The first quarter of 2024 has presented Boyd Gaming with a challenging start, as the company reported declines in revenue, net income, and adjusted earnings. This downturn has been attributed to a combination of factors, including adverse weather conditions, reduced traffic, and burgeoning competition.
Financial Fluctuations and Contributing Factors
Boyd Gaming’s financial performance in the first quarter of 2024 saw a slight decrease in revenue to $960.5 million from $964 million in the previous year. Net income also fell to $136.5 million, or $1.40 per share, compared to $199.7 million, or $1.93 per share, in the first quarter of 2023. Adjusted EBITDAR followed suit, dropping to $330.5 million from $367.1 million year-over-year.
The Midwest and South regions experienced significant impacts due to severe winter weather, particularly in January, which disrupted operations. In Las Vegas, the early-year Super Bowl and increased airfares from Hawaii contributed to a decline in visitors, affecting downtown traffic and, consequently, revenue.
Strategic Responses and Optimistic Outlooks
Despite these setbacks, Boyd Gaming’s President and CEO, Keith Smith, remains optimistic. He highlighted that revenue growth resumed in February and March in the Midwest and South, with core customer play, stable retail play, and non-gaming revenues showing improvement. The company’s online segment, led by FanDuel, continues to perform strongly, matching last year’s adjusted EBITDAR.
Smith also pointed out the strong results from Sky River Casino in northern California, which has sustained growth 18 months post-opening. He expressed confidence in the company’s ability to navigate the current challenges, emphasizing the strength of the fundamentals of their local business.
The Competitive Landscape and Future Projections
The opening of the Durango Casino & Resort has introduced new competitive pressures, particularly affecting Boyd properties like the Orleans and Gold Coast. However, Smith noted that these were anticipated and are within the expected impact range on EBITDAR for the full year.
Looking ahead, Boyd Gaming is focusing on maintaining strong operating margins through disciplined operating and marketing strategies. The company’s significant cash flows and robust balance sheet are expected to enable continued capital returns to shareholders through share repurchases and quarterly dividends.
