Dave & Buster's: Catching On With A Younger Audience, Expect Market Share Gains To Continue

Dave & Buster’s Entertainment, Inc. (NASDAQ: PLAY) shares may near all-time high territory after a solid first-quarter beat Thursday.

Parsing Through The Quarter Print

The entertainment venue's differentiated concept appeals to all ages and continues to drive market share gains and same-store sales growth in a challenging sector.

Within the Wells Fargo note, analyst Jeff Farmer said Dave & Buster's concept holds a considerable competitive advantage relative to traditional casual dining peers.

“We continue to believe that PLAY represents one of the highest quality unit growth stories in the sector,” said the bank.

Greater brand awareness among a younger audience also helped the company widen the gap between itself and competitors in the first quarter. Same-store sales rose 2.2 percent, but the bright spot was amusement SSS grew 6.4 percent in the quarter, a nod to the younger generation.

Management attributed this widening gap on the company’s advertising focus centering its message around gaming to bring in business and a growing number of mid-teen customers who spend less on food and come to stores earlier in the day.

Management has raised its fiscal year 2017 guidance and authorized a new $100 million share repurchase authorization following the release.

Wells Fargo maintains an Outperform rating on the stock and raised its price target to $78 from $75.

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Image Credit: By Michael Rivera (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons