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Why Is Dave & Buster's (PLAY) Up 4.3% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for Dave & Buster's Entertainment, Inc. (PLAY - Free Report) . Shares have added about 4.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PLAY due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dave & Buster’s Q4 Earnings Beat
Dave & Buster's posted decent results in the fourth quarter of fiscal 2017, wherein earnings surpassed the Zacks Consensus Estimate while revenues met the same.
Adjusted earnings of 61 cents surpassed the consensus estimate of 59 cents by 3.4%. Earnings, however, declined 3.2% year over year. Decrease in margin due to high operating costs might have led earnings to fall. Also, weak comps might have had affected the bottom line.
Detailed Revenue Discussion
Quarterly revenues of $304.9 million were almost in line with the consensus estimate. Revenues increased 12.9% from the prior-year quarter, favored by the additional week in fiscal 2017 compared with fiscal 2016. The additional week increased total revenues by $19.7 million.
Overall comps declined 5.9% in the fiscal fourth quarter of 2017, comparing unfavorably with a 3.2% increase in the year-ago quarter. The decline in comps was due to a 6.4% dip in walk-in sales and 2.9% decrease in special events sales.
Non-comparable store revenues in the quarter increased 67.5% from the year-ago quarter to $73.6 million.
Food and Beverage revenues (45.5% of total revenues in fiscal fourth quarter of 2017) increased 10% year over year to $138.6 million, whereas Amusement and Other revenues (54.5%) increased 15.3% to $166.3 million.
However, comps for Food and Beverage declined 7.8% in the quarter. Also, Amusement and Other witnessed a comps fall of 4.2%.
Operating Highlights
Fiscal fourth quarter operating margin declined roughly 260 basis points (bps) year over year.
Net income in the quarter totaled $35.6 million, up from $27.4 million in the prior-year quarter. Net income was driven by the additional week and tax benefits.
Adjusted EBITDA increased 10.7% to $82.5 million in the fourth quarter of fiscal 2017 from $74.5 million in the same period last year. The additional week increased adjusted EBITDA by $4.3 million.
EBITDA margin however decreased approximately 60 bps year over year.
Balance Sheet
As of Feb 4, 2018, cash and cash equivalents were $18.8 million compared with $20.1 million as of Jan 29, 2017.
Long-term debt totaled $351.2 million at the end of fiscal 2017, up from $256.6 million at the end of fiscal 2016.
During fiscal year 2017, the company repurchased roughly 2.6 million shares of its common stock for $151.9 million.
Cumulatively, as of Mar 28, 2018, management repurchased approximately 3.7 million shares for $202.8 million. As of the same date, Dave & Buster’s had $97.2 million remaining under its current share repurchase authorization.
Key Highlights of Fiscal 2017 Results
Total revenues in fiscal 2017 came in at $1.1 billion, which is within the earlier anticipated range. Revenues increased 13.4% from the year-ago quarter. Comps in the fiscal year declined 0.9%.
Adjusted earnings of $2.60 per share increased 23.8% from the prior-year quarter. Adjusted EBITDA increased 15.8% to $302.7 million from $261.5 million in fiscal 2016.
Store Development
Dave & Buster’s opened five stores during the fiscal fourth quarter in Brandon (Tampa), Florida; Woodbridge, New Jersey; Auburn, Washington; White Marsh (Baltimore), Maryland; and Bayamon, Puerto Rico, totaling 14 stores for the fiscal year.
Total capital additions (net of tenant improvement allowances) during fiscal year 2017 were $183.0 million.
Fiscal 2018 Outlook
The company expects revenues in the range of $1.20-$1.24 billion. Comps are anticipated to decline in the low-to-mid single digits.
