No Fun For Dave & Buster's Investors After Earnings

Dave & Buster’s Entertainment, Inc. (NASDAQ: PLAY) released its fiscal first quarter financial results after the markets closed on Tuesday. The company said that it had $1.13 in earnings per share (EPS) and $363.6 million in revenue, compared with consensus estimates that called for $1.12 in EPS and $371.01 million in revenue. The same period from last year had $1.04 in EPS and $332.19 million in revenue.

During the fiscal first quarter, comparable store sales decreased 0.3% on a comparable 52-week basis. This comparable store sales increase was driven by a 0.6% decrease in walk-in sales and a 3.0% increase in special events sales.

At the same time, total revenues increased 9.5%. Ultimately, this growth was driven by a 11.9% increase in Amusements and Other revenue and a 6.1% increase in Food and Beverage revenue. The mix of Amusement and Other as a percentage of total revenue increased 130 basis points to 59.2% in the first quarter of 2019 from 57.9% in last year’s first quarter.

Looking ahead to the 2019 fiscal full year, the company now expects to see total revenues in the range of $1.36 billion to $1.39 billion with comparable store sales in the range of down 1.5% to up 0.5%. Consensus estimates are calling for $3.08 in EPS and $1.4 billion in revenue for the fiscal full year.

Brian Jenkins, CEO, commented:

We delivered robust revenue and EPS growth and our new store performance remained strong, but comparable store sales were below expectations largely due to the Easter shift, which proved unfavorable this year. We are fully committed to executing on our four strategic priorities to strengthen the brand and remain focused on creating significant shareholder value over the long term.

Shares of Dave & Buster’s closed Tuesday at $51.53, with a 52-week range of $42.78 to $67.05. The stock has a consensus analyst price target of $63.60. Following the announcement, the stock was down 17% at $42.81 in the after-hours session.