Dave & Buster’s stock rises despite Q4 earnings miss
Yahoo Finance Live's Julie Hyman and Brian Sozzi discuss fourth quarter earnings for Dave & Buster's.
Video Transcript
JULIE HYMAN: Well, let's talk about some individual names, however. Dave & Buster's, or Dave & Busted, as you just called it a few moments ago, is one of them, although the stock-- I mean, I admit, I thought the stock price was wrong when we just showed it a few minutes ago in the pre-market because it was higher after taking quite a tumble earlier.
The company coming in with actually a smaller loss than was estimated, but revenue missing estimates, and the company's comparable store sales down 2.6% last quarter, if you compare it, actually, with 2019. So if you compare it with pre-pandemic, they're still not back to those levels. But what's going on here, Sozz?
BRIAN SOZZI: Well, I'll close this circle, Julie, just using your saying from before. I really like that one. I continue to want to use it, moving forward. I will say this. One, I have to knock Dave & Buster's first for calling out-- so their same store sales declined 6.8% in the most recent quarter versus 2019. That's how they compared it. But they essentially blamed 14 stores, or 14 locations had vaccine mandates. I don't like that. They shouldn't be necessarily highlighting that. It's still business operations. It's your fault--
JULIE HYMAN: Well, but--
BRIAN SOZZI: --if you can't go out there and find workers. I have to [INAUDIBLE]
JULIE HYMAN: Let me just correct what I said real quick, because I said the decline was 2.6%. That's if you exclude those stores. So it was still a decline of 2.6%.
BRIAN SOZZI: Still decline. I just, from an analytical standpoint, I don't like how they're pinning the blame on people here that may or may not want to get the vaccine. Those are the results-- deal with them. Now why is the stock-- why have you seen this reversal? One, the earnings call has been going on since 8:30, one. Two, their same store sales for the first eight weeks of the first quarter, they are off 5.4%, and it looks to be driven by people just walking in and going to Dave & Buster's. Sales from those customers up 9.1%.
What a red flag, though, continues to be the event business. This is where Dave & Buster's has really minted money pre-pandemic. The event business for Dave & Buster's, those sales down 42%. And that is a major concern moving forward.
JULIE HYMAN: Yeah, I don't know. Envisioning my kid's birthday party at a Dave & Buster's actually pre-pandemic, there at Chuck E. Cheese--
BRIAN SOZZI: I'll add this point.
JULIE HYMAN: It's a lot. It's a lot.
BRIAN SOZZI: I feel you. I will add this. I think Dave & Buster's is taking on a lot of competition from Top Golf. Top Golf is opening up more and more locations at a very rapid clip. They're, of course, owned by Callaway Golf. It is turning into a very big business that is competing directly with Dave & Buster's' dominance. These are two unique assets in the marketplace, but still, Top Golf is coming on very strong. Love that place. It's great.
JULIE HYMAN: Are there kids' birthday parties at Top Golf?
BRIAN SOZZI: Yeah, grab a golf club. Hit the ball far. Grab some fruit juice. Party on.
JULIE HYMAN: Hmm, I'm going to have to look into that. I'm going to have to look into that a little bit more. I'm trying to imagine my children having a birthday party at Top Golf also and having trouble with that concept. But let's move on.
BRIAN SOZZI: Uncle Sozz.
