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Omar Venerio
Omar Venerio
Articles (1580) 

US Stocks Retreat Wednesday

Dave & Buster's plummets on weak results

U.S. stocks were in negative territory on Wednesday. The Dow Jones Industrial Average fell 0.23% to 25,983, the S&P 500 index declined 0.29% to 2,877 and the Nasdaq Composite Index retreated 0.48% to 7,785.

Shares of Dave & Buster's Entertainment Inc. (NASDAQ:PLAY) tumbled more than 22% on Wednesday after the company announced first-quarter results on Tuesday. Revenue grew 9.4% from the prior-year quarter to $363.58 million, falling $8.14 million short of expectations. Earnings of $1.13 per share also fell 1 cent short of analysts' estimates.

“We delivered robust revenue and EPS growth and our new store performance remained strong, but comparable store sales were below expectations largely due to the Easter shift, which proved unfavorable this year," CEO Brian Jenkins said. "We are fully committed to executing on our four strategic priorities to strengthen the brand and remain focused on creating significant shareholder value over the long term.” 

The operating income was $57.7 million, down from $58.6 million in the prior-year quarter. As a percentage of total revenues, operating income decreased 170 basis points to 15.9% from 17.6%.

The earnings before interest, taxes, depreciation and amortization grew 3.2% to $88.9 million. As a percentage of total revenue, the Ebitda magin decreased 150 basis points to 24.4% from 25.9%. Also, adjusted Ebitda increased 2.4% to $98.2 million. The adjusted Ebitda margin decreased 190 basis points to 27%.

Looking ahead to full fiscal 2019, the company expects total revenue between $1.36 billion and $1.39 billion. It also projects comparable store sales growth of between -1.5% and 0.5%. Net income is expected to range from $103 million to $113 million with Ebitda of $283 million to $295 million.

Gainers

Losers

Global markets

The main European stock markets traded deep in the red. The U.K.'s FTSE 100 fell 0.42%, France's CAC 40 slid 0.62%, Germany's Dax declined 0.33% and Spain's IBEX 35 swelled 0.47%.

In Asia, Japan's Nikkei 225 fell 0.35%, India’s BSE Sensex retreated 0.48%, Hong Kong's Hang Seng dipped 1.73% and China's Shanghai Composite declined 0.56%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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