Dave & Buster's Entertainment Inc (PLAY) has reported a 19.25 percent rise in profit for the quarter ended Jan. 29, 2017. The company has earned $27.37 million, or $0.63 a share in the quarter, compared with $22.95 million, or $0.53 a share for the same period last year. Revenue during the quarter grew 15.36 percent to $270.18 million from $234.22 million in the previous year period. Gross margin for the quarter expanded 58 basis points over the previous year period to 82.27 percent. Total expenses were 83.47 percent of quarterly revenues, down from 83.75 percent for the same period last year. This has led to an improvement of 28 basis points in operating margin to 16.53 percent.
Operating income for the quarter was $44.67 million, compared with $38.06 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $74.46 million compared with $63.90 million in the prior year period. At the same time, adjusted EBITDA margin improved 28 basis points in the quarter to 27.56 percent from 27.28 percent in the last year period.
“For the quarter, Dave & Buster's generated a 3.2% increase in comparable store sales, lapping a 6% increase from the prior year, for an impressive 9.2% growth on a two-year stacked basis. Our comparable store sales growth has now exceeded the competitive casual dining benchmark for 19 straight quarters. We also reached an important milestone during the quarter as full year sales exceeded $1 billion. As proud as we are of this accomplishment, we are even more excited about our growth prospects in the future,” said Steve King, chief executive officer.
Dave & Buster's Entertainment projects revenue to be in the range of $1,155 million to $1,170 million for financial year 2017. For fiscal year 2017, Dave & Buster's Entertainment expects net income to be in the range of $101 million to $105 million.
Working capital remains negative
Working capital of Dave & Buster's Entertainment Inc was negative $102.19 million on Jan. 29, 2017 compared with negative $46.57 million on Jan. 31, 2016. Current ratio was at 0.43 as on Jan. 29, 2017, down from 0.70 on Jan. 31, 2016.
Debt comes down
Dave & Buster's Entertainment Inc has recorded a decline in total debt over the last one year. It stood at $256.63 million as on Jan. 29, 2017, down 22.21 percent or $73.29 million from $329.92 million on Jan. 31, 2016. Total debt was 24.38 percent of total assets as on Jan. 29, 2017, compared with 32.84 percent on Jan. 31, 2016. Debt to equity ratio was at 0.58 as on Jan. 29, 2017, down from 0.95 as on Jan. 31, 2016. Interest coverage ratio improved to 31.64 for the quarter from 15.81 for the same period last year.
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