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Dave & Buster's (PLAY) Up 6.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Dave & Buster's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Dave & Buster's Q3 Earnings Beat Estimates
Dave & Buster's reported mixed third-quarter fiscal 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The bottom line beat the consensus mark for the sixth straight quarter, while the top line lagged the same after beating in the preceding three quarters. However, both the metrics improved year over year.
Going forward, the company expects the momentum to continue on the back of its strategic initiatives that include new menu, optimized marketing and technology investments.
Earnings & Revenues in Detail
During the fiscal third quarter, the company reported adjusted earnings per share of 21 cents, which outpaced the Zacks Consensus Estimate of 12 cents. In the year-ago quarter, it had reported an adjusted loss per share of $1.01.
Quarterly revenues of $318 million lagged the consensus mark of $320 million. In the prior-year quarter, the company reported revenues of $109.1 million. Revenues increased 6.2% compared with third-quarter fiscal 2019. As a result, Amusements and Other as well as Food and Beverage revenues rose significantly.
Food and Beverage revenues (33.9% of total revenues in the fiscal third quarter) soared 181% year over year to $107.7 million. Amusement and Other revenues (66.1%) surged a whopping 197.3% year over year to $210.2 million.
Comps Details
During the fiscal third quarter, comparable store sales increased 1.1% (excluding seven stores located in markets that had vaccine mandates during the quarter) compared with the 2019 level. Including all stores, comparable store sales dipped 0.4% compared with the 2019 level. Meanwhile, non-comparable store revenues in the reported quarter were $55.4 million, up from $20.1 million in the year-ago quarter.
Operating Highlights
During the fiscal third quarter, operating income amounted to $24.5 million against an operating loss of $56 million in the prior-year quarter. Operating margin was 7.7% against (51.4%) reported in the prior-year quarter. During the quarter, adjusted EBITDA was $68.2 million, up 47.4% year over year.
Balance Sheet
As of Oct 31, 2021, cash and cash equivalents totaled $27 million compared with $11.9 million as of Jan 31, 2021.
At the end of the fiscal third quarter, net long-term debt totaled $484.7 million compared with $596.4 million at the end of Jan 31, 2021.
Fiscal Q4 Business Update & Outlook
During the first five weeks of fourth-quarter fiscal 2021, the company reported witnessed sustained recovery in business with comps increasing 3.5% from the 2019 level. Walk-in comparable store sales rose 14%, while Special Event comparable store sales slumped 59% for the five-week period compared with 2019. The company stated that fourth-quarter revenues will be negatively impacted by the weak Special Events business relative to 2019 and from a calendar shift in its major holiday periods.
The company expects third-quarter comparable store sales to be marginally positive compared with fourth-quarter 2019. It anticipates fiscal fourth-quarter EBITDA margin to increase by 200 basis points compared with fourth-quarter 2019.
For fiscal 2021, the company anticipates capital additions (net of tenant allowances) of $100 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Dave & Buster's has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Dave & Buster's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Dave & Buster's (PLAY) Up 6.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Dave & Buster's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Dave & Buster's Q3 Earnings Beat Estimates
Dave & Buster's reported mixed third-quarter fiscal 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The bottom line beat the consensus mark for the sixth straight quarter, while the top line lagged the same after beating in the preceding three quarters. However, both the metrics improved year over year.
Going forward, the company expects the momentum to continue on the back of its strategic initiatives that include new menu, optimized marketing and technology investments.
Earnings & Revenues in Detail
During the fiscal third quarter, the company reported adjusted earnings per share of 21 cents, which outpaced the Zacks Consensus Estimate of 12 cents. In the year-ago quarter, it had reported an adjusted loss per share of $1.01.
Quarterly revenues of $318 million lagged the consensus mark of $320 million. In the prior-year quarter, the company reported revenues of $109.1 million. Revenues increased 6.2% compared with third-quarter fiscal 2019. As a result, Amusements and Other as well as Food and Beverage revenues rose significantly.
Food and Beverage revenues (33.9% of total revenues in the fiscal third quarter) soared 181% year over year to $107.7 million. Amusement and Other revenues (66.1%) surged a whopping 197.3% year over year to $210.2 million.
Comps Details
During the fiscal third quarter, comparable store sales increased 1.1% (excluding seven stores located in markets that had vaccine mandates during the quarter) compared with the 2019 level. Including all stores, comparable store sales dipped 0.4% compared with the 2019 level. Meanwhile, non-comparable store revenues in the reported quarter were $55.4 million, up from $20.1 million in the year-ago quarter.
Operating Highlights
During the fiscal third quarter, operating income amounted to $24.5 million against an operating loss of $56 million in the prior-year quarter. Operating margin was 7.7% against (51.4%) reported in the prior-year quarter. During the quarter, adjusted EBITDA was $68.2 million, up 47.4% year over year.
Balance Sheet
As of Oct 31, 2021, cash and cash equivalents totaled $27 million compared with $11.9 million as of Jan 31, 2021.
At the end of the fiscal third quarter, net long-term debt totaled $484.7 million compared with $596.4 million at the end of Jan 31, 2021.
Fiscal Q4 Business Update & Outlook
During the first five weeks of fourth-quarter fiscal 2021, the company reported witnessed sustained recovery in business with comps increasing 3.5% from the 2019 level. Walk-in comparable store sales rose 14%, while Special Event comparable store sales slumped 59% for the five-week period compared with 2019. The company stated that fourth-quarter revenues will be negatively impacted by the weak Special Events business relative to 2019 and from a calendar shift in its major holiday periods.
The company expects third-quarter comparable store sales to be marginally positive compared with fourth-quarter 2019. It anticipates fiscal fourth-quarter EBITDA margin to increase by 200 basis points compared with fourth-quarter 2019.
For fiscal 2021, the company anticipates capital additions (net of tenant allowances) of $100 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Dave & Buster's has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Dave & Buster's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.