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What's in the Cards for Dave & Buster's (PLAY) Q2 Earnings?

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Dave & Buster’s Entertainment, Inc. PLAY is scheduled to report second-quarter fiscal 2021 results on Sep 9, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 700%.

Q2 Estimates

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 55 cents, against a loss of $1.19 reported in the year-ago quarter. The consensus mark for revenues stands at $355.5 million, suggesting growth of 599.3% from the prior-year quarter.

Factors to Note

Dave & Buster's fiscal second-quarter performance is likely to have benefited from stimulus payments, accelerated vaccinations and excellent operational execution. The company’s focus on initiatives like new service model, tablets and contactless order-pay experience might get reflected in the to-be-reported quarter’s results. Apart from great food or beverages, its entertainment business has been driving growth. Amusement and other revenues contributed 67.5% to total revenues in first-quarter fiscal 2021 compared with 58.5% in first-quarter 2019. The upside was primarily driven by reduction in discounting and a shift toward higher denomination Power Cards.

During first-quarter fiscal 2021, the company completed the transition toward a new menu with 28 offerings. Although the items are 33% lower than pre-pandemic levels, dishes like the IPA fish and chips, Hawaiian chicken sandwich and Mushroom Stout Burger have been resonating well with the guests. The company continues to focus on virtual kitchen concepts, optimize back-of-the-house operations and enhance its bar menu to enable seamless flow of food and bolster guest experience.

Robust performance of food and beverage, and amusement and other is likely to have driven the company’s performance in the quarter under review. The Zacks Consensus Estimate for food and beverage revenues is likely to witness an improvement of 611.8% year over year to $121 million. Amusement and other revenues are likely to see a whopping increase of 592.3% year over year to $234 million.

However, Dave & Buster’s soft comps trend over the past few quarters remains a concern. In first-quarter fiscal 2021, comparable store restaurant sales declined 35% compared with the 2019 level. The decline primarily stemmed from the pandemic-related operational restrictions.

Dave & Busters Entertainment, Inc. Price and EPS Surprise

Dave & Busters Entertainment, Inc. Price and EPS Surprise
Dave & Busters Entertainment, Inc. Price and EPS Surprise

Dave & Busters Entertainment, Inc. price-eps-surprise | Dave & Busters Entertainment, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Dave & Buster’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Dave & Buster’s has an Earnings ESP of +21.65%. 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

BJ's Restaurants, Inc. BJRI reported second-quarter fiscal 2021 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics increased year over year. The company’s adjusted earnings per share (EPS) of 26 cents beat the Zacks Consensus Estimate of 16 cents. In the prior-year quarter, the company had reported an adjusted loss of 99 cents per share. Quarterly revenues of $290.3 million outpaced the consensus mark of $285 million. The top line improved 126.7% year over year. The upside can primarily be attributed to the lifting of capacity and social-distancing restrictions, which boosted dining room capacity.

McDonald's Corporation MCD reported second-quarter 2021 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year. The company reported adjusted EPS of $2.37, which outpaced the Zacks Consensus Estimate of $2.12. The bottom line soared 259.1% year over year. Quarterly revenues of $5,887.9 million beat the Zacks Consensus Estimate of $5,629 million. The figure surged 56.5% year over year. The top line benefited from an increase in global comparable sales.

Starbucks Corporation SBUX reported solid third-quarter fiscal 2021 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate and increased year over year. The company reported adjusted EPS of $1.01, which beat the Zacks Consensus Estimate of 77 cents. In the prior-year quarter, the company had reported adjusted loss per share of 46 cents. Meanwhile, quarterly revenues of $7,496.5 million beat the Zacks Consensus Estimate of $7,243 million. The top line increased 77.6% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales.


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