On Tuesday after the close, Dave & Buster’s Entertainment (NASDAQ:PLAY) announced first-quarter earnings that topped analyst expectations and sent shares soaring in the post market session. The company announced first quarter earnings of 72 cents per share on $262 million in revenues while analysts were looking for 59 cents per share on $251.4 million in revenues. PLAY also announced full year guidance for 2016 that came in above analyst estimates with EPS projected between $1.85 and $1.97 while analysts were looking for $1.80. Revenues are projected to come in between $983 and $995 million with average analyst estimates coming in at $982 million. Currently analysts have an average price target of $48.80.
Looking at the chart you will see that shares hit a post market high of $44.77 after closing the day at $41.86 equivalent to a 7% jump in price. If shares hold these prices we will be looking all time highs for PLAY, which means that resistance levels will be met at whole dollar amounts like $45 and $46 while support should be met at previous highs of $43.35 followed by $42. Shares are currently well above their 200-day moving average that is sitting at $38.36 and their 50-day moving average at $39.53. Look for shares to be more volatile than normal with increased range and volume as traders look to take advantage of this big move. Ideally we would like to see shares hold these all time highs but usually we’ll see a pullback as profit takers and short sellers step in to bring the prices down so keep an eye out for the key pivot levels mentioned above.
CEO Comments
We are off to a great start in fiscal 2016 with results that surpassed our expectations and are pleased to already be raising our annual outlook. Our unique entertainment, dining, and sports viewing venues are demonstrating their broad-based appeal despite challenges affecting many of our casual dining peers and we are committed to keeping our brand fresh through a continuous stream of ‘new news’ to further differentiate ourselves,” said Steve King, Chief Executive Officer.
During the first quarter, our 18 non-comparable stores contributed an incremental $31.1 million to our top-line, and together with a 3.6% increase in comparable store sales, resulted in an acceleration of total revenue growth by 17.7% to $262 million. This was the largest number of non-comparable stores for any first quarter in Dave & Buster’s history and reflects the growing impact of new store development on our overall financial performance. Our comparable store sales have now exceeded the competitive casual dining benchmark for 16 straight quarters and reached 13.5% on a two-year stacked basis. The continued shift in revenues to our higher-margin amusement category coupled with operating leverage enabled us to grow Adjusted EBITDA and Margins by 28.4% and 250 basis points, respectively. In doing so, we set new first quarter records for these metrics, King continued.
PLAY Profile
Dave & Buster'’s Entertainment, Inc. owns and operates entertainment and dining venues for adults and families in North America. Its venues offer a menu of ‘Fun American New Gourmet’ entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster’'s name. As of January 31, 2016, it owned and operated 81 stores in 30 states and Canada. Dave & Buster’s Entertainment, Inc. was founded in 1982 and is headquartered in Dallas, Texas.