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Why Is Dave & Buster's (PLAY) Down 23.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have lost about 23.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Dave & Buster's Q4 Earnings & Revenues Miss Estimates
Dave & Buster's reported fourth-quarter fiscal 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Earnings & Revenues in Detail
During the fiscal fourth quarter, the company reported adjusted earnings per share (EPS) of $1.03, missing the Zacks Consensus Estimate of $1.07. In the year-ago quarter, it reported an adjusted EPS of 85 cents.
Quarterly revenues of $599.1 million missed the consensus mark of $603 million. The top line rose 6.3% from $563.8 million reported in the prior-year quarter.
Food and Beverage revenues (36.8% of total revenues in the reported quarter) increased 8.2% year over year to $220.2 million. Entertainment revenues (63.2%) increased 5.2% year over year to $378.9 million.
Comps Details
During the quarter under discussion, pro-forma comparable store sales (including Main Event branded stores) declined 7% year over year but increased 8% from 2019 levels. The downside was caused by unusual and adverse weather conditions, resulting in multiple complete and partial store closures within the system.
Operating Highlights
During the quarter under discussion, operating income amounted to $89.6 million compared with $77.2 million reported in the prior-year quarter. The operating margin was 15% compared with 13.7% reported in the year-ago quarter. Our estimate for the metric was 14.3%.
Adjusted EBITDA came in at $151.8 million compared with $138.4 million reported in the year-earlier quarter. Our estimate for the metric was $143.1 million.
Balance Sheet
As of Feb 4, 2024, cash and cash equivalents were $37.3 million compared with $181.6 million as of Jan 29, 2023.
During fiscal 2023, the company repurchased nearly 8.5 million shares for an aggregate cost of $300 million. As of Feb 4, the company had $200 million available for the buyback program.
At the fiscal fourth-quarter end, net long-term debt totaled $1,284 million compared with $1,222.7 million at the end of fourth-quarter fiscal 2022.
Fiscal 2023 Highlights
Total revenues in the fiscal 2023 came in at $ 2.2 billion compared with $2 billion in fiscal 2022.
Operating income in the fiscal 2023 came in at $306.6 million compared with $262.5 million in fiscal 2022.
In the fiscal 2023, adjusted EPS came in at $3.56 compared with $3.23 reported in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Dave & Buster's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
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.
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Why Is Dave & Buster's (PLAY) Down 23.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Dave & Buster's (PLAY - Free Report) . Shares have lost about 23.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Dave & Buster's Q4 Earnings & Revenues Miss Estimates
Dave & Buster's reported fourth-quarter fiscal 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
Earnings & Revenues in Detail
During the fiscal fourth quarter, the company reported adjusted earnings per share (EPS) of $1.03, missing the Zacks Consensus Estimate of $1.07. In the year-ago quarter, it reported an adjusted EPS of 85 cents.
Quarterly revenues of $599.1 million missed the consensus mark of $603 million. The top line rose 6.3% from $563.8 million reported in the prior-year quarter.
Food and Beverage revenues (36.8% of total revenues in the reported quarter) increased 8.2% year over year to $220.2 million. Entertainment revenues (63.2%) increased 5.2% year over year to $378.9 million.
Comps Details
During the quarter under discussion, pro-forma comparable store sales (including Main Event branded stores) declined 7% year over year but increased 8% from 2019 levels. The downside was caused by unusual and adverse weather conditions, resulting in multiple complete and partial store closures within the system.
Operating Highlights
During the quarter under discussion, operating income amounted to $89.6 million compared with $77.2 million reported in the prior-year quarter. The operating margin was 15% compared with 13.7% reported in the year-ago quarter. Our estimate for the metric was 14.3%.
Adjusted EBITDA came in at $151.8 million compared with $138.4 million reported in the year-earlier quarter. Our estimate for the metric was $143.1 million.
Balance Sheet
As of Feb 4, 2024, cash and cash equivalents were $37.3 million compared with $181.6 million as of Jan 29, 2023.
During fiscal 2023, the company repurchased nearly 8.5 million shares for an aggregate cost of $300 million. As of Feb 4, the company had $200 million available for the buyback program.
At the fiscal fourth-quarter end, net long-term debt totaled $1,284 million compared with $1,222.7 million at the end of fourth-quarter fiscal 2022.
Fiscal 2023 Highlights
Total revenues in the fiscal 2023 came in at $ 2.2 billion compared with $2 billion in fiscal 2022.
Operating income in the fiscal 2023 came in at $306.6 million compared with $262.5 million in fiscal 2022.
In the fiscal 2023, adjusted EPS came in at $3.56 compared with $3.23 reported in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Dave & Buster's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
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.