Dave & Buster's Ends Week Higher After Q1 Print: What You Need To Know
Dave & Buster's Entertainment Inc PLAY 13.47% was heavily affected by the coronavirus pandemic.
In its first-quarter report, the company said it was forced to close 137 stores. The closures heavily affected the business’s balance sheet. Revenue fell 56% year-over-year. With this massive drop in revenue, the company took major steps to gain more capital. The company reported a $1.37 loss per share, or $43.5 million, for the quarter.
Why It Matters:
With the loss in revenue and profit, Dave and Buster’s suspended its dividend. The company also boosted its liquidity by raising $75 million in an at-market-cost offering and drawing down from its credit line.
.Dave and Buster's ended the quarter with $157 million in cash and cash equivalents. To put this into perspective, in February, the company had $24.6 million in cash and equivalents.
What’s Next
In late April, the company began opening stores. In its first-quarter report, Dave and Buster's said that by the end of the week it plans to have 48 stores open in 15 states. The company said it will be improving cleaning and sanitation procedures and offer a new approach to its dining experience to resume operations and keep customers safe.
PLAY Price Action:
Dave and Buster's shares ended Friday's session higher by 13.47% at $16.60.
Photo courtesy of Dave and Buster's.
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I really believe the rally is only based on optimism. Once the second wave hits, and people realize how difficult it is to ensure that the arcade games are clean in-between use, Dave and Buster's stock will plummet.