Dave & Buster’s Entertainment (NASDAQ:PLAY)
Dave & Buster’s reported their first quarter earnings after the market closed on June 6, 2017. The company reported that they had set a record for their first-quarter net income ever. That figure came in at $43 million dollars.
Total revenues increased 16% going up to $300 million dollars, this compares to $262 million a year ago. The company also repurchased over a 500,000 shares, spending $31 million dollars to do so in the first quarter. Comp store sales increased 2.2%.
Shares have been a in a beautiful uptrend all year. The 52-week range is a low of $37.60 to a high set today of$70.42. However after the earnings were announced, shares sold off slightly closing at $68.12 down -2.81% in the aftermarket session.
Shares had been up on the day 2.95% closing at $70.17. The reason for the slight sell-off seems to be attributed to a new consensus for their full year outlook which may come in just slight of what analysts expect.
Company Comments
CEO Steve King had this to say :
“We have grown Dave & Buster’s footprint by more than 14% over the last twelve months. This unit expansion combined with a 2.2% increase in comparable store sales drove 16% revenue growth during our first quarter this year. Our non-comp store base is performing well and we are very pleased with our 2017 store openings. Additionally, I’m proud our comparable store sales growth has now exceeded the competitive casual dining benchmark for 20 consecutive quarters”.
“Through today, we have opened seven stores and have an additional five stores under construction. We now expect to open twelve new stores this year, representing 13% unit growth, at the top end of our previous guidance of eleven to twelve new stores. We remain committed to driving 10% or more unit growth over the long-term and continue to foresee a 200+ store opportunity in the United States and Canada alone”.
CFO Brian Jenkins added:
“For the quarter, we drove EBITDA growth of 22.5% and expanded EBITDA margins by 150 basis points, and excluding the use tax settlement, a still robust 19.0% EBITDA growth and 70 basis points improvement in EBITDA margin. This impressive performance combined with strong operating cash flows and a healthy balance sheet provides us significant flexibility. We remain focused on returning value to shareholders as well as optimizing our capital structure and are pleased our board has authorized an additional $100 million in share repurchases”.
Some Interesting Facts About Dave And Busters
1)There REALLY is a Dave and a Buster
Not all brand namesakes are rooted in reality—we’re looking at you, Betty Crocker—but Dave & Buster’s did actually start out with two guys named Dave and Buster. In 1977, Dave Corriveau opened an entertainment complex, Slick Willy’s World of Entertainment, in Little Rock, Arkansas. Not long after, former T.G.I. Fridays employee James “Buster” Corley opened his restaurant, Buster’s, a few doors down. Both Dave and Buster noticed customers floating in and out of both establishments, giving them the idea to combine their resources and put their offerings under one roof. Dave & Buster’s was born. (Dave’s name came first because he won a coin toss.)
2)THEY HAD VERY EXPENSIVE POOL TABLES
Supervising two of the first Dave & Buster’s locations in Dallas, Corley and Corriveau wanted to make sure customers felt like they were in a higher-end gaming establishment. In addition to blackjack tables, the two ordered $15,000 pool tables that were handmade from mahogany and rosewood.
3) EACH RESTAURANT HAS OVER $1 MILLION IN GAMES
You’re probably not going to find any dusty Pac-Man cabinets here. Owing to their reputation for offering electronic diversions, a typical Dave & Buster’s will have over $1 million worth of arcade and interactive games on hand.
Dave & Buster’s Chart
The above price chart shows the daily price action from the beginning of 2017. The reader can see that the price respected an upper level and a lower level shown by a green and red trend line. Even with the aftermarket sell off shares look like they will still be opening within that price channel. Traders will watch this lower trend line carefully to see if it gets penetrated for lower prices.
Company 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 29, 2017, it owned and operated 92 stores located in 33 states and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.