Shares of Dave & Buster's Entertainment Inc. (PLAY) busted out to the downside iWednesday, Dec. 12, after the company reported better-than-expected earnings and provided strong forward guidance but said comparable same-store sales dropped.
Shares in the Dallas-based restaurant and entertainment chain were down 9.2% to $46.35 on Wednesday.
For its fiscal third quarter, Dave & Buster's reported net income of $11.9 million, or 30 cents a share, vs. earnings of $12.2 million, or 29 cents a share, in the comparable year-earlier quarter. Analysts surveyed by FactSet had expected earnings of 24 cents a share. Revenue rose 13% to $282.1 million from $278 million.
However, comparable-store sales declined about 1.3%, more than the 0.7% drop analysts had expected.
A stock price target cut to $50 from $70 by analysts at Raymond James also fueled the declines in the stock price.
For fiscal 2018, the company boosted its revenue guidance to between $1.24 billion and $1.26 billion, and net income in the range of $106 million and $113 million. The company's previous outlook called for revenue in the range of $1.23 billion and $1.26 billion and net income between $101 million to $111 million.
During its third quarter, the company repurchased approximately 437,000 shares for $25 million, with an additional 149,000 shares for $8.8 million through December 4, during the fourth quarter. As of the same date, the company has cumulatively repurchased 5.1 million shares for $275.6 million under its $400 million share-repurchase authorization.