Back to top

Image: Bigstock

Dave & Buster's (PLAY) Raises Q1 Revenue Guidance, Stock Up

Read MoreHide Full Article

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) recently issued a business update for the first 11 weeks of first-quarter fiscal 2021. Following the business update, the company’s shares rallied 1.9% on Apr 20. The company is riding on speedy recovery of store sales across the nation, attributable to its store re-opening initiatives.

The company started the first quarter with 76% of its store base -- 107 operational stores. Furthermore, as of Apr 18, the company has reopened 98% of its stores, which is equivalent to 138 stores. The company is focusing on reopening stores across the country. However, most of the stores are operating under reduced working hours and limited capacity.

Preliminary revenues for the first 11 weeks of first-quarter fiscal 2021 were around $228 million. However, as of Apr 18, comparable store sales for the first 11 weeks of the first quarter were down 38% in comparison to 2019. Sales generated at fully-operational comparable stores reached 81% of the 2019 level. The company is comparing 2021 results with 2019 as it provides a clear picture due to coronavirus-related disruption in 2020.

In this regard, CEO Brian Jenkins said “We have been very pleased with our recently reopened stores in New York and California, which have produced some of our strongest early sales recoveries to date.”

The company anticipates first-quarter revenues in the range of $252 million to $257 million versus the previous estimates of $210 million to $220 million. The company is likely to report first-quarter results in early June 2021.

Price Performance

Dave & Buster's is benefiting from its unique business model, various sales-boosting initiatives along with the continual expansion plans. Focus on promotional activities is likely to aid sales as well. Also, the company believes that it can drive traffic by enhancing in-store and out-of-store customer experience via digital and mobile strategic initiatives as well as deployment of better technology.

Coming to share performance, Dave & Buster's has surged 113.3% in the past six months compared with the Zacks Retail – Restaurants industry’s 15.5% rally. Also, in the past 30 days, the Zacks Consensus Estimate for its fiscal 2022 loss has narrowed from $1.42 to 65 cents per share. The upward revision in earnings estimates for fiscal 2022 reflects analysts’ optimism in the company’s growth potential.

Zacks Rank & Key Picks

Dave & Buster’s currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Darden Restaurants, Inc. (DRI - Free Report) , Yum! Brands, Inc. (YUM - Free Report) and Chuy's Holdings, Inc. (CHUY - Free Report) . Darden sports a Zacks Rank #1 (Strong Buy), while Yum! Brands and Chuy's Holdings carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Darden’s fiscal 2021 earnings are expected to rise 26.5%.

Yum! Brands and Chuy's Holdings’ 2021 earnings are expected to rise 8.3% and 34.5%, respectively.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>