Dave & Buster's Entertainment Inc (NASDAQ:PLAY) shares are trading lower Wednesday after the company reported worse-than-expected financial results for the third quarter and announced a CEO transition. Multiple analysts downgraded the stock following the print.

• Q3 Revenue: $453 million, versus analyst estimates of $563.6 million

• Q3 Adjusted EPS: Loss of 45 cents, versus estimates of 90 cents

Total revenue decreased 3% year-over-year and comparable store sales fell 7.7% year-over-year. Dave & Buster's ended the quarter with $8.6 million in cash and $537.4 million of availability under its $650 million revolving credit facility.

The company also announced that CEO Chris Morris resigned to pursue other interests. The board noted that it has been working with a global executive search firm in recent months to assist in identifying the company's next permanent CEO.

Board chair Kevin Sheehan will serve as interim CEO. The board has also appointed director James Chambers as vice chair of the board. During the transition period, director Michael Griffith will temporarily assume the role of lead independent director.

"The Board worked closely with Chris to create our company's strategic direction and has the utmost confidence in this management team and the company's strategy. Overall, I am proud of the team's commitment and dedication to creating memorable experiences for our valued guests each and every day and we are confident our initiatives will lead to growth in same-store sales, revenue, and cash flow in the coming quarters for the benefit of our shareholders," Sheehan said.

Following the company's quarterly results, Truist Securities analyst Jake Bartlett downgraded Dave & Buster's from Buy to Hold and lowered the price target from $56 to $36. William Blair analyst Sharon Zackfia also downgraded Dave & Buster's from Outperform to Market Perform.

PLAY Price Action: Dave & Buster's shares were down 13.7%, trading at $31.75 at the time of writing Wednesday, according to Benzinga Pro.

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