Boyd Gaming (NYSE:BYD) Corporation reported a 3% increase in company-wide revenues for the third quarter, reaching $903 million, despite a decline in retail play. The revenue growth was driven by an increase in play from core customers, accompanied by a rise in non-gaming revenue. The company also reported a decrease in EBITDAR by 5% to $321 million, reflecting ongoing cost pressures.
Key takeaways from the earnings call:
- Boyd Gaming's revenue growth was propelled by core customers, with a decline in retail play.
- Non-gaming revenue segments such as hotel and food & beverage saw growth of over 4% and nearly 5%, respectively.
- The company expects trends among core and retail customers to remain consistent, with ongoing cost pressures in Q4.
- The online gaming segment is projected to achieve $60-65 million in EBITDAR for the full year.
- The company returned over $1 billion to shareholders since resuming its capital return program two years ago. This move aligns with the InvestingPro Tip that highlights the company's aggressive buyback of shares, a strategy that can often boost shareholder value.
During the earnings call, the company's executives noted that retail customer volumes have remained consistent since Q4 of the previous year. Major expense categories that increased year-over-year were wages, utilities, and property insurance. The company's total leverage at the end of the quarter was 2.3x, with no near-term maturities and ample borrowing capacity.
Boyd Gaming's online segment, Boyd Interactive, is expected to generate $60 million to $65 million in EBITDAR this year. The company also announced plans to open seven new restaurants in Q4 and continue with room remodels as part of its capital investment strategy.
Despite a slight decline in Boyd Gaming's market share in the Las Vegas locals market, the company is seeing growth in daily spend from core customers. The company's executives also discussed plans to maintain a current and relevant product for customers by upgrading hotel rooms and restaurants. The company also expects to announce additional growth projects in the upcoming year.
The company's executives also discussed the performance and trends in customer growth and spending across different regions and demographics. They noted that while there is good growth in guests and visitation, it varies by age group and region. Las Vegas is experiencing growth across all age segments, while other regions show a mixed bag of growth.
The company has been consistent in its $100 million share buyback program but may accelerate repurchases if there are market dislocations. The company aims to maintain a balanced approach and flexibility in using their balance sheet. The call concluded with the company expressing gratitude for the questions and offering to address any follow-ups.
According to InvestingPro data, Boyd Gaming has a market cap of $5510M USD and a P/E ratio of 8.11, indicating that it is trading at a relatively low price relative to its earnings. This aligns with an InvestingPro Tip that notes the company is trading at a low P/E ratio relative to near-term earnings growth. Investors who are interested in more insights like these can find them on InvestingPro, which offers a total of 18 relevant tips for Boyd Gaming.
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