Post-earnings stock watch: Dave & Buster’s Entertainment, Inc. (PLAY)

Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) reported earnings for the three months ended April 2016 on June 07, 2016. The company earned $0.72 per share on revenue of $261.99M. Analysts had been modeling earning per share of $0.59 with $251.42M in revenue.

Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) announced financial results for its first quarter 2016, which ended on May 1, 2016.  The Company also raised its financial outlook for fiscal 2016 and announced that its Board of Directors has authorized a $100 million share repurchase program.

Key highlights from the first quarter 2016 compared to the first quarter 2015 include:

  • Total revenues increased 17.7% to $262.0 million from $222.7 million.
  • Comparable store sales increased 3.6% compared to a 9.9% increase.
  • Opened three stores compared to two stores.
  • Net income increased 59.5% to $31.2 million, or $0.72 per diluted share, compared to net income of $19.5 million, or $0.46 per diluted share.
  • Adjusted EBITDA*, a non-GAAP measure, increased 28.4% to $79.5 million from $61.9 million.  As a percentage of total revenues, Adjusted EBITDA increased approximately 250 basis points to 30.3%.

Review of First Quarter 2016 Operating Results

Total revenues increased 17.7% to $262.0 million in the first quarter 2016 from $222.7 million in the first quarter 2015.  Food and Beverage revenues increased 13.1% to $117.1 million and Amusement and Other revenues increased 21.6% to $144.9 million.  Food and Beverage represented 44.7% of total revenues while Amusements and Other represented 55.3% of total revenues in the first quarter 2016.  In last year’s first quarter, Food and Beverage represented 46.5% of total revenues while Amusements and Other represented 53.5% of total revenues.

Comparable store sales increased 3.6% in the first quarter 2016 compared to a 9.9% increase in the same period last year.  Our comparable store sales growth was driven by a 4.0% increase in walk-in sales partially offset by a 0.7% decrease in special events sales.  Non-comparable store revenues increased by $31.1 million or 181.6% in the first quarter 2016 to $48.2 million.

Operating income increased to $51.2 million in the first quarter 2016 from $35.7 million in last year’s first quarter.  As a percentage of total revenues, operating income increased approximately 340 basis points to 19.5%.

Net income increased to $31.2 million, or $0.72 per diluted share (43.1 million diluted share base), in the first quarter 2016 compared to net income of $19.5 million, or $0.46 per diluted share (42.4 million diluted share base), in the same period last year.

Store EBITDA* increased 25.7% to $87.9 million in the first quarter 2016 from $69.9 million in last year’s first quarter.  As a percentage of total revenues, Store EBITDA increased approximately 220 basis points to 33.6%.

Adjusted EBITDA* increased 28.4% to $79.5 million in the first quarter 2016 from $61.9 million in the same period last year.  As a percentage of total revenues, Adjusted EBITDA increased approximately 250 basis points to 30.3%.

Dave & Buster’s Entertainment, Inc. earnings per share showed an increasing trend of 577.5% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 228%.Analysts project EPS growth over the next 5 years at 20%. It has EPS annual growth over the past 5 fiscal years of 56.8% when sales grew 10.7. It reported 17.6% sales growth, and 61.3% EPS growth in the last quarter.

The stock is trading at $46.52, up 57.48% from 52-week low of $29.54. The stock trades down -4.65% from its peak of $48.79 and % below the consensus price target of $50.4. Its volume clocked up at 1.61 million shares which is higher than the average volume of 0.87 million shares. Its market capitalization currently stands at $1.93B.

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