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Dave & Buster's to Report Q3 Earnings: What's in the Cards?

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Dave & Buster’s Entertainment, Inc. (PLAY - Free Report) is scheduled to report third-quarter fiscal 2024 results on Dec. 10, 2024, after market close. In the last reported quarter, the company posted an earnings surprise of 28.7%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

PLAY’s Q3 Expectations

The Zacks Consensus Estimate for the fiscal third-quarter bottom line is pegged at a loss of 42 cents per share. In the prior-year quarter, the company reported earnings per share (EPS) of 1 cent.

For revenues, the consensus mark is pegged at $459.9 million. The metric suggests a decline of 1.5% from the year-ago quarter’s figure.

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

Factors to Note Ahead of PLAY’s Q3 Release

Dave & Buster's fiscal third-quarter operations are likely to have navigated through volatility arising from calendar shifts, leading to fluctuations in guest visits and overall sales patterns. This and the challenging consumer environment are likely to have affected same-store sales performance in the fiscal third quarter. Our model predicts fiscal third quarter comps to fall 5% year over year.

Although the company has improved its pricing strategies and food and beverage offerings, ongoing pricing testing and focus on premium drinks might push away cost-conscious customers. In a period of tight discretionary spending, raising prices on games and food could hurt guest traffic in the fiscal third quarter. Our model predicts fiscal first-quarter F&B revenues to fall 1.8% year over year to $161.9 million.

Increased operating expenses are likely to have impacted the company’s bottom line in the to-be-reported quarter. Our model predicts total operating expenses will rise 2.2% year over year to $458.3 million in the fiscal third quarter.

Local store activations and value-driven promotions tied to the fall football season are expected to have aided top-line trends. This and a focus on disciplined new store growth strategy, remodeled locations and a positive reception of the new menu items are likely to have aided the company’s performance in the fiscal third quarter.

What Our Model Says About PLAY Stock

Our proven model does not conclusively predict an earnings beat for Dave & Buster's this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.

PLAY’s Earnings ESP: Dave & Buster’s has an Earnings ESP of -12.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks to Consider

Here are some stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.

Yum China Holdings, Inc. (YUMC - Free Report) currently has an Earnings ESP of +2.40% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

YUMC’s earnings for the to-be-reported quarter are expected to increase 24%. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 32.5%.

CAVA Group, Inc. (CAVA - Free Report) has an Earnings ESP of +11.36% and a Zacks Rank of 2 at present.

CAVA’s earnings for the to-be-reported quarter are expected to increase 200%. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 91.8%.

Chipotle Mexican Grill, Inc. (CMG - Free Report) has an Earnings ESP of +3.19% and currently carries a Zacks Rank of 3.

CMG’s earnings for the to-be-reported quarter are expected to increase 14.3%. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 9.8%.

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