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Dave & Buster’s misses on Q2 earnings, stock declines

Yahoo Finance Live anchors discuss second-quarter earnings for Dave & Buster’s.

Video Transcript

JULIE HYMAN: Let's get back to movers here and talk about another leisure activity besides Top Golf, and that's Dave & Buster's. That stock has been under a little bit of pressure as well, now under a lot more pressure. It's down by 8% at the moment. And that's because the company talked about a contraction in its operating margin.

If you look at the overall numbers here, they missed estimates on the bottom line. Top line numbers did beat estimates. Revenue rose by 24%. As you can see here, that came out ahead of estimates. So definitely a disconnect here between the traffic and the stores, the revenue that they're making, and what it's costing them.

BRIAN SOZZI: Yeah, a lot going on with this quarter, Julie. The team, new team, new CEO, they just bought a business called Main Event. So they're merging that inside of Dave & Buster's. They teased an investor day, which I'm a big fan of always in the first later part of the first quarter of next year, so something to be on the lookout for.

But I am a little surprised by this market reaction. They did note that business trends or sales trends through the first five weeks of the third quarter, same store sales up 22.1%. That is a pretty good number, considering everything going on in this economy. People are going to Dave & Buster's to enjoy a night out, even with gas prices still hovering around $4 a gallon. The third quarter looks to have started off pretty well for them.