Dave & Buster's Entertainment (PLAY) stock is down more than 10% Thursday after the entertainment and dining chain's fiscal first-quarter results fell short of analysts' expectations.
In the 13 weeks ended May 5, Dave & Buster's revenue decreased 1.5% year-over-year to $588.1 million, driven by a 5.6% decline in same-store sales. The company also said its earnings per share (EPS) were down 26.3% from the year-ago period to $1.12.
"We continue to make material progress advancing our key organic growth initiatives," Dave & Buster's CEO Chris Morris said in a statement. "We have seen meaningful success growing our loyalty database through our new marketing engine, highlighting our enhanced food and beverage offering through compelling promotions, refining our games pricing strategy, driving incremental special events and clear outperformance in our remodel initiative which we expect will lead to substantial improvement in revenue and profitability over the medium term."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The top- and bottom-line results came up short of analysts' expectations. According to MarketWatch, Wall Street was anticipating revenue of $616 million and earnings of $1.73 per share. Analysts' were also expecting a smaller same-store sales decrease of 3.8%.
Is Dave & Buster's stock a buy, sell or hold?
Even though PLAY is down nearly 17% for the year to date, analysts remain bullish. According to S&P Global Market Intelligence, the average analyst target price for the consumer staples stock is $65.71, representing implied upside of more than 48% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm William Blair is one of those with an upbeat outlook on PLAY stock, maintaining its Outperform rating (equivalent to Buy) even after the weak quarter.
"While the pace of remodels creates some near-term difficulty in modeling, we are encouraged by the recent improvement in comparable trends in May and so far in June and remain optimistic on management's initiatives to unlock significant EBITDA [earnings before interest, taxes, depreciation and amortization] in coming years,” said William Blair analyst Sharon Zackfia in a note.
Related Content
-
Verizon’s Free iPhone Deal: What to Know Before You Switch or UpgradeVerizon is offering a free smartphone — including the latest iPhones — with any myPlan, plus a three-year price lock. But is it really the best deal for you?
-
Married? Five Ways to Ensure Your Estate Plans Work in TandemGetting on the same page now means fewer potential problems when it counts.
-
Before You Invest Like a Politician, Consider This DilemmaAs apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
Early-Stage Startup Deals: How Do Convertible Notes Work?Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
