We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dave & Buster's (PLAY) Down 10.7% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have lost about 10.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dave & Buster's due for a breakout? 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 catalysts.
Dave & Buster's Q2 Loss Narrower Than Expected
Dave & Buster's reported second-quarter fiscal 2020 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line lagged the same. However, both earnings and revenues declined sharply year over year.
The company posted adjusted loss $1.19 per share, which was narrower than the Zacks Consensus Estimate of loss of $1.44 by 17.4%. The company had reported earnings per share of 90 cents in the year-ago quarter.
Let’s delve into the quarterly numbers.
Detailed Revenue Discussion
Quarterly revenues of $50.8 million missed the consensus mark of $79 million by 36%. The top line also slumped 85.2% from the prior-year quarter’s number. The decline was primarily due to the coronavirus pandemic. In fact, Amusements and Other revenues, and Food and Beverage revenues fell considerably during the quarter owing to the pandemic.
While Food and Beverage revenues (33.4% of total revenues in the fiscal second quarter) plunged 87.7% year over year to $17 million, Amusement and Other revenues (66.6% of total revenues) fell 83.6% to $206.7 million.
Comps Details
Comparable store restaurant sales declined 87% in the fiscal second quarter. The downside can primarily be attributed to temporary store closures, consequently, leading to lower customer volumes.
Non-comparable store revenues in the reported quarter declined $10.4 million compared with $36.5 million in the year-ago quarter. The decrease was primarily owing to temporary store closures.
Operating Highlights
Operating loss in the fiscal second quarter totaled $81.1 million against an operating profit of $46.2 million in the prior-year quarter. Operating margin came in at (159.6%), versus 13.4% in the prior year quarter. Notably, a decline in traffic due to temporary store closures has negatively impacted the fiscal second-quarter operating results.
Adjusted EBITDA was ($34.5 million) against $86 million in the prior-year quarter.
Balance Sheet
As of Aug 2, cash and cash equivalents totaled $224 million compared with $24.7 million as of Feb 2, 2020.
Long-term debt came in at $731.6 million at the end of the reported quarter, up from $632.7 million at the end of Feb 2, 2020.
Stores Update
Although Dave & Buster’s was operating only through delivery and takeaway services from late March through late April, it started to initiate dine-in openings thereafter. As of Sep 9, 2020, the company has reopened 89 stores.
Fiscal 2020 Guidance
Owing to the unprecedented and uncertain nature of the coronavirus pandemic, the company has refrained from provided fiscal 2020 financial guidance at this time.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -38.41% due to these changes.
VGM Scores
Currently, Dave & Buster's has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dave & Buster's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Dave & Buster's (PLAY) Down 10.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have lost about 10.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dave & Buster's due for a breakout? 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 catalysts.
Dave & Buster's Q2 Loss Narrower Than Expected
Dave & Buster's reported second-quarter fiscal 2020 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line lagged the same. However, both earnings and revenues declined sharply year over year.
The company posted adjusted loss $1.19 per share, which was narrower than the Zacks Consensus Estimate of loss of $1.44 by 17.4%. The company had reported earnings per share of 90 cents in the year-ago quarter.
Let’s delve into the quarterly numbers.
Detailed Revenue Discussion
Quarterly revenues of $50.8 million missed the consensus mark of $79 million by 36%. The top line also slumped 85.2% from the prior-year quarter’s number. The decline was primarily due to the coronavirus pandemic. In fact, Amusements and Other revenues, and Food and Beverage revenues fell considerably during the quarter owing to the pandemic.
While Food and Beverage revenues (33.4% of total revenues in the fiscal second quarter) plunged 87.7% year over year to $17 million, Amusement and Other revenues (66.6% of total revenues) fell 83.6% to $206.7 million.
Comps Details
Comparable store restaurant sales declined 87% in the fiscal second quarter. The downside can primarily be attributed to temporary store closures, consequently, leading to lower customer volumes.
Non-comparable store revenues in the reported quarter declined $10.4 million compared with $36.5 million in the year-ago quarter. The decrease was primarily owing to temporary store closures.
Operating Highlights
Operating loss in the fiscal second quarter totaled $81.1 million against an operating profit of $46.2 million in the prior-year quarter. Operating margin came in at (159.6%), versus 13.4% in the prior year quarter. Notably, a decline in traffic due to temporary store closures has negatively impacted the fiscal second-quarter operating results.
Adjusted EBITDA was ($34.5 million) against $86 million in the prior-year quarter.
Balance Sheet
As of Aug 2, cash and cash equivalents totaled $224 million compared with $24.7 million as of Feb 2, 2020.
Long-term debt came in at $731.6 million at the end of the reported quarter, up from $632.7 million at the end of Feb 2, 2020.
Stores Update
Although Dave & Buster’s was operating only through delivery and takeaway services from late March through late April, it started to initiate dine-in openings thereafter. As of Sep 9, 2020, the company has reopened 89 stores.
Fiscal 2020 Guidance
Owing to the unprecedented and uncertain nature of the coronavirus pandemic, the company has refrained from provided fiscal 2020 financial guidance at this time.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -38.41% due to these changes.
VGM Scores
Currently, Dave & Buster's has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dave & Buster's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.