Dave & Buster's falls short as revenue misses estimates
- Dave & Buster's reported first-quarter revenue of $567.7 million, missing analyst estimates.
- Despite the disappointing results, the company's shares rose by 16%, indicating some investor optimism.
- Analysts adjusted their price targets, showing mixed sentiments about future performance.
In the United States, Dave & Buster's Entertainment Inc. reported their first-quarter earnings for the fiscal year 2025 after the closing bell on a Tuesday. The company's revenue came in at $567.7 million, falling short of the analysts' anticipated $576.41 million as per Benzinga Pro. Furthermore, their adjusted earnings were 76 cents per share, which also missed expectations set at 98 cents per share. This disappointing financial performance led to questions regarding the company’s recent strategies and market position, despite some analysts making positive adjustments to their price targets based on the earnings report. Kevin Sheehan, the board chair and interim CEO of Dave & Buster's, addressed the earnings results, expressing optimism about the company’s forward trajectory. He explained that the operational enhancements they implemented were gradually showing significant improvement, although the first-quarter performance did not meet their expectations. Sheehan emphasized that their 'back to basics' strategy is driving a material recovery in top-line trajectory, even if results were not fully realized in this quarter. Following the earnings announcement, there was a notable market reaction. The shares of Dave & Buster's spiked by 16%, closing at $30.00 the following day. Analysts from UBS and Loop Capital provided differing outlooks; UBS's Dennis Geiger maintained a Neutral rating but raised the price target from $18 to $29, while Loop Capital's Alton Stump kept a Buy rating with a more optimistic price target increase from $35 to $46. This divergence in analyst sentiment highlights varying perspectives on the company's future potential amidst the missed earnings expectations. Looking ahead, Dave & Buster's indicated that they expect total capital expenditures for fiscal 2025 to be less than $220 million. This cautious financial forecast reflects a strategic approach to navigating the current market challenges while aiming for long-term growth and recovery. Ultimately, the initial mixed results prompt both analysts and investors to carefully assess the company's operational strategies moving forward, even as some continue to see potential in the stock based on modified target prices.