The entertainment and dining chain posted a wider loss than analysts had modeled, sending shares to a new 52-week low.
Dave & Buster's Entertainment reported a second-quarter loss that came in well below what analysts had expected, and the stock responded by falling to a new 52-week low. For the 13 weeks ended August 4, the company posted total revenue of $544.1 million, down 2.4% from a year earlier, against analyst estimates that had called for revenue closer to $556.8 million.
The bottom line missed by a wider margin than the top line. On a GAAP basis, Dave & Buster's reported a net loss of $12.5 million, or 36 cents per diluted share, compared with net income of $11.4 million, or 32 cents per share, in the same period last year. On an adjusted basis, which strips out certain one-time items, the company posted a loss of 27 cents per share, against analyst estimates that had projected a profit of roughly 19 cents per share, a swing of nearly 50 cents from what the market had modeled. Adjusted earnings before interest, taxes, depreciation and amortization came in at $98.9 million, down from $129.8 million a year earlier and well short of the roughly $116.6 million analysts had projected.
The composition of the miss points to a broad-based softening in customer traffic rather than a single one-off item. Comparable sales, which measure revenue at locations open at least a year, fell 2.9% year over year, and revenue per store week, a measure of productivity across the company's roughly 250 locations, dropped to $170,000 from $182,000 a year earlier. The company opened six new domestic locations during the quarter, meaning overall store count continued to expand even as sales at existing locations weakened, a combination that tends to mask underlying same-store softness in simple headline revenue figures.
Shares fell sharply on the report and extended their decline into the following trading session, dropping more than 12% from the prior close to trade near $7.44, well below the stock's 52-week high above $24. The company reported available liquidity of $492.1 million, giving it room to continue investing in new locations and remodels even as it works through the current same-store sales softness. The release did not include explicit forward guidance, leaving investors to judge for themselves whether the second quarter's traffic weakness reflects a temporary pullback in discretionary consumer spending or a more durable shift away from the company's out-of-home entertainment and dining format.