Dave & Buster’s tanks as same-store sales keep falling and profit plunges

Dave & Buster’s fell more than 18% in premarket trading on Tuesday, following the arcade and restaurant chain’s second-quarter earnings report after the bell on Monday.

The chain, which has struggled through a discretionary spending cutback by consumers and an industry-wide tariff hit on prizes, posted a 3% drop in same-store sales on the quarter. That’s D&B’s 10th straight quarter of declining same-store sales.

Dave & Buster’s posted adjusted earnings of $0.40 per share, well below analyst estimates of $0.92 per share. The company’s adjusted profit, $14.1 million, was down 69% from last year.

CEO Tarun Lal blamed too many promotions, a decline in TV ad spend, and an almost 80% pullback in new games for the poor performance. In the food division, Lal said the company “leaned too heavily on appetizers and shareables.”

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Nia Warfield

14m

Warner Bros. Discovery dips after TD Cowen downgrade cools deal frenzy

Warner Bros. Discovery shares were down over 8% after TD Cowen downgraded the stock from “buy” to “hold,” even as it kept its $14 price target.

The dip comes on the heels of a sharp rally sparked by reports that Paramount Skydance may bid for the media giant. TD says that while a successful bid could send WBD north of $20, the current risk-reward feels lopsided. If nothing materializes, shares could slip back toward $11 to $12.

Analysts noted that much of the upside from deal chatter is already priced in. TD also flagged limited potential buyers if Paramount Skydance fell though and the lack of concrete details around a bid. In short: the rumor mill has been driving the stock, but fundamentals haven’t clearly caught up.

Reaction has been mixed: last week, Wells Fargo reiterated an equal-weight rating on the stock and hiked its price target to $14 from $13.

Even with today’s dip, WBD shares are still up 67% year to date.

J. Edward Moreno

33m

Hims falls after FDA posts warning letter

The agency’s letter took issue with the claims made in Hims’ marketing materials.

Luke Kawa

One mother’s LinkedIn post inspired GameStop CEO Ryan Cohen to give a surprise gift to a new employee

The GameStop CEO gave James, a teenage employee an Irving, Texas, an e-bike so he could get to work easier.

James poses with his new e-bike outside a GameStop store

Ralph Lauren falls as Wall Street digests the luxury brand’s modest growth plans

The high-end retailer delivered a solid revenue outlook, but warned that tariffs and inflation could squeeze margins.

Nia Warfield1h

Matt Phillips

Rocket Lab slammed after announcing share sale plans

When the market is throwing cheap cash at you, take it.

That’s essentially what Rocket Lab said it’s going to do by announcing an at-the-market share offering of up to $750 million in securities, hammering its stock price in early trading.

In an at-the-market offering, companies can sell shares directly into the market, effectively diluting existing shareholders, which explains the price move.

While the drop is likely painful for some shareholders who got into the stock only recently, selling shares is a pretty logical way for a company to, literally, capitalize on the market enthusiasm that has sent the stock up more than 600% over the last 12 months.

Rocket Lab said it intends to use the proceeds from the share sale for general corporate and working capital purposes. It also said it may use some of the money to pay the cash portion of the $75 million purchase price for German laser communications company Mynaric, a deal announced back in March, if that acquisition is finalized. (Mynaric was operating under the German version of bankruptcy protection at the time, making the acquisition somewhat complicated.)

“Pending these uses, we may invest the net proceeds from this offering in short-term, interest-bearing instruments. Accordingly, we will retain broad discretion over the use of these proceeds,” the company said.

SEC Filing | Rocket Lab Corporation

In an at-the-market offering, companies can sell shares directly into the market, effectively diluting existing shareholders, which explains the price move.

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