Dave & Buster’s Entertainment, Inc. (NASDAQ: PLAY)

Shares of the family entertainment and dining company Dave & Buster’s, sold off  hard in the after-hours session after they reported their earnings on Tuesday September 5th 2017.

Even though revenues increased 14.9%, comparable store sales increased 1.1%, net income increased and they reported that they repurchased approximately one million shares during the quarter -shares sold off hard and closed down 6.26% or -$3.64 closing at $54.50. Shares had traded up $0.30 and closed at $58.14 in the regular trading session.

Net income came in at $30.4 million dollars vs 21.5 million a year ago.  earnings per share came in at $0.71, versus $0.50 in the previous year.

PLAY Charts

 

The above price chart shows the last 8 months of daily price action. it is easy to see from the chart that major support has been broken and now the stock will have to test lows not seen since the end of 2016.

The above price chart shows the intraday action on Tuesday on the left and the after-hours session on the right. The time frame indicated on the chart is the 5-minute price candle bars, and it is easy to see that in the first five minutes after the news was announced the shares took the biggest hit lower.

Company Comments On Earnings And On Harvey

Brian Jenkins, Chief Financial Officer had this to say

“Q2 represented another quarter of strong performance as revenue and EBITDA increased 14.9% and 11.5% respectively. In addition, excluding a litigation settlement, we grew EBITDA by nearly 16% and EBITDA margins by 20 basis points. Our recent debt refinancing improved our capital structure and financial flexibility, enabling us to invest in new store growth and return value to shareholders for years to come,

Brian Jenkins,, the Chief Executive Officer added,

“Our thoughts and prayers go out to everyone affected by hurricane Harvey, including many Dave & Buster’s employees who have been significantly impacted. We are working to help get them back on their feet as soon as possible. Our three stores in Houston reopened Friday after remaining closed for several days. In terms of the quarter, Dave & Buster’s disciplined real estate strategy and differentiated product offering continue to pay off. We delivered another successful quarter of revenue growth driven by double-digit unit expansion and positive comparable store sales, a testament to the underlying strength of the brand. Our non-comp store base is performing well and we are very pleased with our recent store openings. Meanwhile, our comparable store sales growth has now exceeded the competitive casual dining benchmark for 21 consecutive quarters.Through today, we have opened eight stores and have an additional nine stores under construction. We now expect to open fourteen new stores this year, representing 15% unit growth, an increase over our previous guidance of twelve new stores. We remain committed to driving 10% or more unit growth over the long-term and continue to foresee a 200+ store opportunity in the United States and Canada alone”.

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