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***This call was originally recorded last week on 8/31 before today's plunge in shares of PLAY.

The downside for Dave & Buster’s (PLAY) shares could be “dramatic” according to Hedgeye Restaurants analyst Howard Penney.

Dave and Buster’s was already in trouble with the amusement business rolling over. Now, with food delivery options increasing as well, the downside continues to grow for the restaurant/arcade chain.

“The downside is mid-single digit in same-store sales,” Penney warns in the video above. “The magnitude on that earnings is dramatic - really dramatic. And that’s when this thing really begins to unravel, because it is truly a cyclical business.”

“As much as works for them on the positive side when they have the flow-through for the positive comps, it works against them on the downside,” Penney says. “It’s a high fixed-cost business.”