William Blair analyst Sharon Zackfia has maintained their neutral stance on PLAY stock, giving a Hold rating on September 5.
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Sharon Zackfia’s rating is based on several key considerations. Dave & Buster’s Entertainment experienced a decline in both revenue and profit margins in the second quarter, with comparable sales dropping by 3%. This decline suggests a further slowdown in the latter part of the quarter compared to the earlier weeks.
Additionally, the company’s unit-level margin decreased significantly due to sales leverage issues and a shift in sales mix towards lower-margin food and beverage offerings. The adjusted EBITDA margin also saw a notable contraction, and the overall adjusted EBITDA fell short of expectations due to various cost pressures, including new unit costs and increased marketing expenses. These factors combined led to the Hold rating, as they indicate challenges in achieving expected financial performance.
In another report released on September 5, UBS also maintained a Hold rating on the stock with a $29.00 price target.