Dave & Buster's Entertainment, Inc. (PLAY - Free Report) posted better-than-expected second-quarter fiscal 2017 results wherein both the top and bottom lines surpassed the Zacks Consensus Estimate.
However, the company’s shares declined over 6% in afterhours trading on Sep 5, mirroring investor concerns surrounding the company’s lowered comparable store sales (comps) guidance for fiscal 2017.
Earnings & Revenues
Dave & Buster's earnings of 71 cents per share in the fiscal second quarter beat the Zacks Consensus Estimate of 5 cents by 29.1%. Also, the bottom line jumped 42% from the year-ago figure of 50 cents on higher revenues. Notably, results in the reported quarter included certain non-recurring items.
The company reported revenues of $280.8 million in the quarter, just above the Zacks Consensus Estimate of $280.5 million. Meanwhile, the top line improved 14.9% year over year primarily owing to consistent unit expansion.
Turning to category sales, Food and Beverage revenues rose 10.2% year over year to $118.7 million in the reported quarter. Also, Amusement and Other revenues increased 18.6% to $162.1 million.
Behind the Headline Numbers
Comps increased 1.1% year over year in the fiscal second quarter, driven by a 1.1% rise in walk-in sales and 1.6% improvement in special events sales. Though the figure was slightly better than 1% growth recorded in the prior-year quarter, it was below a 2.2% increase in the last quarter.
Moreover, comps came in below the company’s expectation, given the continued challenging environment for casual dining.
Earnings before interest, taxes, and amortization (EBITDA) rose 11.5% to $64 million. Meanwhile, EBITDA margins decreased 70 basis points to 22.8% from 23.5% in the year-ago quarter.
Fiscal 2017 Outlook
Dave & Buster's continues to expect fiscal 2017 revenues in the range of $1.160 billion to $1.170 billion.
The company now projects comps to increase in the band of 1% to 2% on a comparable 52-week basis compared with prior expectation of an increase in the range of 2% to 3%.
EBITDA is now anticipated to be between $270 million to $276 million, down from $276 million to $282 million, projected earlier.
In fiscal 2017, the company expects to open 14 new stores (earlier 12 openings were anticipated).
Currently, 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.
Peer Releases
The Cheesecake Factory Inc. (CAKE - Free Report) reported second-quarter fiscal 2017 adjusted earnings per share of 78 cents beating the Zacks Consensus Estimate of 76 cents by 2.6%. However, the bottom line remained flat on a year-over-year basis.
In second-quarter fiscal 2017, BJ’s Restaurants, Inc. (BJRI - Free Report) posted earnings of 49 cents per share that fell short of the Zacks Consensus Estimate of 51 cents by 3.9%. Moreover, the bottom line decreased 12.5% year over year primarily due to increased expenses.
Buffalo Wild Wings, Inc.’s second-quarter adjusted earnings of 66 cents per share plunged 50.7% year over year and missed the Zacks Consensus Estimate of $1.01 by 34.7%.
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Dave & Buster's Entertainment, Inc. (PLAY - Free Report) posted better-than-expected second-quarter fiscal 2017 results wherein both the top and bottom lines surpassed the Zacks Consensus Estimate.
However, the company’s shares declined over 6% in afterhours trading on Sep 5, mirroring investor concerns surrounding the company’s lowered comparable store sales (comps) guidance for fiscal 2017.
Earnings & Revenues
Dave & Buster's earnings of 71 cents per share in the fiscal second quarter beat the Zacks Consensus Estimate of 5 cents by 29.1%. Also, the bottom line jumped 42% from the year-ago figure of 50 cents on higher revenues. Notably, results in the reported quarter included certain non-recurring items.
The company reported revenues of $280.8 million in the quarter, just above the Zacks Consensus Estimate of $280.5 million. Meanwhile, the top line improved 14.9% year over year primarily owing to consistent unit expansion.
Turning to category sales, Food and Beverage revenues rose 10.2% year over year to $118.7 million in the reported quarter. Also, Amusement and Other revenues increased 18.6% to $162.1 million.
Behind the Headline Numbers
Comps increased 1.1% year over year in the fiscal second quarter, driven by a 1.1% rise in walk-in sales and 1.6% improvement in special events sales. Though the figure was slightly better than 1% growth recorded in the prior-year quarter, it was below a 2.2% increase in the last quarter.
Moreover, comps came in below the company’s expectation, given the continued challenging environment for casual dining.
Earnings before interest, taxes, and amortization (EBITDA) rose 11.5% to $64 million. Meanwhile, EBITDA margins decreased 70 basis points to 22.8% from 23.5% in the year-ago quarter.
Fiscal 2017 Outlook
Dave & Buster's continues to expect fiscal 2017 revenues in the range of $1.160 billion to $1.170 billion.
The company now projects comps to increase in the band of 1% to 2% on a comparable 52-week basis compared with prior expectation of an increase in the range of 2% to 3%.
EBITDA is now anticipated to be between $270 million to $276 million, down from $276 million to $282 million, projected earlier.
In fiscal 2017, the company expects to open 14 new stores (earlier 12 openings were anticipated).
Currently, 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.
Peer Releases
The Cheesecake Factory Inc. (CAKE - Free Report) reported second-quarter fiscal 2017 adjusted earnings per share of 78 cents beating the Zacks Consensus Estimate of 76 cents by 2.6%. However, the bottom line remained flat on a year-over-year basis.
In second-quarter fiscal 2017, BJ’s Restaurants, Inc. (BJRI - Free Report) posted earnings of 49 cents per share that fell short of the Zacks Consensus Estimate of 51 cents by 3.9%. Moreover, the bottom line decreased 12.5% year over year primarily due to increased expenses.
Buffalo Wild Wings, Inc.’s second-quarter adjusted earnings of 66 cents per share plunged 50.7% year over year and missed the Zacks Consensus Estimate of $1.01 by 34.7%.
4 Surprising Tech Stocks to Keep an Eye On
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
See Stocks Now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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