Dave & Buster's Entertainment, Inc. (PLAY) has reported an 136.17 percent jump in profit for the quarter ended Oct. 30, 2016. The company has earned $10.76 million, or $0.25 a share in the quarter, compared with $4.55 million, or $0.11 a share for the same period last year.
Revenue during the quarter grew 18.63 percent to $228.66 million from $192.75 million in the previous year period. Gross margin for the quarter expanded 46 basis points over the previous year period to 81.57 percent. Total expenses were 91.83 percent of quarterly revenues, down from 95.09 percent for the same period last year. This has led to an improvement of 326 basis points in operating margin to 8.17 percent.
Operating income for the quarter was $18.67 million, compared with $9.46 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $48.85 million compared with $34.50 million in the prior year period. At the same time, adjusted EBITDA margin improved 347 basis points in the quarter to 21.37 percent from 17.90 percent in the last year period.
"Dave & Buster's delivered exceptional quarterly results and we are pleased to be increasing our annual guidance. Our strength was broad-based as we experienced momentum across the country and throughout the quarter. We generated a 5.9% increase in comparable store sales during the third quarter, lapping an 8.8% increase from the prior year, and 14.7% on a two-year stacked basis. Our comparable store sales growth has now exceeded the competitive casual dining benchmark for 18 straight quarters. Guests responded well to the conclusion of our 'Summer of Games' promotion, along with our subsequent football-related promotions," said Steve King, chief executive officer.
For fiscal year 2016, Dave & Buster's Entertainment, Inc. expects revenue to be in the range of $998 million to $1,003 million. It forecasts net income to be in the range of $86.50 million to $88.50 million for the same period.
Working capital remains negative
Working capital of Dave & Buster's Entertainment, Inc. was negative $124.73 million on Oct. 30, 2016 compared with negative $53.94 million on Nov. 01, 2015. Current ratio was at 0.35 as on Oct. 30, 2016, down from 0.65 on Nov. 01, 2015.
Days sales outstanding went down to 1 days for the quarter compared with 2 days for the same period last year.
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