In Wednesday trading, Dave & Buster's Entertainment Inc.'s (PLAY, Financial) stock declined nearly 10% on the back of the company reporting its financial results for the second quarter of fiscal 2017 on Sept. 5.
The company posted adjusted EPS of 59 cents, which beat analysts' expectations by two cents. The company’s revenue of $280.8 million grew 14.9% from the year-ago quarter, but fell short of the consensus estimate by $1.15 million.
By segment, food and beverage revenues increased 10.2% to $118.7 million and amusement and other revenues increased 18.6% to $162.1 million. In the reported quarter, comparable store sales increased 1.1% compared to a 1% increase in the year-ago quarter.
Operating income increased from $36 million in the prior-year quarter to $39.2 million, but as a percentage of total revenues, it decreased 80 basis points to 13.9%. EBITDA increased 11.5% to $64 million. As a percentage of total revenues, EBITDA also decreased about 70 basis points to 22.8%.
Dave & Buster's repurchased approximately one million shares of common stock for $67.2 million, accumulating a total 2.1 million shares for $127.1 million. There is room for more repurchases because the company still has nearly $73 million remaining under its buyback authorization.
Chief Financial Officer Brian Jenkins praised the company's strong performance, citing its revenue and EBITDA growth.Ă‚
“In addition, excluding a litigation settlement, we grew EBITDA by nearly 16% and EBITDA margins by 20 basis points," Jenkins said. "Our recent debt refinancing improved our capital structure and financial flexibility, enabling us to invest in new store growth and return value to shareholders for years to come”.
The company projects full-year revenue between $1.160 billion and $1.170 billion. The company expects comparable store sales to increase beteween 1% and 2%, lower than the previous outlook. The company plans to open 14 new stores during the year, up from the previously expected 12 locations. Net income guidance was raised to between $109 million and $113 million from the previous guidance of $107 million to $111 million.
Disclosure: The author holds no positions in any stocks mentioned.
