Growth Initiatives
As far as growth is concerned, the positive effect of the steps taken by the management at the beginning of the year to strengthen the brand will likely reflect in the results. Especially, the steady expansion of the store network bodes well for the company.
The recent weakness in walk-in comparable-store sales points to the need for extra attention in that area. High expenses could be a dampener for profitability as margins might come under pressure.
Losing Sheen
The strong momentum witnessed in earnings and revenue in the past seems to have softened this year. Going forward, competition might add to the weakness as new players are entering the market, encouraged by the growing demand for the dining-entertainment combination.
Looking Back
For the first quarter of 2019, the company reported a 9% increase in earnings to $1.13 per share, beating the estimates, on the back of solid revenue growth and a decline in taxes. Revenues grew in the same degree to $364 million but fell short of expectations. Meanwhile, a downward revision of the full-year outlook took the sheen off the positive performance and triggered a stock sell-off.
Dave & Buster’s shares are yet to fully recover from the huge loss they suffered after the management issued dismal full-year guidance in June. The stock has lost about 13% in the past six months and 27% since last year.