Dave & Buster’s (PLAY) Q2 FY2026 Earnings Call: Sales Trends Improve, Cash Flow Strengthens
Source Tradingkey
Key Takeaways
- Dave & Buster’s Entertainment reported Q2 FY2026 revenue of $544.1 million, down from $557.4 million a year earlier, while company-wide same-store sales declined 2.9%.
- Sales trends improved sequentially. Same-store sales were down 5.0% in June and 1.6% in July, with management reporting further improvement during the first five weeks of Q3.
- Adjusted EBITDA fell to $98.9 million from $129.7 million, and the adjusted EBITDA margin contracted to 18.2% from 23.3%. Management attributed part of the decline to $15 million of non-normalized or timing-related items.
- Food and beverage comparable sales increased 7.6%, marking a fifth consecutive quarter of growth. Special-event sales grew for a seventh consecutive quarter.
- Adjusted free cash flow improved by approximately $56 million year over year to positive $19.5 million through Q2, supported by higher operating cash flow and lower capital expenditures.
- The company has identified $15 million of cost savings to be realized over the next 12 months and is targeting at least twice that amount as additional contracts and efficiency measures are addressed.
Core Financial Results
| Metric | Q2 FY2026 | Prior-year period | Change or context |
|---|---|---|---|
| Revenue | $544.1 million | $557.4 million | Down 2.4% |
| Company-wide same-store sales | -2.9% | — | Improved 250 basis points from Q1 |
| Adjusted EBITDA | $98.9 million | $129.7 million | Approximately $31 million lower |
| Adjusted EBITDA margin | 18.2% | 23.3% | Margin compression amid lower same-store sales and specified items |
| GAAP net income (loss) | -$12.5 million | $11.4 million | Shifted to a net loss |
| Diluted EPS | -$0.36 | $0.32 | GAAP basis |
| Adjusted net income (loss) | -$9.5 million | $13.9 million | Adjusted loss of $0.27 per diluted share |
| Adjusted free cash flow through Q2 | $19.5 million | -$36.5 million | Improved by approximately $56 million |
| Cash from operations through Q2 | $160.6 million | $129.8 million | Year-over-year increase |
| Net capital expenditures through Q2 | $127.6 million | $155.4 million | Six months ended August 4, 2026 |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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