Dave & Buster’s Entertainment (NASDAQ: $PLAY) released its second-quarter results on Tuesday after markets closed, revealing an earnings beat but missing sales estimates. Here is a breakdown of their performance during the quarter.
Dave & Buster’s Second Quarter Results
During the second quarter, Dave & Buster’s reported earnings of $1.12 per share, beating estimates of $0.87 per share, and above the $0.94 reported the previous year. Over the past four quarters, the company has beaten EPS estimates twice.
Dave & Buster’s reported sales of $557.1 million during the second quarter, a 2.8% year-over-year increase, but below estimates of $567.3 million. In the past four quarters, the company has missed revenue estimates 100% of the time.
Other Financial Highlights
During the second quarter, Dave & Buster’s adjusted EBITDA increased 8.1% year over year to $151.6 million, while adjusted net income increased 11.7% year over year to $45.7 million.
The company bought back shares worth $47.4 million in the second quarter, bringing the total shares bought this year to $60 million. It still has $140 million remaining under its current share buyback program.
Dave & Buster’s ended the quarter with $101.8 million in operating cash flow, $13.1 million in cash, and $381 million available under its current $500 million revolving credit facility.
The company did not issue guidance for the third quarter or full year. However, that might change in the next few days.
Earnings Call Highlights
CEO Chris Morris was upbeat about the upcoming quarters during the earnings call. He noted that they had opened 18 remodels in 2024 and were on pace to complete 29 remodels in the third quarter and 44 by the end of fiscal 2024.
The CEO also noted that they were expanding internationally, Morris stated, “We expect the first of these international sites to open before the end of the year.”
Dave & Buster’s (PLAY) Market Performance
PLAY stock has underperformed the market in 2024, falling 44.93% year to date. Over the past 12 months, it has lost 14.07% of its value. The stock is below its 50 and 200 DMAs of $34.54 and $48.60.
Following the second quarter’s earnings beat, the stock was up 13.66% a few minutes before the opening bell at $33.94 per share.
Analysts remain cautiously optimistic about the stock’s future, giving it a moderate buy rating. They forecast a wide range of price targets, with a high of $65 and a low of $35. Their average forecast of $56.50 is an 89.22% upside based on Tuesday’s closing price of $29.86.
Should You Buy Dave & Buster’s (PLAY) In 2024?
Wall Street analysts remain optimistic about the potential upside for PLAY stock. Despite falling over 44% in 2024, they forecast an upside of over 89%. Many of them will likely be revising their forecasts upward following the release of the Q2 results.
The company has a growth plan, and its second-quarter results highlight a company that is back in growth mode. Consequently, adding Dave & Buster’s stock to your portfolio could potentially pay off in the long term.
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