Dave & Buster's Entertainment (PLAY, Financials) reported a 3.0% revenue reduction in Q3 and a 7.7% comparable store sales drop. As Chris Morris resigns, the corporation changes leadership as well. Shares of the company are down 16.5% following the announcement.
The quarter had $453 million in revenue, up from $466.9 million the year before. Net loss increased from $5.2 million, or $0.12 per share, to $32.7 million, or $0.84 per diluted share. From 17.5% in Q3 2023, adjusted EBITDA declined 16.3% to $68.3 million, 15.1% of sales.
Morris left to seek other prospects after serving as director and chief executive. While the business looks for a permanent successor, Board Chair Kevin Sheehan will act as temporary CEO. Michael Griffith became Lead Independent Director; James Chambers, a board director, was named Vice Chair.
During the quarter the business launched three new sites: a Main Event center in Michigan, two Dave & Buster's outlets in West Virginia and Illinois, and three more sites overall. Another Dave & Buster's facility opened in Tennessee post-quarter. The business also completed 11 remodels, adding 44 to the year total.
Aiming at extending debt maturities and increasing liquidity, a refinancing program helped the corporation get a $700 million term loan due 2031. It paid down $200 million in current term loans, redeemed $440 million in senior notes due 2025, and raised its revolving credit facility to $650 million, therefore extending its maturity to 2029.
In Q3 Dave & Buster bought $28 million worth of shares, bringing its outstanding shares down by 5.1% from the end of fiscal 2023 and totalling $88 million year-to-date. Still within its buyback authorization, the business has $112 million left.
The business blamed bad weather, calendar changes brought on by a 53-week fiscal 2023, and interruptions from continuous retail renovations for the income drop. CFO Darin Harper pointed to areas of growth in the special events category while noting the difficult quarter.
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