Dave & Buster's (PLAY) Q2 Earnings Top, Stock Down On View Cut
Zacks Investment Research | Sep 10, 2019 10:49PM ET
Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) reported mixed second-quarter fiscal 2019 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues marginally missed the same. This marked the company’s second straight quarter of revenue miss. Furthermore, Dave & Buster's lowered its guidance for the fiscal year.
Following the quarterly results and bleak view for fiscal 2019, the stock declined 14.2% in after-hours trading on Sep 10.
Adjusted earnings in the first quarter came in at 90 cents per share, which outpaced the Zacks Consensus Estimate of 86 cents and increased 7.1% year over year. Results were aided by revenue and unit growth.
Let’s delve deeper into numbers.
Detailed Revenue Discussion
Quarterly revenues of $344.6 million in the quarter under review marginally missed the consensus mark of $345 million. However, the top line rose 8% from the prior-year quarter number. The upside was primarily driven by consistent unit growth and robust Amusements and Other revenues as well as Food and Beverage revenues.
Food and Beverage revenues (40% of total revenues in the fiscal second quarter) increased 5.9% year over year to $137.9 million, and Amusement and Other revenues (60%) rose 9.4% to $206.7 million.
Meanwhile, overall comps decreased 1.8% in the fiscal second quarter, comparing favorably with a 2.4% decline in the year-ago quarter. This decrease can be attributed to a 2% decrease in walk-in sales, which overshadowed a 0.1% increase in special events sales. Moreover, comps at Amusements & Other decreased 0.8%, the same declined 3.2% at Food & Beverage.
Non-comparable store revenues in the reported quarter increased 62.3% from the year-ago quarter to $77.2 million.
Operating Highlights
In the second quarter, operating margin contracted roughly 100 basis points (bps) year over year to 13.4%.
Net income totaled $32.4 million, up from $33.8 million registered in the prior-year quarter. Adjusted EBITDA increased 4.4% to $86 million compared with $82.4 million in the same period last year. Meanwhile, the EBITDA margin contracted 80 bps year over year to 25%.
Dave & Buster's Entertainment, Inc. Price, Consensus and EPS Surprise
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