Dave & Buster's Entertainment (NASDAQ: PLAY) reported Q2 EPS of $0.59, $0.02 better than the analyst estimate of $0.57. Revenue for the quarter came in at $280.8 million versus the consensus estimate of $281.95 million.

Financial Outlook

We are updating our financial outlook on several key metrics for fiscal 2017, which includes 53 weeks and ends on February 4, 2018:

• Total revenues of $1.160 billion to $1.170 billion
• Comparable store sales increase of 1% to 2% (on a comparable 52-week basis) (vs. 2% to 3% previously)
• 14 new stores (vs. 12 new stores previously)
• Pre-opening expenses of approximately $21 million
• Net income of $109 million to $113 million (vs. $107 million to $111 million previously)
• EBITDA of $270 million to $276 million (compared to $276 million to $282 million previously)
  • Primarily driven by higher pre-opening expenses and the litigation settlement
• Diluted share count of 42.6 million to 42.8 million (vs. 43.2 million to 43.4 million previously) (including the year-to-date impact of ASU 2016-09)
• Effective tax rate of 30.5% to 31% (compared to 34.5% to 35.0% previously)
  • Effective tax rate and net income guidance for full year 2017 includes a $10.1 million reduction in our year-to-date provision for income taxes resulting from the implementation of ASU 2016-09. The requirements of this standard will likely further reduce our effective tax rate depending on future stock option exercises. Our guidance excludes any potential future impacts of ASU 2016-09 on our effective tax rate

GUIDANCE:

Dave & Buster's Entertainment sees FY2018 revenue of $1.16-1.17 billion, versus the consensus of $1.18 billion.

Key highlights from the second quarter 2017 compared to the second quarter 2016 include:

• Total revenues increased 14.9% to $280.8 million from $244.3 million.
• Opened four new stores compared to two new stores.
• Comparable store sales increased 1.1%.
• Net income of $30.4 million, or $0.71 per diluted share, vs. net income of $21.5 million, or $0.50 per diluted share.
• Earnings per diluted share were $0.59 when excluding a favorable impact of $0.16 per diluted share from implementing FASB Accounting Standards Update 2016-09 (“ASU 2016-09”) related to share-based payment transactions, and an unfavorable impact of $0.04 per diluted share related to a litigation settlement expense.
• EBITDA increased 11.5% to $64.0 million from $57.4 million or 15.9% excluding the litigation settlement expense.
• EBITDA margin decreased 70 basis points to 22.8% from 23.5% or increased 20 basis points to 23.7% excluding the litigation settlement expense.
• Repurchased approximately 1.0 million shares for $67.2 million.
• Recognized approximately $6.8 million reduction to our provision for income taxes as a result of the excess tax benefits generated by option exercises in accordance with ASU 2016-09, which was adopted in the first quarter. Implementation of the new standard also increased diluted shares outstanding by approximately 418,000 shares.

For earnings history and earnings-related data on Dave & Buster's Entertainment (PLAY) click here.