Dave & Busters Entertainment Inc. (PLAY - Get Report) shares are set to open at a three month high Wednesday after the group smashed Wall Street's estimates for its third quarter earnings and said it will open more stores this year
Profit for the three months ending in October came in at 27 cents a share, the company said late Tuesday, up 8% from the same period last year and topping estimates of 24 cents a share. Sales were up 9.8% to $228.7 million, the Dallas, Tx.-based company reported, even as the impact of hurricanes Irma and Harvey hit same-store sales and trimmed operating margins.
"Our team pulled through remarkably well in the face of unprecedented weather-related challenges in the quarter and difficult comparisons to last year. We continue to believe that the primary growth driver for the business is opening new stores with great returns," said CEO Steve King. "While it is still early, we are also pleased with the results from our 2017 store openings, which reaffirms the concept's broad based appeal. We continue to expect to open fourteen new stores this year, representing 15% unit growth. In addition, we are excited to announce a new smaller store format that expands our brand potential and extends our growth runway."
The group said it will open 14 new stores this year and also introduce what it calls a "small store" format, based on a square foot range of between 15,000 and 20,000, "to capitalize on demand in smaller markets not included in our original plan," the company said.
Dave & Busters shares were marked 8.91% higher in pre-market trading in New York Wednesday, indicating an opening price of $57.60 each, which would be the highest since Sept. 6, the day after the stock had it's largest single-day decline of 11% after limp food and beverage sales -- which account for around 44% of total revenues -- held down second quarter earnings.
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