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Factors Likely to Shape Dave & Buster's (PLAY) Q4 Earnings

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Dave & Buster’s Entertainment, Inc. (PLAY - Free Report) is scheduled to report fourth-quarter fiscal 2022 results on Mar 28, 2023, after market close. In the last reported quarter, the company delivered an earnings surprise of 33.3%.

Q4 Expectations

The Zacks Consensus Estimate for the fiscal fourth-quarter earnings per share (EPS) is pegged at 73 cents, indicating an improvement of 40.4% from 52 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $545.1 million. The metric suggests an increase of 58.9% from the year-ago quarter’s figure.


Let’s discuss the factors that are likely to get reflected in the quarter to be reported.

Factors at Play

Dave & Buster's fiscal fourth-quarter performance is likely to have benefited from focus on marketing strategy, entertainment innovation pipeline, food and beverage offerings and tech-enabled hospitality model. During the previous quarter, the company reported strong customer spending and visitation on the back of its marketing efforts. Also, it stated the benefits of the National winners watch football campaign. The company stated that its Special Event's business had nearly recovered to pre-COVID levels. Given the emphasis on international franchisee network and location-based entertainment offerings the momentum is likely to have continued in the to-be-reported quarter.

Solid performance of food and beverage and amusement and other is likely to get reflected in the company’s quarterly numbers. The Zacks Consensus Estimate for food and beverage revenues is likely to witness an improvement of 54.2% year over year to $185 million. Amusement and other revenues are likely to record a surge of 52.9% year over year to $341 million.

Implementation of the synergies (from the Main Event business acquisition), including the elimination of redundant facilities, functions and staffing are likely to have aided the company’s performance in the fiscal fourth quarter.

However, a challenging macro environment, including inflationary pressure on labor and commodities, is likely to have dented margin in the fiscal fourth quarter.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Dave & Buster’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Dave & Buster’s has an Earnings ESP of +4.59%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #4 (Sell).

Peer Releases

Papa John’s International, Inc. (PZZA - Free Report) reported fourth-quarter fiscal 2022 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and the bottom line declined on a year-over-year basis.

PZZA cited a challenging macroeconomic environment, including softening economic conditions (in the U.K.), food and wage inflation and high energy prices. The company anticipates international comp sales to remain under pressure throughout 2023.  You can see the complete list of today’s Zacks #1 Rank stocks here.

The Cheesecake Factory Incorporated (CAKE - Free Report) reported fourth-quarter fiscal 2022 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines rose year over year, courtesy of incremental pricing and cost-saving efforts despite continued inflation, volatility and a dynamic operating environment.

David Overton, chairman and CEO of Cheesecake Factory, stated, “During the quarter, we opened eight new restaurants and successfully implemented incremental pricing to support our stated objective of recovering our operating margins. We believe the strong consumer demand we experienced at our new restaurant openings and continued positive sales trends following our pricing actions demonstrate the strength and resilience of our concepts.”

YUM! Brands, Inc. (YUM - Free Report) reported solid fourth-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. In fourth-quarter 2022, the company's adjusted EPS came in at $1.31, surpassing the Zacks Consensus Estimate of $1.25. Quarterly revenues of $ 2,019 million beat the consensus mark of $1,927 million. Also, the top line increased 6.8% year over year. The upside can be attributed to an increase in franchise and property revenues.

YUM! Brands’ results in the quarter benefited from increased contributions from Taco Bell, robust digital initiatives through mobile and online platforms across all brand segments and same-store sales growth. The company has been benefiting from a recovery in emerging markets. Given the emphasis on consumer value proposition, expanded digital access and franchise partners, the company anticipates the momentum to continue in the upcoming periods.

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