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Dave & Buster's Comparable Sales Improve - Shares Are Higher

Gaming-and-restaurant operator Dave & Buster's is reporting improved comparable sales.

Dave & Buster's Entertainment  (PLAY) - Get Dave & Buster's Entertainment, Inc. Report reported improved comparable sales, but overall sales remain lower as the dining-and-entertainment-venue operator looks to emerge from the coronavirus pandemic shutdown.

Shares of the Dallas company at last check were 1.8% higher at $14.90. 

Comparable-store sales declined 75% in August and 62% in September, compared with a drop of 87% during the second quarter, Dave & Buster's said in a statement.

The company said it had opened one new store and reopened 98 of its 136 stores as of Oct. 4.

In August, 84 stores were open at the end of the month, of which 68 were comparable stores. 

The 68 comparable stores performed at an index of 46% compared with their 2019 levels. 

In September, 99 stores were open at the end of the month, of which 81 stores were comparable stores. 

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The 81 comparable stores performed at an index of 65% compared with their 2019 levels, excluding five open stores where governments have not permitted arcades to open.

Dave & Buster's said that by managing costs and refining its operating model, it estimates that it can reach break-even on the basis of earnings before interest, taxes, depreciation and amortization with revenue at 50% to 55% of 2019 sales.

As of Oct. 4, the company had $197 million of cash and equivalents and about $744 million outstanding under its credit facility.

"We remain optimistic that we will emerge from this challenge in a stronger competitive position to deliver fun to our guests and value to our shareholders," Chief Executive Brian Jenkins said in the company statement.

In September, Dave & Buster's warned in a securities filing that might have to file for bankruptcy

Since that time, some analysts have been upgraded their ratings on the company. 

In mid-September, Raymond James analyst Brian Vaccaro lifted his rating to outperform from market perform, with a share-price target of $20, while Stifel analyst Chris O’Cull boosted his rating to buy from hold, raising his share-price target to $20 from $18.