Getting Paid to PLAY. Initiate at Buy

Research evidence excerpt

Getting Paid to PLAY. Initiate at Buy

18 June 2026

Dave & Buster's

Financial Overview

1Q26 Recap

In 1Q26, Dave & Buster's generated $559 million in total revenue, which was a

miss to the $580 million Bloomberg estimate, and this represented a 1.5% y/y

decline. Entertainment revenue came in at $345 million, against consensus of

$365 million while Food and Beverage revenue finished at $214 million, slightly

beating the $211 million estimate. Adjusted EBITDA of $123 million (down 9.6%

y/y) was a miss against consensus of $137 million, with adjusted EBITDA margin

finishing the quarter at 22.0%, down 194 bps y/y.

For 1Q26, comparable store sales declined 5.4%, which was weaker than the

consensus estimate of -2.5% driven by a tough macro environment particularly

seen in the month of April. However, on its earnings call management noted that

quarter-to-date 2Q26 SSS have improved to down ~4% despite unfavorable

weather. Food and Beverage continues to see success as the revamped menu is

paying off as F&B SSS came in positive (+5%) for the ninth straight month.

Remodeled locations continued to outperform non-remodeled locations by ~700

bps, validating its renovation strategy. PLAY finished the quarter with strong

liquidity of $499 million, which consisted of $20 million cash on hand and $480

million available under its $650 million revolving credit facility. Net lease adjusted

leverage stood at 4.6x, up slightly from 4.5x last quarter.

Looking into FY2026, despite the soft 1Q26 results largely due to unfavorable

macro conditions, management is still “highly confident it will generate positive

comparable store sales growth in the remainder of the year, driving revenue and

adjusted EBITDA growth and more than $100 million in free cash flow for the full