Winners And Losers Of Q2: Dave & Buster's (NASDAQ:PLAY) Vs The Rest Of The Leisure Facilities Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the leisure facilities stocks, including Dave & Buster's (NASDAQ:PLAY) and its peers.

Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.

The 11 leisure facilities stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 13.8% below.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

In light of this news, leisure facilities stocks have held steady with share prices up 2% on average since the latest earnings results.

Dave & Buster's (NASDAQ:PLAY)

Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.

Dave & Buster's reported revenues of $557.1 million, up 2.8% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ earnings estimates.

“We are pleased with the progress we are making on our strategic initiatives and on the strong financial results achieved during the quarter. During the quarter, we grew Revenue and Adjusted EBITDA, expanded our Adjusted EBITDA margins and generated strong operating cash flow which allowed us to invest in the business and return cash to shareholders. We have also continued to make significant progress toward our strategic goals. 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 Fiscal 2024 and beyond,” said Chris Morris, Dave & Buster's Chief Executive Officer.

Interestingly, the stock is up 8% since reporting and currently trades at $32.25.

Is now the time to buy Dave & Buster's? Access our full analysis of the earnings results here, it’s free.

Best Q2: Life Time (NYSE:LTH)

With over 150 locations and gyms that include saunas and steam rooms, Life Time (NYSE:LTH) is an upscale fitness club emphasizing holistic well-being and fitness.

Life Time reported revenues of $667.8 million, up 18.9% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with an impressive beat of analysts’ same-store sales and earnings estimates.

Life Time pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 20% since reporting. It currently trades at $24.97.

Is now the time to buy Life Time? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Xponential Fitness (NYSE:XPOF)

Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE:XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.

Xponential Fitness reported revenues of $76.52 million, down 1.1% year on year, falling short of analysts’ expectations by 8.5%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.

Xponential Fitness delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 25.2% since the results and currently trades at $12.73.

Read our full analysis of Xponential Fitness’s results here.

Planet Fitness (NYSE:PLNT)

Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE:PLNT) is a gym franchise which caters to casual fitness users by providing a friendly and inclusive atmosphere.

Planet Fitness reported revenues of $300.9 million, up 5.1% year on year. This number topped analysts’ expectations by 3.5%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.

The stock is up 17.8% since reporting and currently trades at $84.85.

Read our full, actionable report on Planet Fitness here, it’s free.

European Wax Center (NASDAQ:EWCZ)

Founded by two siblings, European Wax Center (NASDAQ:EWCZ) is a beauty and waxing salon chain specializing in professional wax services and skincare products.

European Wax Center reported revenues of $59.87 million, up 1.3% year on year. This result came in 2.4% below analysts' expectations. Overall, it was a slower quarter as it also logged full-year revenue guidance missing analysts’ expectations and a miss of analysts’ same-store sales estimates.

The stock is up 1.2% since reporting and currently trades at $7.01.

Read our full, actionable report on European Wax Center here, it’s free.

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