Dave & Buster’s edges higher after beating the Street

Arcade games at a Dave and Busters in Hollywood, Calif.
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Arcade games at a Dave and Busters in Hollywood, Calif.

Dave & Buster's Entertainment shares surged 10 percent Wednesday after the company reported better-than-expected quarterly results and raised full-year guidance.

Dave & Buster's, which owns and operates entertainment and dining venues, also announced the repurchase of up to $100 million in common stock.

The Dallas-based company reported earnings of 72 cents per share versus Wall Street consensus estimates of 59 cents a share, according to Thomson Reuters. The company's sales increased nearly 18 percent to $262 million versus an expected $251.42 million. Comparable-store sales increased 3.6 percent, down from a 9.9 percent increase in the same quarter a year earlier.

The company also raised its full-year earnings guidance to $1.85 to $1.97, about 15 cents higher than its previous outlook.

"Our unique entertainment, dining, and sports viewing venues are demonstrating their broad-based appeal despite challenges affecting many of our casual dining peers," CEO Steve King said in a statement. "We are off to a great start in fiscal 2016 with results that surpassed our expectations and are pleased to already be raising our annual outlook."

The company saw the largest non-comparable stores growth for any first quarter in Dave & Buster's history, which reflects the "growing impact of new store development," King said in the statement.

The stock is up more than 10 percent year to date and hit a new 52-week intraday high of $46.60. Shares of Dave & Buster's, which trade under the ticker PLAY, are up nearly 39 percent in the last year.

Analysts at Stifel reiterated their $50 dollar price target, citing the company's seventh-straight beat-and-raise in the first quarter since going public.

"We believe PLAY's ongoing strong momentum (along with names like Top Golf) affirms our bullish view on the local destination dining-and-entertainment business," Stifel analysts said in a note. "For 2016, we are bullish on management's operation tactics."

The tactics Stifel analysts are banking on include menu innovation, with items like the "cave man combo" bacon wrapped shrimp and chicken, and efforts to enhance gaming experience.