The company expects to open 14 to 15 new stores.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
Dave & Buster's Entertainment, Inc. Price and Consensus
At this time, PLAY has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, PLAY has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Dave & Buster's (PLAY) Up 4.3% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Dave & Buster's Entertainment, Inc. (PLAY - Free Report) . Shares have added about 4.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is PLAY due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dave & Buster’s Q4 Earnings Beat
Dave & Buster's posted decent results in the fourth quarter of fiscal 2017, wherein earnings surpassed the Zacks Consensus Estimate while revenues met the same.
Adjusted earnings of 61 cents surpassed the consensus estimate of 59 cents by 3.4%. Earnings, however, declined 3.2% year over year. Decrease in margin due to high operating costs might have led earnings to fall. Also, weak comps might have had affected the bottom line.
Detailed Revenue Discussion
Quarterly revenues of $304.9 million were almost in line with the consensus estimate. Revenues increased 12.9% from the prior-year quarter, favored by the additional week in fiscal 2017 compared with fiscal 2016. The additional week increased total revenues by $19.7 million.
Overall comps declined 5.9% in the fiscal fourth quarter of 2017, comparing unfavorably with a 3.2% increase in the year-ago quarter. The decline in comps was due to a 6.4% dip in walk-in sales and 2.9% decrease in special events sales.
Non-comparable store revenues in the quarter increased 67.5% from the year-ago quarter to $73.6 million.
Food and Beverage revenues (45.5% of total revenues in fiscal fourth quarter of 2017) increased 10% year over year to $138.6 million, whereas Amusement and Other revenues (54.5%) increased 15.3% to $166.3 million.
However, comps for Food and Beverage declined 7.8% in the quarter. Also, Amusement and Other witnessed a comps fall of 4.2%.
Operating Highlights
Fiscal fourth quarter operating margin declined roughly 260 basis points (bps) year over year.
Net income in the quarter totaled $35.6 million, up from $27.4 million in the prior-year quarter. Net income was driven by the additional week and tax benefits.
Adjusted EBITDA increased 10.7% to $82.5 million in the fourth quarter of fiscal 2017 from $74.5 million in the same period last year. The additional week increased adjusted EBITDA by $4.3 million.
EBITDA margin however decreased approximately 60 bps year over year.
Balance Sheet
As of Feb 4, 2018, cash and cash equivalents were $18.8 million compared with $20.1 million as of Jan 29, 2017.
Long-term debt totaled $351.2 million at the end of fiscal 2017, up from $256.6 million at the end of fiscal 2016.
During fiscal year 2017, the company repurchased roughly 2.6 million shares of its common stock for $151.9 million.
Cumulatively, as of Mar 28, 2018, management repurchased approximately 3.7 million shares for $202.8 million. As of the same date, Dave & Buster’s had $97.2 million remaining under its current share repurchase authorization.
Key Highlights of Fiscal 2017 Results
Total revenues in fiscal 2017 came in at $1.1 billion, which is within the earlier anticipated range. Revenues increased 13.4% from the year-ago quarter. Comps in the fiscal year declined 0.9%.
Adjusted earnings of $2.60 per share increased 23.8% from the prior-year quarter. Adjusted EBITDA increased 15.8% to $302.7 million from $261.5 million in fiscal 2016.
Store Development
Dave & Buster’s opened five stores during the fiscal fourth quarter in Brandon (Tampa), Florida; Woodbridge, New Jersey; Auburn, Washington; White Marsh (Baltimore), Maryland; and Bayamon, Puerto Rico, totaling 14 stores for the fiscal year.
Total capital additions (net of tenant improvement allowances) during fiscal year 2017 were $183.0 million.
Fiscal 2018 Outlook
The company expects revenues in the range of $1.20-$1.24 billion. Comps are anticipated to decline in the low-to-mid single digits.
The company expects to open 14 to 15 new stores.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
Dave & Buster's Entertainment, Inc. Price and Consensus
Dave & Buster's Entertainment, Inc. Price and Consensus | Dave & Buster's Entertainment, Inc. Quote
VGM Scores
At this time, PLAY has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, PLAY has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.