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Dave & Buster's (PLAY) Q2 Loss Narrower Than Expected


Dave & Buster’s Entertainment, Inc. PLAY reported second-quarter fiscal 2020 results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line lagged the same. However, both earnings and revenues declined sharply year over year. Following the results, the company’s shares fell 2.3% yesterday.
The company posted adjusted loss $1.19 per share, which was narrower than the Zacks Consensus Estimate of loss of $1.44 by 17.4%. The company had reported earnings per share of 90 cents in the year-ago quarter.
Let’s delve into the quarterly numbers.
Dave Busters Entertainment, Inc. price-consensus-eps-surprise-chart | Dave Busters Entertainment, Inc. Quote
Quarterly revenues of $50.8 million missed the consensus mark of $79 million by 36%. The top line also slumped 85.2% from the prior-year quarter’s number. The decline was primarily due to the coronavirus pandemic. In fact, Amusements and Other revenues, and Food and Beverage revenues fell considerably during the quarter owing to the pandemic.
While Food and Beverage revenues (33.4% of total revenues in the fiscal second quarter) plunged 87.7% year over year to $17 million, Amusement and Other revenues (66.6% of total revenues) fell 83.6% to $206.7 million.
Comparable store restaurant sales declined 87% in the fiscal second quarter. The downside can primarily be attributed to temporary store closures, consequently, leading to lower customer volumes.
Non-comparable store revenues in the reported quarter declined $10.4 million compared with $36.5 million in the year-ago quarter. The decrease was primarily owing to temporary store closures.
Operating loss in the fiscal second quarter totaled $81.1 million against an operating profit of $46.2 million in the prior-year quarter. Operating margin came in at (159.6%), versus 13.4% in the prior year quarter. Notably, a decline in traffic due to temporary store closures has negatively impacted the fiscal second-quarter operating results.
Adjusted EBITDA was ($34.5 million) against $86 million in the prior-year quarter.
As of May 3, cash and cash equivalents totaled $224 million compared with $24.7 million as of Feb 2, 2020.
Long-term debt came in at $731.6 million at the end of the reported quarter, up from $632.7 million at the end of Feb 2, 2020.
Although Dave & Buster’s was operating only through delivery and takeaway services from late March through late April, it started to initiate dine-in openings thereafter. As of Sep 9, 2020, the company has reopened 89 stores.
Owing to the unprecedented and uncertain nature of the coronavirus pandemic, the company has refrained from provided fiscal 2020 financial guidance at this time.
Dave & Buster’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McDonald’s Corporation MCD reported mixed second-quarter 2020 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line beat the same. The company reported adjusted earnings of 66 cents per share, which missed the consensus mark of 76 cents. Moreover, the bottom line declined 68% year over year. However, the second-quarter revenues of $3,761.5 million beat the Zacks Consensus Estimate of $3,698 million.
Starbucks Corporation SBUX reported strong third-quarter fiscal 2020 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. In the quarter under review, the company reported adjusted loss per share of 46 cents per share, narrower than the Zacks Consensus Estimate of loss per share of 61 cents. In the prior-year quarter, the company had reported adjusted earnings per share of 78 cents. Total revenues were $4,222.1 million, which surpassed the Zacks Consensus Estimate of $4,111 million. However, the top line fell 38.1% from the year-ago quarter’s level.

YUM! Brands, Inc. YUM reported robust second-quarter 2020 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. The company’s adjusted earnings of 82 cents beat the Zacks Consensus Estimate of 52 cents. In the prior-year quarter, the company had reported adjusted earnings of 93 cents. YUM! Brands’ total revenues of $1,198 million declined 9% year over year but outpaced the consensus estimate of $1,168 million.
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