Dave & Buster's Entertainment, Inc. PLAY reported lower-than-expected second-quarter fiscal 2025 results, with earnings and revenues both missing the Zacks Consensus Estimate. The top line increased slightly on a year-over-year basis, while the bottom line declined from the prior year. Following the results, the company’s shares fell 16.6% in the after-hours trading session yesterday.
Management expressed confidence in the company’s long-term potential, even as fiscal second-quarter results missed estimates. The business model remains profitable, with new store openings expected to deliver high returns, strong unit-level economics, disciplined cost management and healthy free cash flow generation.
PLAY continues to face challenges related to value perception, comparable sales, margin and cost pressures. However, targeted initiatives are showing early progress, including menu innovation, the launch of new arcade titles, remodel programs with stronger marketing support and the rollout of a lower-cost prototype. Backed by disciplined capital management and solid momentum in special events, management remains cautiously optimistic that these efforts will help stabilize performance and drive long-term shareholder value.
Dave & Buster’s Q2 Earnings & Revenues
For the fiscal second quarter, the company reported adjusted earnings per share (EPS) of 40 cents, missing the Zacks Consensus Estimate of 88 cents. In the year-ago quarter, it posted an adjusted EPS of $1.12.
Quarterly revenues totaled $557.4 million, missing the consensus mark of $562 million. The top line increased 0.5% from $557 million reported in the prior-year quarter.
Food and Beverage revenues (34.6% of total revenues in the reported quarter) increased 6.3% year over year to $192.9 million. Our estimate was $182.1 million.
Entertainment revenues (65.4%) fell 3% year over year to $364.5 million. Our estimate was $367.2 million. To strengthen cash flow, the company is prioritizing efficiency by cutting low-ROI projects and eliminating wasteful capital expenditures.
Comparable store sales (including Main Event-branded locations) declined 3% year over year. Sequentially, the company's sales at existing stores in the third quarter are moving in the same direction as they were when the second quarter ended.
Dave & Buster’s Q2 Operating Highlights
During the fiscal second quarter, operating income amounted to $53 million compared with $84.5 million reported in the year-ago quarter. Our estimate for the metric was $64.6 million.
Adjusted EBITDA in the quarter was $129.8 million compared with $151.6 million in the year-earlier quarter. Our estimate for the metric was $123.4 million. The EBITDA margin declined to 23.3% from 27.2% reported in the prior-year period.
Balance Sheet of PLAY
As of Aug. 5, 2025, cash and cash equivalents were $12 million compared with $6.9 million as of Feb. 4, 2025.
At quarter-end, net long-term debt was approximately $1.55 billion compared with $1.48 billion at the end of fiscal 2024. The company maintains available liquidity of $443.3 million, including its revolving credit facility.
Dave & Buster’s Store Development Updates
Dave & Buster’s continues to advance its growth initiatives through new store openings and remodels. During the fiscal second quarter, the company opened three new domestic stores, and after the second quarter ended, it opened one more Dave & Buster’s store in the United States and two more Main Event stores.
During the second quarter, PLAY launched its second franchise store in India. Looking ahead, the company plans to open at least five more international franchise stores within the next six months. It also completed three remodels as part of its store-refresh program.
PLAY’s Zacks Rank & Key Picks
Dave & Buster’s currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are BJ's Restaurants, Inc. BJRI, Groupon, Inc. GRPN and Sprouts Farmers Market, Inc. SFM.
BJ's Restaurants currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
The company delivered a trailing four-quarter negative earnings surprise of 102.7%, on average. BJ's Restaurants' stock has gained 23.1% in the year-to-date period. The Zacks Consensus Estimate for BJ's Restaurants' 2025 sales and EPS indicates growth of 3.3% and 43.5%, respectively, from the year-ago period’s levels.
Groupon sports a Zacks Rank of #1 at present. The company delivered a trailing four-quarter earnings surprise of 230.5%, on average. Groupon's stock has surged 101.7% year to date.
The Zacks Consensus Estimate for Groupon’s 2025 sales and EPS indicates growth of 2.4% and 153%, respectively, from the prior-year levels.
Sprouts Farmers presently carries a Zacks Rank #2 (Buy). The stock has gained 27.4% in the year-to-date period. Sprouts Farmers delivered a trailing four-quarter earnings surprise of 13.4%, on average.
The Zacks Consensus Estimate for Sprouts Farmers’ 2025 sales and EPS implies growth of 15.7% and 40.8%, respectively, from the year-ago levels.
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BJ's Restaurants, Inc. (BJRI): Free Stock Analysis Report Groupon, Inc. (GRPN): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Dave & Buster's Entertainment, Inc. (PLAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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