Dave & Buster'S (PLAY) Announces Fourth Quarter And Fiscal Year End 2024 Earnings Results; Repurchases $108 Million Of Shares And Executes Sale Leaseback Of Five Properties For $111 Million

Dave & Buster’s Entertainment, Inc. (PLAY) today announced its financial results for the recent quarter, revealing a miss on both earnings and revenue estimates. The company reported quarterly revenue of $534.5 million, falling short of the expected $544.7 million. Additionally, the diluted earnings per share came in at $0.24, which was below the anticipated $0.67. These results reflect challenges the company faced during the quarter.

Key Highlights:

• Dave & Buster’s reported a 10.8% decrease in revenue for Q4 2024 compared to Q4 2023, with comparable store sales down 9.4%.
• The company opened five new stores in Q4 2024, totaling 14 new stores for the fiscal year.
• Dave & Buster’s repurchased $108 million of shares and executed a sale-leaseback of five properties for $111 million.
• The company ended Q4 2024 with $510.4 million in liquidity.
• Dave & Buster’s opened its first franchise location in Bengaluru, India, and plans to open at least six additional franchise units in the next 12 months.
• Kevin Sheehan, Board Chair and Interim CEO, emphasized a “back to basics” strategy to improve business performance.

Summary:

Dave & Buster’s Entertainment, Inc. reported a challenging fourth quarter for fiscal year 2024, with a 10.8% decline in revenue compared to the same period in 2023. The company attributed part of this decline to a decrease in comparable store sales by 9.4%. Despite these setbacks, Dave & Buster’s continued its expansion efforts by opening five new stores in the fourth quarter, bringing the total to 14 new stores for the fiscal year. Additionally, the company executed a sale-leaseback transaction for five properties, generating $111 million in proceeds, and repurchased $108 million worth of shares, reflecting a strategic focus on optimizing its asset base and returning value to shareholders.

Kevin Sheehan, the Board Chair and Interim CEO, acknowledged the disappointing results but expressed confidence in the company’s strategic direction. He highlighted the leadership team’s efforts to rectify past mistakes and implement a “back to basics” strategy aimed at enhancing key business areas such as marketing, food and beverage, and operations. Sheehan noted that recent trends in March and April showed improvement, and he remained optimistic about the company’s financial position, citing strong liquidity and low leverage. Looking ahead, Dave & Buster’s plans to continue its international expansion, with the opening of its first franchise location in Bengaluru, India, and additional franchise units expected in the coming year.

Dave & Buster’s Entertainment, Inc. (PLAY) has experienced a tumultuous period in the stock market, with its share price plummeting by a staggering 74.14% over the past year. The recent one-week and one-month declines of 10.78% and 11.30%, respectively, highlight the ongoing volatility and investor uncertainty surrounding the company. Despite these challenges, Dave & Buster’s maintains a relatively low price-to-earnings ratio of 8.07, suggesting that the stock might be undervalued compared to its earnings. However, the company’s earnings per share (EPS) have seen a negative two-year compound annual growth rate (CAGR) of -1.82%, indicating struggles in profitability. On a more positive note, the revenue has grown at a healthy two-year CAGR of 12.25%, showcasing the company’s ability to generate sales even in a challenging environment. The return on invested capital stands at 6.74%, reflecting moderate efficiency in using its capital to generate returns. Nevertheless, with a net profit margin of just 3.27%, the company faces significant pressure to improve its profitability to regain investor confidence.

Dave & Buster’s Entertainment, Inc. owns and operates entertainment and dining venues for adults and families in North America. Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster’s name. As of January 30, 2022, it owned and operated 144 stores located in 40 states, Puerto Rico, and one Canadian Province. The company was founded in 1982 and is headquartered in Coppell, Texas.