Stocks eased lower Wednesday as investors looked forward to the Federal Reserve meeting next week and the upcoming G20 summit. The Dow Jones Industrial Average (^DJI -0.38%) and the S&P 500 (^GSPC -1.03%) closed with small losses. The market was pulled down by the energy sector, which fell on a 4% drop in the price of crude oil.
Today's stock market
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Competition is pressuring Dave & Buster's
Dave & Buster's fiscal first-quarter earnings report was a bust with investors, with the company announcing mixed results and lowering guidance for the year, and shares plummeted 22.4%. Revenue increased 9.5% to $363.6 million and earnings per share grew 8.7% to $1.13. Analysts were expecting the company to earn $1.12 per share on revenue of $371 million.
Comparable-store sales, which had been improving in recent quarters, took a turn for the worse, falling 0.3%. The company blamed the decline on the timing of Easter and spring break, which impacted results more than it had expected, but also conceded that competition and cannibalization of existing store business by new locations were factors.
Looking forward, Dave and Buster's lowered guidance for comparable-store sales from flat to up 1.5% to a range of down 1.5% to up 0.5%. The company also lowered its net income forecast by about 3% at the midpoint.
A 3.3% decline in food and beverage comparable sales and comments in the conference call about competitive headwinds that will increase over the rest of the year contributed to investor concerns today.
Elon Musk says demand is still strong
Tesla held its annual shareholder meeting yesterday, with CEO Elon Musk expressing continued optimism about demand for its vehicles, but investors remain concerned, and the stock fell 3.6%.
In Musk's presentation, he doubled down on the issue of demand, saying, "We get this question a lot and I want to be clear. There is not a demand problem. Absolutely not." He said that quarter-to-date orders for Models S, X, and 3 are outpacing production, with 90% coming from non-reservation holders -- in other words, new customers. The CEO also said that Tesla had a "decent shot at a record quarter on every level," apparently referring to production volumes.
Musk also dropped some tidbits of interest to investors. The purchase of Maxwell Technologies was to acquire technology that Tesla believes will reduce the cost of batteries and the capital required to scale up battery production, and more detail will be provided at a "battery and powertrain investor day" later this year. Musk said the company hopes to unveil its pickup truck this summer, commenting, "I think it's the coolest car I've ever seen."