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Dave & Buster's (PLAY) Up 33% in Six Months: More Room to Run?
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Dave & Buster's Entertainment, Inc. (PLAY - Free Report) is likely to benefit from sales-boosting Initiatives. Also, expansion efforts and digital initiatives bode well.
The company reported impressive first-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased by 32.37% and 7.41%, respectively, on a year-over-year basis. The upside was primarily backed by robust main event stores sales.
Shares of PLAY have increased 33.7% in the past six months period compared with the Zacks Retail – Restaurants industry’s rise of 7.5%. Earnings estimates for 2024 have increased 8.4% in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.
Image Source: Zacks Investment Research
Growth Catalysts
Dave & Buster's continues to perform well on the back of the unique customizable experience that it offers across platforms. Apart from great food and beverages, the company’s entertainment business has been driving growth. PLAY’s first-quarter fiscal 2023 entertainment revenues amounted to $393.1 million, contributing 65.8% to total revenues and increasing 31.4% year over year. The upside was primarily driven by a reduction in discounting and a shift toward higher denomination Power Cards.
During the fiscal first quarter, total revenues increased 32.4% to $597.3 million compared with $451.1 million reported in the year-ago quarter. The upside can be attributed to $138.3 million in revenues from Main Event stores and $25.8 million in revenues from new, noncomparable, Dave & Buster's stores.
Dave & Buster's continues to pursue a disciplined new store growth strategy in new and existing markets, given the broad appeal of its brand. To ensure a successful global expansion, the company signed two international franchise agreements for opening new stores in India and Australia. During first-quarter fiscal 2023, the company invested $50.8 million in capital additions, opening a new Dave and Buster's store in Puerto Rico and three new Main Event stores in Little Rock, AR, Tucson, AZ, and Lexington, KY. Two more stores were launched in Lubbock, TX, and Queen Creek, Arizona, during second-quarter fiscal 2023.
The company's digital initiatives are likely to drive growth. PLAY believes that it can drive traffic by enhancing in-store and out-of-store customer experience via digital and mobile strategic initiatives and deployment of better technology. During first-quarter fiscal 2023, the company initiated several digital promotions targeting families and social audiences to maintain brand awareness and attract customers seeking out-of-home entertainment during spring break. The emphasis on D&B loyalty program bodes well. The company anticipates the program to add relevance to its mobile app and drive higher engagement, as it enables guests to complete challenges and earn rewards.
Zacks Rank & Other Key Picks
Dave & Buster's currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for MELI’s 2023 sales and EPS indicates a rise of 27.6% and 75%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased 77% in the past year.
The Zacks Consensus Estimate for ANF’s 2023 sales and EPS indicates a rise of 3.4% and 732%, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 4.7%, on average. Shares of CMG have increased 63.1% in the past year.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS indicates a rise of 14% and 34%, respectively, from the year-ago period’s levels.
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Dave & Buster's (PLAY) Up 33% in Six Months: More Room to Run?
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) is likely to benefit from sales-boosting Initiatives. Also, expansion efforts and digital initiatives bode well.
The company reported impressive first-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased by 32.37% and 7.41%, respectively, on a year-over-year basis. The upside was primarily backed by robust main event stores sales.
Shares of PLAY have increased 33.7% in the past six months period compared with the Zacks Retail – Restaurants industry’s rise of 7.5%. Earnings estimates for 2024 have increased 8.4% in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.
Image Source: Zacks Investment Research
Growth Catalysts
Dave & Buster's continues to perform well on the back of the unique customizable experience that it offers across platforms. Apart from great food and beverages, the company’s entertainment business has been driving growth. PLAY’s first-quarter fiscal 2023 entertainment revenues amounted to $393.1 million, contributing 65.8% to total revenues and increasing 31.4% year over year. The upside was primarily driven by a reduction in discounting and a shift toward higher denomination Power Cards.
During the fiscal first quarter, total revenues increased 32.4% to $597.3 million compared with $451.1 million reported in the year-ago quarter. The upside can be attributed to $138.3 million in revenues from Main Event stores and $25.8 million in revenues from new, noncomparable, Dave & Buster's stores.
Dave & Buster's continues to pursue a disciplined new store growth strategy in new and existing markets, given the broad appeal of its brand. To ensure a successful global expansion, the company signed two international franchise agreements for opening new stores in India and Australia. During first-quarter fiscal 2023, the company invested $50.8 million in capital additions, opening a new Dave and Buster's store in Puerto Rico and three new Main Event stores in Little Rock, AR, Tucson, AZ, and Lexington, KY. Two more stores were launched in Lubbock, TX, and Queen Creek, Arizona, during second-quarter fiscal 2023.
The company's digital initiatives are likely to drive growth. PLAY believes that it can drive traffic by enhancing in-store and out-of-store customer experience via digital and mobile strategic initiatives and deployment of better technology. During first-quarter fiscal 2023, the company initiated several digital promotions targeting families and social audiences to maintain brand awareness and attract customers seeking out-of-home entertainment during spring break. The emphasis on D&B loyalty program bodes well. The company anticipates the program to add relevance to its mobile app and drive higher engagement, as it enables guests to complete challenges and earn rewards.
Zacks Rank & Other Key Picks
Dave & Buster's currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks from the Zacks Retail and Wholesale sector are:
MercadoLibre, Inc. (MELI - Free Report) carries a Zacks Rank #1. MELI has a trailing four-quarter earnings surprise of 35%, on average. Shares of MELI have gained 79.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MELI’s 2023 sales and EPS indicates a rise of 27.6% and 75%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 480.6%, on average. Shares of ANF have increased 77% in the past year.
The Zacks Consensus Estimate for ANF’s 2023 sales and EPS indicates a rise of 3.4% and 732%, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 4.7%, on average. Shares of CMG have increased 63.1% in the past year.
The Zacks Consensus Estimate for CMG’s 2023 sales and EPS indicates a rise of 14% and 34%, respectively, from the year-ago period’s levels.