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After-Hours News: GameStop and Dave & Buster's Report Earnings

By Daniel Sparks – Updated Apr 2, 2019 at 8:36PM

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One stock fell sharply and the other jumped.

Two earnings reports grabbed headlines during after-hours trading on Tuesday. Video game and consumer electronics retailer GameStop (GME 1.23%) reported fiscal 2019 fourth-quarter results, and dining company Dave & Buster's (PLAY -0.68%) reported its fiscal 2018 fourth-quarter results.

The two stocks are moving in opposite directions in after-hours trading as investors digest the implications of the companies' latest updates.

A chart showing stock price volatility.

Image source: Getty Images.

GameStop earnings

GameStop's fourth-quarter sales from continuing operations (the company completed the sale of its Spring Mobile business in January and included the results in discontinued operations for the period) fell 7.6% year over year to $3.1 billion. Notably, however, the company had one less week in its fourth quarter of fiscal 2018 than it did in the fourth quarter of fiscal 2017, making for an unfair comparison. 

The company's non-GAAP earnings per share were $1.45, well below $1.74 in the year-ago quarter.

"This past year was a pivotal one for GameStop," said GameStop Chairman Dan DeMatteo about the quarter in the company's earnings release, "capped by retail industry veteran George Sherman's appointment as chief executive officer."

Management's outlook was bleak. The company said it expects total fiscal 2019 sales to decline 5% to 10%, with comparable store sales over the same time frame also falling 5% to 10%.

"As we think about 2019 and beyond," said GameStop Chief Operating Officer Rob Lloyd, "we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward."

Shares were down 8.2% in after-hours trading as of 7:30 p.m. EDT.

Dave & Buster's earnings

Dave & Buster's, which offers a combined entertainment and dining experience with activities like arcades, bowling, and areas to watch live sports, saw fourth-quarter revenue rise 8.8% to $331.8 million. Adjusted to exclude a week in the year-ago quarter, sales rose 15.7%. This sales growth was driven by a 2.9% increase in comparable store sales.

The company's earnings per share were $0.75, down from $0.85 in the year-ago quarter. But when excluding a tax adjustment related to the tax reform and an additional week in the year-ago quarter, earnings per share for that period would have been $0.66.

Dave and Buster's CEO Brian Jenkins was pleased with the quarter, noting in the company's fourth-quarter earnings release that it finished the year "on a strong note."

For the full year of fiscal 2019, Dave & Buster's expects revenue between $1.37 billion and $1.4 billion, helped by flat to 1.5% comparable store sales growth and 15 to 16 new locations. This compares to $1.265 billion of revenue in fiscal 2018.

Shares were up 6.6% in after-hours trading as of 7:43 p.m. EDT.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of GameStop and has the following options: short April 2019 $13 calls on GameStop. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.

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Stocks Mentioned

GameStop Stock Quote
$25.60 (1.23%) $0.31
Dave & Busters Entertainment Stock Quote
Dave & Busters Entertainment
$39.21 (-0.68%) $0.27

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