Dave & Buster’s Stock is Ready to Make A Play

PLAY Stock Continues To Climb Despite COVID Resurgence, As Customers Flock Back To Dining And Entertainment

Dave and Buster's Interactive Entertainment, Inc. (NASDAQ:PLAY) stock has remained solid in the aftermath of the pandemic market downturn. The legendary dine and play chain now has all its 143 locations open for business, with one new location being added.  Despite the COVID-19 omicron variant's resurgence, the Company's fundamentals have continued to improve as customers flock to restaurants and entertainment facilities.

The company will implement a remodeling program to improve current store visits. The plan is to convert a 70,000 square foot shop that was built 30 years ago into two smaller stores in key locations with developing markets.  The firm intends to expand on its offerings in the summer games' rollout with "significant" market initiatives. Dave & Buster's stocks can be found at opportune pullback levels for those looking for exposure in a dining and entertainment company.

2021 Third Quarter Earnings Release

On December 7, 2020, Dave & Buster's released its third-quarter fiscal 2021 results for the period ending October 2021.  The company beat estimates by $0.08, reporting a profit of $0.21 excluding non-recurring items versus expectations for a profit of $0.13 in earnings per share (EPS) after non-recurring items are taken.  Revenues increased 191.6% year over year (YOY) to $317.98 million, falling short of the $319.74 million consensus forecast. SSS in comparable stores improved 1.1 percent compared with last year's fourth quarter. The firm anticipates a positive comparable SSS as opposed to Q4 2019

Dave & Buster’s interim CEO David Sheehan commented,

Since assuming the role, I have been impressed with our team’s hard work and dedication to operating in this evolving environment. I am excited to be working with them as we look forward to more normalized operations across our stores. We have begun a new phase of innovation, growth, and value creation with a focus on realizing the Company’s significant upside potential. I am excited about the future and look forward to sharing our progress with all of our stakeholders.”

Takeaways

Interim CEO Sheehan set the tone of the conference call, stating:

“As you know, we have made great progress in reopening and building back sales ... we are beginning a new phase of innovation, growth, and value creation here at Dave & Buster's ...  Our intent is to optimize our current stores’ full potential and accelerate innovation to drive incremental traffic to our brands. In order to accomplish this goal, we are laser-focused on organic growth. This will be accomplished by optimizing the performance of our existing stores, while continuing to achieve best in class returns on our new stores. With respect to organic growth, we will broaden our entertainment offering to include more immersive sports viewing experiences, including improvements to the watch environment and the addition of fantasy sports and in sports betting option as permitted. We also see significant opportunity to drive traffic in our off peak days and dayparts, and we are evaluating a variety of initiatives to extract more value out of our existing stores."

He concluded by saying,

Finally, we will continue to refine our store layouts and sizes to optimize their market potential. We are making significant progress in this area and recent results are showing much higher returns than anticipated. This will meaningfully expand our brand's potential in coming years. I'm very excited about the future of this company. We have meaningful upside. And as you can see from our third quarter results, we are on our way to realizing that potential."


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