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Tuesday, December 5, 2017

Dave & Busters (PLAY) reported earnings Tue 5 Dec 2017 (a/h)

** charts before earnings **


** charts after earnings **


Dave & Busters beats by $0.04, misses on revs; lowers full year revs guidance below consensus 
  • Reports Q3 (Oct) earnings of $0.27 per share, $0.04 better than the Capital IQ Consensus of $0.23; revenues rose 9.3% year/year to $250 mln vs the $255.7 mln Capital IQ Consensus. Comparable store sales decreased 1.3%. Co opened one new store compared to two new stores.
  • Co states that hurricanes during the quarter had an unfavorable impact on our comparable store sales growth, total revenue and EBITDA of approximately 50 basis points, $2 million and $0.7 million respectively. In addition, wildfires had an unfavorable impact on our California stores. 
  • Co lowers guidancefor FY18 (year ends Feb 2018) revs to $1.148-$1.155 bln (previously $1.160-1.170 bln) vs. $1.17 bln Capital IQ Consensus Estimate. Downside guide is primarily driven by the impact of hurricanes, including a delay in our Puerto Rico opening; and reduced comparable store sales guidance. Sees comparable store sales increase of 0.0% to 0.75% (on a comparable 52-week basis) (vs. 1% to 2% previously). Expects to open 14 new stores. Sees Net income of $110-$112 million (vs. $109 million to $113 million previously). 
  • For the following year FY19 (refers to as fiscal 2018), co expects low-double-digit growth in revenue and high-single-digit to low-double-digit growth in EBITDA on a comparable 52-week basis. Co plans to give more comprehensive guidance for next year on fourth quarter 2017 conference call, which is expected in early April 2018. 
Dave & Busters introduces new smaller store format of 15,000 to 20,000 square feet  
  • In fiscal 2018, co plans to open a total of fourteen to fifteen new stores, representing unit growth of 13% to 14%. These openings will skew towards the large store format and existing markets for our brand.
  • Co also announced a new smaller store format of 15,000 to 20,000 square feet to capitalize on demand in smaller markets not included in original plan. Long term, co sees potential to open 20 to 40 of these stores, including two that are part of 2018 plan. This new format has the potential to expand whitespace opportunity by 10% to 20% beyond the original target of 211 locations in the United States and Canada alone. 

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