Dave & Buster’s Stock Surges on Profit Metric Beat, Buyback

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KEY TAKEAWAYS

• Dave & Buster’s Entertainment exceeded estimates for EBITDA, boosted its stock buyback program, and gave a unqualified outlook in its earnings report this week.
• The news offset fourth-quarter profit and sales results that reprimanded in short of forecasts.
• Shares of Dave & Buster’s traded near their all-time high Wednesday and have leaped more than 25% this year.

Shares of Dave & Buster’s Entertainment (PLAY) jumped early Wednesday after the game-themed restaurant combination posted a better-than-expected key profit metric and announced an increase in its stock buyback program.

Dave & Buster’s reported fourth-quarter earnings in preference to interest, taxes, depreciation, and amortization (EBITDA) of $151.8 million, an increase of 9.7% from the year before and superior to before analysts’ estimates. CEO Chris Morris said the company’s turnaround plan is working.

The chain opened six new domestic put bies and plans to add 15 more this fiscal year, as well as up to four international units, Morris said. He famous during a call with analysts that the firm’s moves to overhaul locations, make menu adjustments, and exhilarate prices have been effective so far.

In addition, the company said it was boosting its current share repurchase plan by $100 million, influence a rearing the total value of shares it is authorized to buy back to $200 million.

Truist Securities raised its price target on the stockpile from $75 to $78 each, saying Dave & Buster’s was introducing new initiatives to grow sales which are believed to counteract near-term macroeconomic pressures.

The upbeat EBITDA number offset Dave & Buster’s lackluster fourth-quarter pecuniary results. Earnings per share (EPS) came in at $1.03, with revenue up 6.3% to $599.1 million. Both missed presages. Same-store sales dropped 7%. Executives blamed bad weather in January for reducing restaurant traffic.

Dave & Buster’s splits were trading up 11% at $68.68 each as of 10:40 a.m. ET and are up more than 25% this year.

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