Dave & Buster's with Revenue Decline and Leadership Change in the Third Quarter

The company Dave & Buster's Entertainment recorded a 3.0% decline in revenue and a 7.7% drop in comparable store sales in the third quarter. The announcement of the results and the simultaneous resignation of Chris Morris, the former CEO, led to a 16.5% drop in stock prices. Revenue for the third quarter amounted to $453 million, compared to $466.9 million in the previous year. The net loss significantly increased from $5.2 million or $0.12 per share to $32.7 million or $0.84 per share. Adjusted EBITDA fell from 17.5% in 2023 by 16.3% to $68.3 million, representing 15.1% of revenues. Chris Morris left the company to pursue new career opportunities. Until a new CEO is appointed, board chairman Kevin Sheehan will temporarily assume the role of CEO. Michael Griffith was appointed as the lead independent director and James Chambers as the vice chairman of the board. During the quarter, the company opened three new locations: a Main Event Center in Michigan and two Dave & Buster's locations in West Virginia and Illinois. An additional location in Tennessee followed after the end of the quarter. Additionally, a total of 11 locations were modernized, bringing the number of renovations this year to 44. Looking to extend debt maturities and increase liquidity, Dave & Buster's initiated a refinancing program. This enabled the acquisition of a new term loan of $700 million with a maturity in 2031. Additionally, $200 million of existing term loans were repaid and $440 million of due Senior Notes were redeemed, while the credit line was increased to $650 million, now due in 2029. Dave & Buster's repurchased shares worth $28 million in the third quarter, reducing outstanding shares by 5.1% compared to the end of fiscal year 2023, totaling $88 million throughout the year. The company still has a buyback authorization of $112 million available. The revenue decline was attributed to bad weather, calendar changes due to a 53-week fiscal year 2023, and disruptions from ongoing renovation activities. CFO Darin Harper pointed out growth opportunities in the special events segment, but noted that the quarter was challenging.