Post Earnings Coverage as Dave & Buster Q3 Sales Topped Expectations with 19% Y-o-Y Growth

Upcoming AWS Coverage on Performance Food Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 13, 2016 / Active Wall St. announces its post-earnings coverage on Dave & Buster’s Entertainment, Inc. (NASDAQ: PLAY). The Company released its third quarter fiscal 2016 (Q3 FY16) earnings on December 06, 2016. The Dallas, Texas-based company reported a 19% y-o-y growth in its total revenues and 42% y-o-y growth in adjusted EBITDA. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Dave & Buster’s Entertainment’s competitors within the Restaurants space, Performance Food Group Co. (NYSE: PFGC), reported on November 08, 2016, its first-quarter fiscal 2017 business results. AWS will be initiating a research report on Performance Food Group in the coming days.

Today, AWS is promoting its earnings coverage on PLAY; touching on PFGC. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=PLAY

http://www.activewallst.com/registration-3/?symbol=PFGC

Earnings Reviewed

During Q3 FY16, Dave & Buster’s reported total revenues of $228.66 million which came in above the $192.75 million recorded in prior-year same period. Revenues also beat market expectations of $216.7 million. The company’s comparable store sales grew 5.9% y-o-y in Q3 FY16, versus 8.8% y-o-y growth in Q3 FY15. In the reported quarter, comparable store sales growth was primarily driven by a 5.7% rise in walk-in sales and a 7.6% increase in special events sales. Additionally, non-comparable store revenues surged $26.2 million, or 106% y-o-y, in Q3 FY16 to $50.9 million.

For the quarter ended October 30, 2016, the restaurateur reported net income of $10.76 million, or $0.25 per diluted share, compared to net income of $4.55million, or $0.11 per diluted share, in the year ago same period. Net income readings also beat market estimates of $0.13 per diluted share.The company’s Q3 FY16 net income growth was driven by growth in adjusted EBITDA and improvement in adjusted EBITDA margin.

In Q2 FY16, Dave & Buster’s inaugurated two stores, one at Summerlin, Las Vegas, and another at Fresno, California. The company has already inaugurated three more stores and has plans to open one more store in the current quarter.

Operating Metrics

The company’s operating income rose to $18.67 million, or 8.2% of total revenues, in Q3 FY16 from $9.46 million, or 4.9% of total revenues, in Q3 FY15. During the quarter, store-level EBITDA increased 34% to $59.60 million, or 26.1% of total revenues, from $44.53 million, or 23.1% of total revenues, in the prior year’s comparable quarter. Adjusted EBITDA surged 42% to $48.85 million, or 21.4% of total revenue, in Q3 FY16 from $34.50 million, or 17.9% of total revenues, in Q3 FY15. Furthermore, the company has delivered 25 consecutive quarters of adjusted EBITDA growth on a trailing twelve months basis.

Segment-wise

Dave & Buster’s Food and Beverage segment contributed $101.34million, or 44.3% to the company’s total revenue in Q3 FY16. The segment revenues had improved 13% y-o-y from $89.83 million, or 46.6% of total revenues, during Q3 FY15.

The company generated $127.32million, or 55.7% of its total revenue, from Amusement and other segment in Q3 FY16. During the reported period, total revenue grew 24% from $102.93 million, or 53.4% of total revenues.

Balance Sheet Numbers

As on October 30, 2016, the company had cash and cash equivalents amounting to $14.72 million compared to $25.50 million recorded as on January 31, 2016. The company reported net long-term debt of $270.45 million as on October 30, 2016, compared to $329.92 million as on January 31, 2016. Furthermore, outstanding debt on credit facility stood at $278.6 million as on October 30, 2016, with leverage of 1.1 times.

Earnings Outlook

Dave & Buster’s management raised its total revenue guidance for fiscal 2016 and expects it be in the range of $998 million to $1.00 billion compared to previously provided guidance range of $983 million to $995 million. The company also upgraded its FY16 comparable sales growth, which is likely to be in the range of 3.1% to 3.6% versus previous comparable sales growth guidance range of 2.25% to 3.25%.

Net income outlook for FY16 is raised to be in the range of $86.5 million to $88.5 million from previous guidance range of $80 million to $85 million. Furthermore, the company expects adjusted EBITDA in the range for $265 million to $268 million for fiscal year ending on January 29, 2017.

For FY17, the company expects low double-digit growth in total revenue, net income, and adjusted EBITDA. It also intends to open a total of eleven to twelve new stores in FY17.

Stock Performance

On Monday, the stock closed the trading session at $55.64, slipping 2.69% from its previous closing price of $57.18. A total volume of 856.74 thousand shares have exchanged hands. Dave & Buster’s Entertainment’s stock price rallied 22.07% in the last month, 37.28% in the past three months, and 14.82% in the previous six months. Shares of the company have a PE ratio of 27.78 and have market capitalization of $2.34 billion.

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