PLAY Earnings: Dave & Buster’s Rises despite Big EPS Miss

Shares of Dave & Buster’s (PLAY) rose in after-hours trading after the company reported earnings for its first quarter of Fiscal Year 2025. Earnings per share came in at $0.76, which missed analysts’ consensus estimate of $1.01 per share. Furthermore, sales decreased by 3.5% year-over-year, with revenue hitting $567.7 million. However, this beat analysts’ expectations of $566.8 million.

This decrease in revenue can be attributed to an 8.3% drop in comparable store sales on a year-over-year basis. However, there are some positive signs for Dave & Buster’s. In fact, the company opened three new stores and remodeled 13 existing ones during the quarter. In addition, the company is seeing progress and improved results as its “back to basics” strategy begins to drive a recovery in sales, according to Board Chair and Interim CEO Kevin Sheehan.

While first-quarter performance was below expectations, recent changes in marketing, menu, operations, and investments are starting to pay off. As a result, the leadership team is confident that revenue, EBITDA, free cash flow, and shareholder value will improve going forward. Indeed, Sheehan also pointed to the encouraging signs the company is seeing in June and stated that the company’s strong financial position, disciplined expense management, and high-return business model will be key drivers for future growth.

2026 Outlook

Looking ahead, Dave & Buster’s provided the following guidance for Fiscal Year 2025:

• Total capital expenditures of less than $220 million
• Pre-opening expense of approximately $20 million
• Cash interest expense of $130 million to $140 million

Is PLAY Stock a Good Buy?

Turning to Wall Street, analysts have a Hold consensus rating on PLAY stock based on two Buys, six Holds, and zero Sells assigned in the past three months. Furthermore, the average PLAY price target of $25.40 per share implies that shares are fairly valued. However, it’s worth noting that estimates will likely change following today’s earnings report.

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