Photo Credit: Mike Mozart

Dave & Buster’s Entertainment (PLAY) Consumer Discretionary - Hotels, Restaurants & Leisure | Reports September 6, After Market Closes

Key Takeaways

• The Estimize consensus is calling for earnings per share of 47 cents on $246.69 million in revenue, 3 cents higher than Wall Street on the bottom line and $2 million on the top
• Dave & Buster’s expansion strategy has driven revenue growth and comparable sales in recent years
• Earnings have exceeded expectations in every quarter that Dave & Buster’s has been listed as a public company
• What are you expecting for PLAY? Get your estimate in here!

The earnings calendar is light with very few companies scheduled to report results during this short work week. Dave & Buster’s headlines the short list of reports tonight with expectations at an all time high. PLAY has topped expectations in every reported quarter as a publicly traded company. As a result shares are up 171% since its IPO and historically jumps 5% immediately following an earnings report.

The Estimize consensus is calling for earnings per share of 47 cents, 20% higher than the same period last year. That estimate has dropped 3% in the past 3 months and 11% in the last 30 days. Revenue for the period is anticipated to increase 14% to $246.69 million, marking a 4th consecutive quarter of double digit revenue gains. On average, this is a name that consistently beats both the Estimize and Wall Street consensus. 

Dave & Buster’s has been one of the few recent IPOs whose rapid growth has translated to market gains. The full year 2015 featured a 16% increase in revenue coupled with 9% gains in comparable store sales. Driving growth was 10 new stores in the United States. In 2016 the company intends to open 9 to 10 new stores spanning from small to large store formats. Dave & Buster’s is a third of the way to reaching its goal having opened 3 stores in the first quarter. An additional 6 stores under construction should continue to boost comparable store sales moving forward.

The financial outlook for fiscal 2016 was also raised in its Q1 analyst call. Total revenues are expected in the range of $983 - $995 from $967- $987 million. Lower bound comparable store sales expectations jumped about 1.25% from 2% to 3.25%.

Not too many bad things can be said about Dave & Buster’s at the moment. With a rapid expansion plan in place, the company could see increasing operating expenses and pressure on margins. Meanwhile, the weaker spending environment might deter consumers from frequenting Dave & Buster’s stores