With softness in locals play and out-of-town guests visiting their casinos less in April, Boyd Gaming’s Las Vegas operations reported a decline in revenue and adjusted earnings in the second quarter compared to the same period in 2022, as comparisons to that strong year are getting more difficult.
Boyd, on the other hand, made year-over-year gains in revenue and adjusted earnings from online gaming and managed operations that boosted overall revenue and net income, the company said.
Boyd said the Las Vegas locals’ segment and customer trends remained solid and operating margins again exceeded 50%, but “revenues and adjusted EBITDAR declined year over year due to difficult comparisons to prior year.”
Boyd’s downtown Las Vegas segment continued to benefit from growth in visitation throughout the area, while second-quarter results were impacted by construction disruption at both the Fremont and Main Street Station.
Boyd President and CEO Keith Smith attributed the decline to “continued softness in retail play that began in the second half of 2022.” In Las Vegas, April accounted for more than 90% of the year-over-year decline in revenue and EBITDAR. That contrasts to a year ago and a temporary surge in business after mask mandates and other COVID restrictions were lifted in Nevada.
Trends for July are looking better for the locals’ market with higher visitation, Smith said.
“We remain confident in the long-term trajectory of our locals’ business, which continues to benefit from a vibrant southern Nevada economy,” Smith said. “Visitation to Las Vegas continues to recover, increasing 10% over the trailing 12 months, while air traffic in the market is at all-time highs.”
Smith said meeting and convention business is 13% below pre-pandemic levels, though up more than 40% over the trailing 12 months.
The locals’ segment reported $230.9 million in revenue during the second quarter, down from $236.4 million a year ago. Adjusted EBITDAR was $118.3 million, down from $125.3 million a year ago.
Downtown Las Vegas reported $52.9 million in revenue, down from $53.8 million a year ago. Adjusted EBITDAR downtown was $19.6 million, down from $22.1 million a year ago.
In the Midwest and South, revenue and adjusted EBITDAR were down year over year, but both grew sequentially over the first quarter as business trends continued to improve. Revenue fell to $518 million from $534 million a year ago.
Boyd’s online segment benefited from strong results at FanDuel’s operations in Ohio and Pennsylvania, as well as the addition of Boyd Interactive. The company also cited continued strength at Sky River Casino in northern California, which has performed ahead of expectations since opening in August 2022.
Online revenue was $85 million during the second quarter, up from $56 million a year ago. Managed business reached $29.1 million during the second quarter, up from $12.3 million a year ago.
Boyd reported second-quarter revenues of $917 million, up from $894.5 million in second quarter 2022. Net income was $192.5 million, or $1.89 per share, for the second quarter, increasing from $146.8 million, or $1.33 per share, for the year-ago period.
Total adjusted EBITDAR, however, fell slightly. It was $351.4 million in the second quarter this year compared to $353.9 million last year. Adjusted earnings for the second quarter were $161.3 million, or $1.58 per share, compared to $163.5 million, or $1.48 per share, in 2022.
“During the second quarter, we once again proved our ability to deliver solid results in a challenging environment, thanks to our effective operating model, strong management teams, and successful growth initiatives,” Smith said. “We maintained our focus on building loyalty among our core customers, while our operating teams continued to effectively manage expenses throughout the business, achieving strong companywide margins consistent with recent quarters. Property operating results were impacted by difficult year-over-year comparisons early in the quarter, while overall results were strengthened by our key growth initiatives, including online gaming and Sky River Casino.”
As part of its ongoing share-repurchase program, the company repurchased $100 million in stock during the second quarter. As of June 30, Boyd had about $533 million remaining under current repurchase authorizations.
Also as of June 30, Boyd had cash on hand of $260.8 million and total debt of $3 billion.
