Dave & Buster’s Entertainment Inc (NASDAQ:PLAY) stock rose 7.58% (As on Dec 8, 11:03:25 AM UTC-4, Source: Google Finance) after the company higher than expected results for the third quarter of FY 21. For third quarter sales, the company experienced a 1.1% comp, excluding the seven comp stores located in markets that had vaccine mandates during the quarter. Including all stores, the company experienced a negative 0.4% comp and total growth at 6.2% compared with 2019, reflecting softness due to the Delta variant and associated mask and vaccine mandates. Adjusted EBITDA for the quarter was $68.2 million, or 47% higher than the same period in 2019. This reflects a 21.5% adjusted EBITDA margin, which was nearly 600 basis points higher compared with the same period in 2019. The improved performance was mainly driven by higher amusements mix, leverage on labor due to a more efficient model and lower marketing costs. The company has reported net income of $10.6 million increased $10.1 million in a quarter compared with 2019. The company has ended the quarter with $27 million in cash and zero outstandings on our revolving facility. Total long-term debt was $495 million at the end of the quarter, consisting of the senior secured notes maturing in 2025. The company has invested a total of $23 million in capital additions, net of tenant allowances, and opened one new store during the quarter. In the fourth quarter, the company plans to open one additional new store in Brooklyn, New York, and relocate an existing store to finish the year with four new openings and one new location, which will bring the company to 144 stores by the end of the fiscal year.

Meanwhile, for organic growth, the company plans to broaden the entertainment offering to include more immersive sports viewing experiences, including improvements to the watch environment and the addition of fantasy sports and in sports betting option as permitted. The company sees significant opportunity to drive traffic in the off peak days and dayparts, and the company is evaluating a variety of initiatives to extract more value out of the existing stores. The company plans to amplify the best-in-class arcade with the summer games rollout supported by a significant marketing campaign. To help fuel organic growth, the company plans to accelerate a refresh remodel program that will give our existing stores a fresh look.

PLAY in the third quarter of FY 21 has reported the adjusted earnings per share of 21 cents, beating the analysts’ estimates for the adjusted earnings per share of 12 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $318 million in the third quarter of FY 21, beating the analysts’ estimates for revenue of $317.8 billion.