What's Pulling Dave & Buster's Down

When Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) reported its fiscal second-quarter financial results after the markets closed on Tuesday, the firm said that it had $0.90 in earnings per share (EPS) and $344.6 million in revenue. The consensus estimates had called for $0.84 in EPS and $344.54 million in revenue, and in the same period of last year the company posted EPS of $0.84 on revenue of $319.2 million.

During the most recent quarter, total revenues grew 8.0% year over year. Comparable store sales decreased 1.8% in the second quarter 2019, compared to a decrease of 2.4% in the comparable period last year. The decrease in comparable store sales was driven by a 2.0% decline in walk-in sales, which was partially offset by a 0.1% increase in special events sales.

Food and Beverage revenues increased 5.9% to $137.92 million, while Amusement and other revenues increased 9.4% to $206.68 million. Comparable store sales decreased 0.8% in Amusements & Other and 3.2% in Food & Beverage.

Looking ahead to the fiscal full year, the company expects to see total revenues in the range of $1.338 billion to $1.359 billion and comparable sales declining 3.5% to 2.0%. Note that these numbers are down from the previous guidance calling for total revenues between $1.365 billion and $1.390 billion and comparable sales of −1.5% to 0.5%. Consensus estimates call for $2.95 in EPS and $1.37 billion in revenue for year.

CEO Brian Jenkins commented:

We continue to deliver strong revenue and earnings per share growth – including record second quarter sales, EBITDA and EPS – while investing for the future and returning substantial capital to shareholders through dividends and share repurchases. We are executing on five near-term priorities to improve performance and capitalize on the growing consumer demand for our offerings. By realizing operational efficiencies and cost savings, we will fund investments to fuel comp sales growth going forward. We are acting decisively to accelerate near and long-term value creation, and to deliver superior returns for all Dave & Buster’s shareholders.

Shares of Dave & Buster’s traded down over 9% to $40.82 on Wednesday, in a 52-week range of $37.21 to $67.05. The consensus price target is $49.27.