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Dave & Buster's (PLAY) Stock Rallies on Q2 Earnings Beat
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Shares of Dave & Buster's Entertainment, Inc. (PLAY - Free Report) rallied 7.9% following the company’s better-than-expected results in second-quarter fiscal 2018. Both the top and bottom lines improved year over year. Over the past year, shares of Dave &Buster’s have gained 19.7%, outperforming the industry’s rally of 7.3%.
Earnings came in at 84 cents per share surpassing the Zacks Consensus Estimate of 74 cents by 13.5% in the reported quarter. The bottom-line figure also increased 18.3% on a year-over-year basis. Results were aided by solid revenues generated from the Food and Beverage as well as the Amusement and Other segments.
Detailed Revenue Discussion
Quarterly revenues of $319.2 million outpaced the consensus mark by 0.8%. The top-line figure also increased 13.7% from the prior-year quarter.
Overall comps declined 2.4% in the second quarter, against an increase of1.1% in the year-ago quarter. The decline in comps can be attributed to a dip of 2.6% in walk-in sales offset by a 0.1% increase in special events sales. However, the company remains confident about returning to growth despite decline in comps.
Non-comparable store revenues in the reported quarter increased 99.6% from the year-ago quarter to $78.8 million.
Food and Beverage revenues (40.8% of total revenues in the second quarter) increased 9.7% year over year to $130.2 million, while Amusement and Other revenues (59.2%) rose 16.6% to $188.9 million.
However, comps at the Food and Beverage segment fell 4.1% in the reported quarter. Further, Amusement and Other witnessed a comps decline of 1.2%.
Dave & Buster's Entertainment, Inc. Price, Consensus and EPS Surprise
In the reported quarter, operating margin increased roughly 50 basis points (bps) year over year to 14.4%.
Net income in the second quarter totaled $33.8 million, up from $30.4 million in the prior-year quarter. Adjusted EBITDA increased 16.7% to $82.4 million compared with $70.6 million in the same period last year. However, EBITDA margin decreased 100 bps year over year.
Balance Sheet
As of Aug 5, 2018, cash and cash equivalents were $22.4 million compared with $18.8 million as of Feb 4, 2018.
Long-term debt totaled $346.9 million at the end of quarter, down from $351.2 million at the end of 2017. During the second quarter, the company expanded share repurchase authorization by $100 million and initiated quarterly dividend of 15 cents per share.
During the second quarter, the company repurchased roughly 729,000 shares for $33.7 million, with an additional 212,000 shares for $11.3 million through Sep 11, 2018. Cumulatively it had repurchased 4.8 million shares for $253.1 million.
Store Development
Dave & Buster’s had launched five stores during the second quarter. Currently, the company has eight stores under construction.
Fiscal 2018 Outlook Raised
Dave & Buster’s expects 2018 revenues in the range of $1.230-$1.255 billion, up from the previously guided range of $1.200-$1.240 billion.
Comps are anticipated to decrease by low-single digits as compared with the prior expectation of comps decline by low to mid-single digits.
Net income is anticipated to come in between $101 million and $111 million, up from the prior guidance of $95-$110 million.
The company maintains that it will open 14 to 15 new stores, representing 13% to 14% unit growth in fiscal 2018.
McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.99 per share surpassed the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies).
Darden (DRI - Free Report) reported better-than-expected results in the fourth quarter of fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%. The bottom line also increased 17.8% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results for the second quarter of 2018. Adjusted earnings of $2.87 per share topped the Zacks Consensus Estimate of $2.78 by 3.2%. The bottom line also grew 23.7% from the year-ago quarter number backed by increased revenues and lower food costs.
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Dave & Buster's (PLAY) Stock Rallies on Q2 Earnings Beat
Shares of Dave & Buster's Entertainment, Inc. (PLAY - Free Report) rallied 7.9% following the company’s better-than-expected results in second-quarter fiscal 2018. Both the top and bottom lines improved year over year. Over the past year, shares of Dave &Buster’s have gained 19.7%, outperforming the industry’s rally of 7.3%.
Earnings came in at 84 cents per share surpassing the Zacks Consensus Estimate of 74 cents by 13.5% in the reported quarter. The bottom-line figure also increased 18.3% on a year-over-year basis. Results were aided by solid revenues generated from the Food and Beverage as well as the Amusement and Other segments.
Detailed Revenue Discussion
Quarterly revenues of $319.2 million outpaced the consensus mark by 0.8%. The top-line figure also increased 13.7% from the prior-year quarter.
Overall comps declined 2.4% in the second quarter, against an increase of1.1% in the year-ago quarter. The decline in comps can be attributed to a dip of 2.6% in walk-in sales offset by a 0.1% increase in special events sales. However, the company remains confident about returning to growth despite decline in comps.
Non-comparable store revenues in the reported quarter increased 99.6% from the year-ago quarter to $78.8 million.
Food and Beverage revenues (40.8% of total revenues in the second quarter) increased 9.7% year over year to $130.2 million, while Amusement and Other revenues (59.2%) rose 16.6% to $188.9 million.
However, comps at the Food and Beverage segment fell 4.1% in the reported quarter. Further, Amusement and Other witnessed a comps decline of 1.2%.
Dave & Buster's Entertainment, Inc. Price, Consensus and EPS Surprise
Dave & Buster's Entertainment, Inc. Price, Consensus and EPS Surprise | Dave & Buster's Entertainment, Inc. Quote
Operating Highlights
In the reported quarter, operating margin increased roughly 50 basis points (bps) year over year to 14.4%.
Net income in the second quarter totaled $33.8 million, up from $30.4 million in the prior-year quarter. Adjusted EBITDA increased 16.7% to $82.4 million compared with $70.6 million in the same period last year. However, EBITDA margin decreased 100 bps year over year.
Balance Sheet
As of Aug 5, 2018, cash and cash equivalents were $22.4 million compared with $18.8 million as of Feb 4, 2018.
Long-term debt totaled $346.9 million at the end of quarter, down from $351.2 million at the end of 2017. During the second quarter, the company expanded share repurchase authorization by $100 million and initiated quarterly dividend of 15 cents per share.
During the second quarter, the company repurchased roughly 729,000 shares for $33.7 million, with an additional 212,000 shares for $11.3 million through Sep 11, 2018. Cumulatively it had repurchased 4.8 million shares for $253.1 million.
Store Development
Dave & Buster’s had launched five stores during the second quarter. Currently, the company has eight stores under construction.
Fiscal 2018 Outlook Raised
Dave & Buster’s expects 2018 revenues in the range of $1.230-$1.255 billion, up from the previously guided range of $1.200-$1.240 billion.
Comps are anticipated to decrease by low-single digits as compared with the prior expectation of comps decline by low to mid-single digits.
Net income is anticipated to come in between $101 million and $111 million, up from the prior guidance of $95-$110 million.
The company maintains that it will open 14 to 15 new stores, representing 13% to 14% unit growth in fiscal 2018.
Zacks Rank & Peer Releases
Dave & Buster’s carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.99 per share surpassed the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies).
Darden (DRI - Free Report) reported better-than-expected results in the fourth quarter of fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%. The bottom line also increased 17.8% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results for the second quarter of 2018. Adjusted earnings of $2.87 per share topped the Zacks Consensus Estimate of $2.78 by 3.2%. The bottom line also grew 23.7% from the year-ago quarter number backed by increased revenues and lower food costs.
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
See Zacks Best EV Stock Free >>