Dave & Buster’s (PLAY:NSD) experienced a notable surge of over 4% in PLAY stock price during yesterday’s extended trading session. This upward momentum follows the release of mixed results for the company’s fiscal first quarter of 2023, which ended on April 30. Investors were particularly pleased with Dave & Buster’s positive year-over-year comparisons and its ongoing efforts to expand its global presence through new store openings.
PLAY Stock-Financial Performance Highlights:
Dave & Buster’s, known for its entertainment and dining services across its 210 North American venues, including Canada and Puerto Rico, reported a 32.4% year-over-year increase in revenues, reaching $597.3 million. Although slightly below Street expectations of $603.9 million, this growth was driven by a remarkable 31.4% surge in Entertainment revenues and a notable 34.4% rise in Food and Beverage revenues.
Earnings and Comparable Store Sales:
The company’s earnings of $1.45 per share exceeded the consensus estimate of $1.26 per share and showed improvement compared to the previous year’s figure of $1.35 per share. However, Dave & Buster’s comparable store sales, including Main Event branded stores, experienced a decline of 4.1% compared to the year-ago quarter. Notably, these sales have increased by an impressive 10.3% from the pre-pandemic level recorded in 2019.
Global Expansion Efforts:
During the fiscal first quarter, Dave & Buster’s continued its expansion initiatives by opening a new store in Puerto Rico and three additional Main Event stores. Moreover, the company signed two international franchise agreements, paving the way for up to 15 stores in India and approximately five stores in Australia, further solidifying its international presence.
PLAY Stock-Investment Outlook:
Dave & Buster’s growth strategy, encompassing both domestic and international expansion, along with a focus on driving comparable store sales, positions the company for long-term growth. Furthermore, the company’s cost-reduction measures are expected to expand margins and improve cash flow. With a strong cash position and up to $100 million remaining under its current repurchase authorization for fiscal 2023, Dave & Buster’s demonstrates a commitment to capital deployment.
PLAY Stock-Analyst Consensus:
Wall Street exhibits an optimistic outlook for Dave & Buster’s, with a Strong Buy consensus analyst rating based on six Buy ratings and two Holds. The average PLAY stock price target of $52.14 indicates a potential upside of 54.5%. Notably, investors seeking guidance from a successful analyst may consider following the trades of Jefferies analyst Andy Barish. Following Barish’s recommendations on PLAY stock for one year could potentially result in profitable transactions, with an average return of 12.76% per trade.
The Takeaway:
Dave & Buster’s impressive financial market performance, positive year-over-year comparisons, and ongoing global expansion plans highlight its potential for long-term growth. The company’s commitment to reducing costs, its strong cash position, and its remaining repurchase authorization further solidify its investment outlook. With Wall Street maintaining a Strong Buy consensus rating, investors may find Dave & Buster’s an attractive opportunity, potentially yielding substantial returns in the future.
