Caesars Entertainment Tuesday reported a decline in revenues and adjusted earnings compared to a record first quarter of 2023, but projected improved results for the rest of the year.
Caesars’s stock closed at $35.82 on Tuesday and was trading lower after the earnings were released.
The company reported net revenue of $2.74 billion, down from $2.83 billion in Q1 2023, a decline of 1.2%. Adjusted earnings were $853 million compared to $958 a year ago, a decline of 9.9%.
Las Vegas reported $1 billion in revenue versus $1.13 billion a year ago, a decline of 4.7%. Regional properties generated $1.36 billion in revenue, a 1.7% decline from $1.38 billion a year ago. Digital had $282 million in revenue, an 18.5% increase over $239 million in 2023.
Adjusted EBITDA came in at $440 million for Las Vegas, down 15.7% from $533 million a year ago. Regional properties reported $433 million, down 3.3% from $448 million a year ago.
Anthony Carano, president and chief operating officer, told analysts that Caesars faced “several transitory issues” during the quarter, including low table hold in Las Vegas, inclement weather at its regional properties, and a loss from the launch of sports betting in North Carolina.
“Despite these transitory issues, several bright spots included record first-quarter occupancy in Las Vegas driven by strong visitation, 23% online sports betting net revenue growth, 54% icasino net gaming revenue growth in our digital segment, and sequential improvements in our operating results in our regional segment in each month during the quarter,” Carano said.
The headwinds in Las Vegas notwithstanding, Carano said Las Vegas adjusted EBITDA of $440 million is the second-best first quarter on record. Occupancy reached 97.6%, a first-quarter record, and drove a record for hotel and food and beverage revenues.
At the regional properties, once Caesars got through six weeks of bad weather, March delivered positive revenue and EBITDA growth, Carano said. Competition in a few markets and construction disruption in New Orleans were partially offset by new temporary facilities in Danville, Virginia, and Columbus, Nebraska.
In 2024, Caesars will finish several construction projects that Carano said will generate strong returns. The permanent facility in Columbus will open May 13. New Orleans construction will finish by Labor Day and a permanent facility in Danville will open by the end of the year.
“Operating results during the first quarter in Las Vegas are a combination of record occupancy, driven by the Super Bowl and international visitation for Chinese New Year, offset by lower-than-expected hold,” said Caesars CEO Tom Reeg. “In our regional segment, results reflect weather-related weakness in January and early February, partially offset by our new property openings. Caesars Digital delivered strong revenue growth, despite lower-than-expected hold in online sports due to unfavorable outcomes for the Super Bowl and March Madness.”
Moving past the first-quarter decline, Reeg said they remain optimistic about improved operating results throughout the balance of the year.
