Like a successful video game play, Dave & Buster's Entertainment(NASDAQ: PLAY) was a stock market winner on Wednesday. The company's share price leaped nearly 5% higher following the release of its second-quarter results, making it an outlier on a day when the S&P 500 index booked a gain of slightly more than 1%.
A crushing beat on the bottom line
Dave & Buster's management unveiled those results after market hours Tuesday, which is why the company was a hot item with investors the following day. For the period, the company earned revenue of just over $557 million, which was nearly 3% higher year over year. This occurred despite a 6% fall in same-store sales.
Meanwhile, non-GAAP (adjusted) net income saw a more robust increase, climbing to almost $46 million ($1.12 per share) from the year-ago profit of slightly below $41 million.
Although Dave & Buster's missed the consensus-analyst revenue of $567 million and change, it absolutely blew past that for profitability. On average, pundits tracking the stock were anticipating only $0.91 per share for adjusted-net income.
New and improved
The company is going through a network-wide restaurant remodeling program and recently introduced a revamped menu. It quoted CEO Chris Morris as saying that "Our fully programmed remodels continue to perform well and we are excited about the remodels that have recently opened and will open throughout the remainder of [f]iscal 2024 and beyond."
Morris also spoke optimistically about the company's growth in food and beverage sales, and its "material improvement" in the special-events business.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.
