Dave & Buster’s Stock Slides on Larger Loss Than Expected, CEO Departure

Dave & Buster’s (PLAY) stock started Wednesday morning lower after the company posted a larger loss than expected for the third quarter, and its CEO announced his resignation.

After the bell Tuesday, the restaurant and arcade brand reported $453 million in revenue, and a $32.7 million net loss for the third quarter. Analysts had expected revenue of $462.9 million and a net loss of $16.3 million, according to estimates compiled by Visible Alpha.

After adjusting for one-time expenses like a $15 million debt refinancing charge, Dave and Buster’s $17.5 million adjusted net loss was also larger than the $14.6 million adjusted loss analysts had projected.

CEO Transition Announced

Chief Financial Officer (CFO) Darin Harper said the chain’s third quarter, typically its weakest part of the calendar, was “negatively impacted” by severe weather affecting some regions of the U.S. and remodeling construction slowing sales at other locations.

Along with its earnings report, Dave & Buster’s also announced Tuesday that CEO Chris Morris has resigned to “pursue other interests.” The company said it has been working with a search firm over the “last few months” to identify a successor, and said board chair Kevin Sheehan will serve as interim CEO until the decision is made on a replacement.

Dave & Buster’s shares were down 14.7% Wednesday morning to $31.39, putting them just over 40% below where they started the year.