Dave & Buster's (PLAY) Q3 Earnings & Revenues Beat Estimates

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) reported better-than-expected earnings and revenues for the third quarter of fiscal 2018. Adjusted earnings of 30 cents surpassed the Zacks Consensus Estimate of 21 cents by 42.9%. The bottom line also grew 3.4% year over year. Results were aided by solid segmental revenues and consistent unit growth.

Despite earnings beat, some moderate changes in fiscal 2018 guidance may have led Dave & Buster’s shares to dip 2.8% on Dec 11. The company’s shares have also declined 5.6% over the past year against the industry’s rally of 6.9%.

Let us delve deeper into numbers.

Detailed Revenue Discussion

Quarterly revenues of $282.1 million outpaced the consensus mark by 2.9%. The top-line figure increased 12.9% from the prior-year quarter. The top line was primarily favored by consistent unit growth.

Overall comps declined 1.3% in the fiscal third quarter, same as what was recorded in the year-ago quarter. The decline in comps can be attributed to a 0.7% dip in walk-in sales and a decline of 6.9% in special events sales. Comps at Amusements & Other increased 1.5% but decreased 5% in Food & Beverage.

Non-comparable store revenues in the reported quarter increased 135.5% from the year-ago quarter to $75 million.

Food and Beverage revenues (42.1% of total revenues in the fiscal third quarter) increased 10.3% year over year to $118.8 million while Amusement and Other revenues (57.9%) rose 14.8% to $163.3 million.

Dave & Buster's Entertainment, Inc. Price, Consensus and EPS Surprise

 | Operating Highlights

In the reported quarter, operating margin declined roughly 250 basis points (bps) year over year to 5.5%.

Net income in the fiscal third quarter totaled $11.9 million, down from $12.2 million in the prior-year quarter. Adjusted EBITDA decreased 2.7% to $52.7 million compared with $54.1 million in the same period last year. However, EBITDA margin decreased 300 bps year over year.

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