Dave & Buster's Entertainment (PLAY) Q1 2027 earnings summary

Executive summary

• Q1 FY 2026 revenue was $559.2 million, down 1.5% year-over-year, with a 5.4% decline in same-store sales due to macroeconomic headwinds and reduced walk-in business.

• Net income was $5.7 million ($0.16 per diluted share), compared to $21.7 million ($0.62 per diluted share) in the prior year; adjusted net income was $7.8 million ($0.22 per diluted share).

• Adjusted EBITDA was $123.2 million, a 9.5% decrease from the prior year, with a 22% margin.

• Management is executing a back-to-basics strategy focused on marketing, F&B, new games, operational excellence, and remodels, with early signs of improvement in Q2 comps.

• Leadership team strengthened with new CMO, CTO, CLO, and a new COO announcement imminent.

Financial highlights

• Entertainment revenues were $345.1 million (61.7% of total), food and beverage revenues were $214.1 million (38.3%).

• Operating income was $46.9 million (8.4% of revenue), down from $63.2 million (11.1%) year-over-year.

• Adjusted free cash flow improved to $25.3 million from negative $58.8 million in Q1 2025.

• Cost of products decreased to $79.8 million (14.3% of revenue), with cost of entertainment at 7.9% and cost of F&B at 24.5%.

• Ended the quarter with $499.1 million in available liquidity.

Outlook and guidance

• Management expects positive comparable store sales growth for the remainder of FY 2026, driving revenue and adjusted EBITDA growth.

• More than $100 million in free cash flow is targeted for the full year.

• Net CapEx for FY 2026 is capped at $200 million, down from $270 million in FY 2025.

• 11 new store openings are planned for FY 2026, with a more selective approach to new unit growth in future years.

• Cash and cash equivalents, operating cash flow, and available borrowings are expected to be sufficient for operating and capital needs over the next twelve months.