Dave Busters Entertainment 2026 Q1 Earnings Misses Targets as Net Income Drops 47.6%

Dave & Buster's Entertainment, Inc. (PLAY) reported its fiscal 2026 Q1 earnings on June 10th, 2025. Revenue fell short of expectations with a 3.5% decrease to $567.70 million, compared to $588.10 million in the previous year. The company maintained its fiscal 2025 guidance, projecting capital expenditures under $220 million. Despite the earnings miss, management expressed optimism about future improvements.

Revenue

In the first quarter of fiscal 2026, Dave & Buster's Entertainment saw a decline in total revenue by 3.5%, amounting to $567.70 million compared to the previous year's figure of $588.10 million. Entertainment revenue contributed $366.60 million, while food and beverage revenue reached $201.10 million, combining to form the total reported revenue.

Earnings/Net Income

Dave & Buster's EPS experienced a significant decline of 38.8%, falling to $0.63 from $1.03 in the same quarter the previous year. Net income also dropped sharply by 47.6% to $21.70 million, down from $41.40 million. The EPS results indicate a challenging financial performance for the quarter.

Price Action

The stock price of Dave & Buster's Entertainment rose by 0.66% during the latest trading day, saw a weekly increase of 19.22%, and experienced a month-to-date surge of 22.96%.

Post-Earnings Price Action Review

The strategy of purchasing PLAY stock when revenues surpass expectations and holding for 30 days has yielded a robust return of 141.56%, significantly outperforming the benchmark. However, this strategy does come with notable risks, as evidenced by a maximum drawdown of -58.17% and a Sharpe ratio of 0.47, indicating moderate risk and returns. This approach suggests that while there can be significant gains, the volatility and potential for loss are also considerable. Investors considering this strategy should weigh these factors carefully.

CEO Commentary

"I am pleased to report that we are making good progress and our operating results significantly improved over the course of the first quarter. While performance in the first quarter was nowhere close to where we want and expect to be, our 'back to basics' strategy is working and is driving a material recovery in our top-line trajectory. The leadership team and our Board are as confident as ever that our current actions will lead to significantly improved revenue, adjusted EBITDA, free cash flow, and shareholder value in the months ahead," said Kevin Sheehan, Interim Chief Executive Officer.

Guidance

The Company reiterates its outlook for fiscal 2025, expecting total capital expenditures to be less than $220 million and pre-opening expenses of approximately $20 million. The Company emphasizes that its financial position remains strong, aiming for improved revenue growth and free cash flow generation. The leadership team remains focused on managing the business effectively to enhance operating performance and shareholder value.

Additional News

In recent developments unrelated to earnings, Dave & Buster's Entertainment announced significant board changes. The company will appoint Allen R. Weiss and Nathaniel J. Lipman as new independent directors, while three current board members, Michael Griffith, Gail Mandel, and Jennifer Storms, will not seek reelection at the upcoming annual shareholders meeting. Additionally, the company expanded its share repurchase program with an additional $100 million authorization, reflecting confidence in its long-term value. Moreover, the company made leadership changes by promoting Cory Hatton to Head of Entertainment Finance, Investor Relations & Treasurer, aiming to bolster the financial strategy and resource allocation towards its entertainment segment.