- By Mrinalini Chaudhuri
Dallas-based Dave and Buster's Entertainment (PLAY) reported a strong third quarter and improved its guidance. With improved top and bottom lines, the management raised the revenues and net income guidance. It saw momentum across the country in the quarter.
Dave and Buster's boasts of its one-of-a-kind dining, entertainment and sports-viewing venues. Founded in 1982, this company owns 91 venues in North America. It offers the customers American gourmet in a different style. From hamburgers to steaks to seafood, it offers a wide array of items. The stores offer various fun attractions like watching sports while eating out. It caters to a diverse customer base.
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The intrinsic value of PLAY
Strong third quarter
Total revenues during the quarter increased by 19% and were $228.7 million ($192.8 million in the prior-year quarter).
Across all stores, Food and Beverage revenues increased by 13% and were $101.3 million ($89.8 million in the prior-year quarter).
Amusements and Other revenues increased by 24% and were $127.3 million ($102.9 million in the prior-year quarter).
Comparable store sales increased by 5.9% in the third quarter.
Noncomparable store revenues increased by $26.2 million or 106% in the third quarter and were $50.9 million.
Operating income increased to $18.7 million in the third quarter ($9.5 million in the prior-year quarter).
Net income increased to $10.8 million, or 25 cents per diluted share ($4.6 million, or 11 cents per diluted share, in the prior-year quarter).
Store-level EBITDA increased by 34% and was $59.6 million in the third quarter ($44.5 million in the prior-year quarter).
Adjusted EBITDA increased by 42% and was $48.9 million in the third quarter ($34.5 million in the prior-year quarter).
Expectations
| Fiscal 2016 | Fiscal 2017 | |
| Total revenues | To be between $998 million and $1.003 billion | The company expects low double-digit growth in total revenue. |
| Effective tax rate | To be between 36.5% and 37.5% | |
| Net income | To be between $86.5 million and $88.5 million | The company expects low double-digit growth in net income. |
| Adjusted EBITDA | To be between $265 million and $268 million | The company expects low double-digit growth Adjusted EBITDA. |
| Diluted share count | To be around 43.2 million | |
| Stores | The company intends to open 11 to 12 new stores. |
Strong attributes of the quarter
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Margin improvement.
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Increase in comparable store sales.
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Improved third-quarter revenue, net income and adjusted EBITDA.
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CAGR of 20%.