Shares of Dave & Buster’s (PLAY) sank in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at -$0.45, which missed analysts’ consensus estimate of -$0.40 per share. In addition, sales decreased by 3% year-over-year, with revenue hitting $453 million. This also missed analysts’ expectations of $463.7 million.
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This decrease in revenue can be attributed to a 7.7% drop in comparable store sales on a year-over-year basis. However, there are some positive signs for Dave & Buster’s. Indeed, the company opened three new stores and remodeled 11 existing ones during the third quarter. Interestingly, the remodeled stores outperformed the rest of the store base. As a result, the company is planning to remodel a total of 44 by the end of 2024.
In addition, PLAY returned over $28 million to shareholders during the third quarter in the form of buybacks. Dave & Buster’s has regularly repurchased its shares in each of the most recent quarters (as demonstrated in the image below) for a year-to-date total of $88 million. This represents 5.1% of the company’s outstanding shares. It is also worth noting that PLAY has $112 million remaining under its buyback plan.
Is PLAY Stock a Good Buy?
Unfortunately, Dave & Buster’s did not provide investors with guidance. However, we can turn to Wall Street for its forecast. Indeed, analysts have a Strong Buy consensus rating on PLAY stock based on five Buys, one Hold, and zero Sells assigned in the past three months. After a 23% decline in its share price over the past year, the average PLAY price target of $56.50 per share implies 53.53% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
