Dave & Buster's Beats Q2 Expectations, Shares Surge

Shares of Dave & Buster's Entertainment, Inc. PLAY jumped around 7 percent in after-hours trading after the company reported stronger-than-expected results for its second quarter on Tuesday. The Dallas, Texas-based company posted quarterly net income of $12.6 million, or $0.29 per share, versus a year-ago net loss of $13.9 million, or $0.42 per share. Pro forma net income surged to $0.40 per share from $0.16 per share. Its total revenue climbed 19.8 percent year-over-year to $217.3 million from $181.4 million. However, analysts were expecting earnings of $0.23 per share on revenue of $204.30 million. The average estimate among 7 Estimize users was for earnings of $0.24 per share and revenue of $204.48 million. Comparable store sales surged 11.0 percent in the latest quarter, compared to a 5.7 percent gain in the year-ago quarter. Food and Beverage revenue rose 16.8 percent to $99.2 million, while Amusements and Other revenue jumped 22.4 percent to $118.1 million in the quarter. The company opened 2 stores in the second quarter. Its adjusted EBITDA rose 37.1 percent to $52.7 million from $38.4 million. Steve King, Chief Executive Officer said, "Dave & Buster's is enjoying an incredible year of financial performance and we are once again delighted to be raising our annual guidance. During the second quarter, we generated a double-digit comparable store sales gain and have now exceeded the competitive industry benchmark for thirteen consecutive quarters. Our 2014 and 2015 classes meaningfully contributed to the 19.8% growth in our second quarter top-line, and similar to the first quarter, our strength was broad-based across our sales categories, operating days, day-parts, and geographies." The company now expects Pro-forma 2015 net income of $52.5 million to $55 million, versus its prior forecast of $43.5 million to $46 million. It now projects total revenue of $844 million to $853 million, compared to earlier outlook of $822 million to $831 million. Dave & Buster's shares gained 6.92 percent to $40.00 in the after-hours trading session.