Personal Finance

Why Shares of Dave & Buster's Entertainment, Inc. Popped 17% Today

A row of games where the player rolls a ball up an inclined ramp launching it towards different holes.

What happened

Shares of entertainment company Dave & Buster's Entertainment, Inc. (NASDAQ: PLAY) jumped as much as 16.7% in trading Tuesday after reporting better-than-expected first-quarter fiscal 2018 results. Shares settled down slightly mid-day and were up 13.7% at 11:15 a.m. EDT.

So what

First-quarter revenue jumped 9.2% to $332.2 million on the back of six new store openings in the quarter. Net income was down slightly from a year ago to $42.2 million, or $1.04 per share. On the downside, comparable store sales fell 4.9% in the quarter, although the decline was offset by new store openings.

A row of games where the player rolls a ball up an inclined ramp launching it towards different holes.

Image source: Getty Images.

According to FactSet, analysts were only expecting $321.6 million in revenue and earnings of $0.94 per share. It's the earnings beat that really surprised investors and that's why shares are moving sharply higher today.

Now what

Dave & Buster's is expanding quickly, expecting to open 14 to 15 new stores this year. But management also expects same store sales to fall low-to-mid single digits in a sign that the business is weakening in core markets. Management is trying to increase interest in Dave & Busters by introducing Angus burgers and launching a virtual reality platform , so the hope is that the strategy will get stores growing again. If stores do begin growing we could see even bigger long-term gains for the stock.

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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