Dave & Buster’s climbs as execs optimistic about Q2, despite mixed Q1
The adult arcade chain missed profit estimates, but company officials say traffic is starting to bounce back.
Shares of Dave & Buster’s jumped by double digits Wednesday afternoon after the company posted mixed Q1 results following Tuesday’s close. Adjusted earnings per share landed at $0.76, majorly missing Wall Street estimates of $1.01, per FactSet. Revenue, meanwhile, fell nearly 4% to $567.7 million, but still topped analysts’ forecasts of $566.8 million.
Spending fell across the board, with guests pulling back on both food and entertainment. Comparable-store sales dropped 8.3%. During the quarter, the company opened two new stores and relocated one.
Despite the slowdown, execs struck a hopeful tone. “Through the first five weeks of Q2, we’re seeing further sequential improvement, with comps down just 2.2%,” CFO Darin Harper said on the earnings call. “We believe that reflects the impact of the various initiatives we’ve focused on this year, and there remains a lot of work ahead.”
The company also highlighted a strong Memorial Day weekend and increasing popularity for its Eat & Play Combo, which has helped lift food sales. “We’re still in the early innings, but we feel like we’re building the right momentum,” Harper added.
Despite today’s rally, Dave & Buster’s shares are still flat on the year and down 38% over the past 12 months.
