Boyd Gaming has noted that while it witnessed strong growth from online operations in the third quarter of 2023, overall results were impacted by retail declines and ongoing cost pressures.
Commenting on the financials, President and CEO Keith Smith stated that the results reflected the value of the operator’s “diversified business model” but the wider outcomes have been affected by a “challenging economic environment”.
Publishing its results, Boyd Gaming reported Q3 revenues of $903.2m, up from $877.3m in Q3 2022. Net income stood at $135.2m ($1.34 per share), down from $157m ($1.46 per share) the previous year.
Total adjusted EBITDAR was $320.8m in comparison to $337.7m in Q3 2022, while adjusted earnings were $137.3m ($1.36 per share) in comparison to $159.2m ($1.48 per share) in the same period last year.
Adjusted EBITDAR and margin performances were a reflection of ‘higher labour, utilities and property insurance costs, with company-wide property-level operating margins of 40 per cent’.
“Quarterly results were impacted by declines in play from our retail customers and ongoing cost pressures, both related to the challenging economic environment.”
Boyd Gaming President and CEO Keith Smith
“Our third-quarter results reflect the value of our diversified business model,” commented Smith.
“Continued strength in play from our core customers, strong results from Sky River and online gaming, and growth in our non-gaming business all contributed to a solid performance in the quarter.
“However, quarterly results were impacted by declines in play from our retail customers and ongoing cost pressures, both related to the challenging economic environment.”
Operationally, gaming revenue declined to $641.2m in Q3 (2022: $668m), while room and food & beverage segments rose year-over-year to $48.7m (2022: $46.7m) and $71m (2022: $67.8m) respectively.
Boyd Gaming accredited the figures to core customer play increasing on a sequential and YoY basis, but this was offset by YoY ‘softness in retail play’ despite business volumes from retail customers across all segments remaining consistent since late 2022.
In terms of the operator’s property segments, Las Vegas Locals revenue stood at $221.8m (2022: $225.8m) with an adjusted EBITDAR of $106m (2022: $111.7m).
Downtown Las Vegas revenue came in at $49.5m (2022: $49.5m) with an adjusted EBITDAR of $15.9m (2022: $17.7m).
Midwest & South revenue stood at $513m (2022: $527.5m) with an adjusted EBITDAR of $190.6m (2022: $211.3m).
“We demonstrated the growth potential of our property reinvestment initiative, delivering record quarterly results at the Fremont following its recent expansion project.”
Boyd Gaming President and CEO Keith Smith
Online operations revenue rose to $90.3m (2022: $52.4m) with an adjusted EBITDAR of $11m (2022: $6.4m), benefitting from strong FanDuel results and the addition of Boyd Interactive, which was acquired in November 2022.
Managed and other business revenue grew to $28.5m (2022: $22.1m), driven by management fees from Sky River Casino, which opened in August 2022.
During Q3, as part of its ongoing share repurchase programme, Boyd repurchased $106m in stock.
As of September 30, 2023, the company had approximately $426m remaining under current repurchase authorisations, cash on hand of $269.2m and a total debt of $2.9bn.
Smith continued: “During the quarter we continued to leverage our strong free cash flow to pursue a balanced capital allocation strategy that is creating significant value for our shareholders.
“We demonstrated the growth potential of our property reinvestment initiative, delivering record quarterly results at the Fremont following its recent expansion project. And we remain committed to our capital return program, having returned over $1bn to shareholders in the last two years through our ongoing share repurchases and dividends.”
