Every arcade-raised kid has spent a pocketful of tokens on a game that never gets mastered, and that seems to be what Dave & Buster's Entertainment (NASDAQ: PLAY) is doing these days with its business. The chain of big-box entertainment centers that blend casual dining with a high-tech video arcade is struggling, sending its stock within pennies of a three-year low on Wednesday after posting another disappointing financial report.
Negative comps, a decline in net income, and hosing down its full-year guidance for the second time in as many quarters are not sitting well with investors, who are choosing other eateries to satisfy their appetite for restaurant stocks. One potential silver lining is that profitability improved on a per-share basis, but that's a facade created by its aggressive share buybacks.
Dave & Buster's points out that it has returned more than $200 million to investors through the end of the second quarter with stock repurchases and dividends, but the stock chart is getting the last laugh. You can't brag about eating your own cooking when that same appetite would've been so much better at today's lower price points.