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Dave & Buster's (PLAY) to Post Q3 Earnings: What's in Store?

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Dave & Buster’s Entertainment, Inc. (PLAY - Free Report) is scheduled to report third-quarter fiscal 2019 results on Dec 10.

In the fiscal second quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 4.7%.

Q3 Expectations

The Zacks Consensus Estimate for the third quarter is pegged at a break-even compared with earnings of 30 cents per share reported in the prior-year quarter. Over the past 30 days, the company’s earnings estimates have been stable. For revenues, the consensus mark stands at $297.27 million, suggesting growth of 5.4% from the year-ago reported figure.

Factors at Play

Dave & Buster's top line in the fiscal third quarter is likely to have benefited from robust sales-building initiatives, steady expansion plans, solid performance of food or beverages and brisk entertainment business. The company’s efforts to enhance in-store and out-of-store customer experience via digital are added positives.

However, higher labor costs due to increased wages might have kept profits under pressure. Further, the company’s non-franchised model makes it susceptible to steep expenses. Since all the restaurants are owned and operated by Dave & Buster’s, instead of signing franchise agreements and putting the burden of costs on the same, the company is solely responsible for expenses of operating the business.

Dave & Buster's Entertainment, Inc. Price and EPS Surprise

 

 

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Dave & Buster’s this time around. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Dave & Buster’s has an Earnings ESP of 0.00% and a Zacks Rank #3. The combination makes surprise prediction difficult for the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Dunkin' Brands Group, Inc. reported mixed results in third-quarter 2019 wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Its adjusted earnings of 90 cents per share outpaced the consensus estimate of 81 cents by 11.1%. Although revenues were up 1.7% year over year to $355.9 million, the same missed the consensus mark of $359 million.

Brinker International, Inc. (EAT - Free Report) reported mixed first-quarter fiscal 2020 results wherein earnings were in line with the Zacks Consensus Estimate but revenues fell shy of the same. Moreover, adjusted earnings of $41 cents per share declined 12.8% from the year-ago quarter, mainly due to increase in stock-based compensation expenses for newly-retired executives. Also, quarterly revenues of $786 million were below the consensus mark of $788 million but 4.3% above on a year-over-year basis.

Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2019 results wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. The company’s adjusted earnings of $3.82 per share topped the Zacks Consensus Estimate of $3.20. The bottom line also improved 76.9% from the year-ago quarter, driven by higher revenues and strong operating margins. Further, quarterly revenues of $1.4 billion exceeded the consensus estimate by 1.8% and rose 14.6% year over year as well.

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