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Dave & Buster's (PLAY) Down 15.4% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Dave & Buster's Entertainment, Inc. (PLAY - Free Report) . Shares have lost about 15.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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 Tops Q2 Earnings & Revenue Estimates
Dave & Buster's posted better-than-expected results in second-quarter fiscal 2017 wherein both the bottom and top line beat the Zacks Consensus Estimate.
However, a decelerating comps growth rate is a cause of concern.
Earnings & Revenues
Dave & Buster's earnings of 71 cents per share in the fiscal second quarter beat the Zacks Consensus Estimate of 55 cents by 29.1%. Also, the bottom line jumped 42% from the year-ago figure of 50 cents on higher revenues. Notably, results in the reported quarter included certain non-recurring items.
The company reported revenues of $280.8 million in the quarter, just above the Zacks Consensus Estimate of $280.5 million. Meanwhile, the top line improved 14.9% year over year primarily owing to consistent unit expansion.
Turning to category sales, Food and Beverage revenues rose 10.2% year over year to $118.7 million in the reported quarter. Also, Amusement and Other revenues increased 18.6% to $162.1 million.
Behind the Headline Numbers
Comps increased 1.1% year over year in the fiscal second quarter, driven by a 1.1% rise in walk-in sales and 1.6% improvement in special events sales. Though the figure was slightly better than 1% growth recorded in the prior-year quarter, it was below a 2.2% increase in the last quarter.
Moreover, comps came in below the company’s expectation, given the continued challenging environment for casual dining.
Earnings before interest, taxes, and amortization (EBITDA) rose 11.5% to $64 million. Meanwhile, EBITDA margins decreased 70 basis points to 22.8% from 23.5% in the year-ago quarter.
Fiscal 2017 Outlook
Dave & Buster's continues to expect fiscal 2017 revenues in the range of $1.160 billion to $1.170 billion.
The company now projects comps to increase in the band of 1% to 2% on a comparable 52-week basis compared with prior expectation of an increase in the range of 2% to 3%.
EBITDA is now anticipated to be between $270 million to $276 million, down from $276 million to $282 million, projected earlier.
In fiscal 2017, the company expects to open 14 new stores (earlier 12 openings were anticipated).
How Have Estimates Been Moving Since Then?
Following the release and in the last month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 14.9% due to these changes.
Dave & Buster's Entertainment, Inc. Price and Consensus
At this time, Dave & Buster's stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, 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.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Dave & Buster's (PLAY) Down 15.4% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Dave & Buster's Entertainment, Inc. (PLAY - Free Report) . Shares have lost about 15.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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 Tops Q2 Earnings & Revenue Estimates
Dave & Buster's posted better-than-expected results in second-quarter fiscal 2017 wherein both the bottom and top line beat the Zacks Consensus Estimate.
However, a decelerating comps growth rate is a cause of concern.
Earnings & Revenues
Dave & Buster's earnings of 71 cents per share in the fiscal second quarter beat the Zacks Consensus Estimate of 55 cents by 29.1%. Also, the bottom line jumped 42% from the year-ago figure of 50 cents on higher revenues. Notably, results in the reported quarter included certain non-recurring items.
The company reported revenues of $280.8 million in the quarter, just above the Zacks Consensus Estimate of $280.5 million. Meanwhile, the top line improved 14.9% year over year primarily owing to consistent unit expansion.
Turning to category sales, Food and Beverage revenues rose 10.2% year over year to $118.7 million in the reported quarter. Also, Amusement and Other revenues increased 18.6% to $162.1 million.
Behind the Headline Numbers
Comps increased 1.1% year over year in the fiscal second quarter, driven by a 1.1% rise in walk-in sales and 1.6% improvement in special events sales. Though the figure was slightly better than 1% growth recorded in the prior-year quarter, it was below a 2.2% increase in the last quarter.
Moreover, comps came in below the company’s expectation, given the continued challenging environment for casual dining.
Earnings before interest, taxes, and amortization (EBITDA) rose 11.5% to $64 million. Meanwhile, EBITDA margins decreased 70 basis points to 22.8% from 23.5% in the year-ago quarter.
Fiscal 2017 Outlook
Dave & Buster's continues to expect fiscal 2017 revenues in the range of $1.160 billion to $1.170 billion.
The company now projects comps to increase in the band of 1% to 2% on a comparable 52-week basis compared with prior expectation of an increase in the range of 2% to 3%.
EBITDA is now anticipated to be between $270 million to $276 million, down from $276 million to $282 million, projected earlier.
In fiscal 2017, the company expects to open 14 new stores (earlier 12 openings were anticipated).
How Have Estimates Been Moving Since Then?
Following the release and in the last month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 14.9% due to these changes.
Dave & Buster's Entertainment, Inc. Price and Consensus
Dave & Buster's Entertainment, Inc. Price and Consensus | Dave & Buster's Entertainment, Inc. Quote
VGM Scores
At this time, Dave & Buster's stock has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, 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.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.