suggests rises of 15.6% and 17.2%, respectively, from the year-ago period’s levels.

Brinker International, Inc. EAT sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 223.6%, on average. Shares of EAT have increased 14.8% in the past year.

The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and EPS indicates a 5.1% and a 26.2% rise, respectively, from the year-ago period’s levels.

FAT Brands Inc. FAT currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 36.6%, on average. The stock has increased 0.3% in the past year.

The Zacks Consensus Estimate for FAT Brands’ 2024 sales and EPS suggests an increase of 35.6% and 27.4%, respectively, from the year-ago period’s levels.

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Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report

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FAT Brands Inc. (FAT) : Free Stock Analysis Report

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