Dave & Buster's Jumps as KKR Takes 6.3% Stake

Dave & Buster's Entertainment shares jumped Friday after private-equity firm KKR disclosed in a regulatory filing that it had a 6.3% stake in the entertainment and dining chain.
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Dave & Buster's Entertainment (PLAY) - Get Report shares jumped in premarket trading Friday after the private-equity firm KKR disclosed in a regulatory filing that it had taken a 6.3% stake in the Dallas entertainment and dining chain.

KKR said it intends “to continue to engage in discussions with management" or the board "about its business, operations, strategy, plans and prospects, from time to time.”

The filing also said KKR may discuss with management, the board, stockholders and others “any extraordinary corporate transaction,” including a merger, reorganization or liquidation, or a change in the board.

In December, the company reported GAAP third-quarter earnings per share of 2 cents, missing analysts' estimates of 3 cents. Dave & Buster's reported earnings of 30 cents a share for the year-earlier period. 

Revenue was $299.4 million, up 6.1% and beating Wall Street estimates of $296 million. Same-store sales declined 4.1%, against expectations of 4%. Store count increased 13%.

Food-and-beverage revenue was $124 million, beating estimates of $123 million. Entertainment revenue was $174 million, beating estimates of $173 million.

The company on Monday affirmed its financial guidance for its fiscal year ending Feb. 2. Net income is expected to range from $94 million to $98 million, while Ebitda is pegged at $275 million to $280 million. Revenue is expected to range from $1.347 billion to $1.354 billion.

Dave & Buster's, which opened its first store in 1982 and now operates more than 110 locations, said it expected to report fiscal-fourth-quarter and fiscal-year results in early April 2020. 

"We remain focused on our near-term priorities to revitalize our existing stores, build deeper guest engagement, prioritize spending, allocate capital to high-return opportunities, and return capital to shareholders,” CEO Brian Jenkins said in a statement