Boyd Gaming on Thursday announced first-quarter results that showed declines in revenue, net income, and adjusted earnings compared to 2023, blaming poor weather in the Midwest and South, reduced traffic into downtown Las Vegas, and indirect competition from the newly opened Durango Casino & Resort in the southwest Las Vegas valley.
Boyd reported first-quarter 2024 revenues of $960.5 million versus $964 million in the first quarter of 2023. The company reported net income of $136.5 million or $1.40 per share compared to $199.7 million or $1.93 per share for the year-ago period.
Total adjusted EBITDAR was $330.5 million versus $367.1 million in the first quarter of 2023. Adjusted earnings for were $147.3 million or $1.51 per share compared to $177.4 million, or $1.71 per share, for the same period in 2023.
Boyd President and CEO Keith Smith said that the first quarter faced challenges, especially after setting a record during the first three months of 2023 for its Nevada segment. He pointed to severe winter weather in January that “had a significant impact” for its Midwest and South regional casinos. Downtown Las Vegas was hindered in part by the Super Bowl early in the year, increasing air fares from Hawaii and reducing visitors from the Islands, a trend that has since been reversed. Smith said smaller competitors are offering promotions to compete with Durango that have taken away customers from Boyd properties, namely the Orleans and Gold Coast.
Smith remained optimistic, however, about navigating those challenges and having a strong showing for the rest of 2024. He said revenue growth resumed in February and March in the Midwest and South, with increased play from core customers, stable retail play, and growth in non-gaming revenues. Property margins were 40% during the quarter.
The online segment matched last year’s adjusted EBITDAR as FanDuel continues as the nation’s leading online sports-betting company, Smith said. FanDuel projects it will generate $60 million to $65 million in EBITDAR for the year. Boyd owns 5% of FanDuel.
Boyd also benefited from strong results at Sky River Casino in northern California, which continues to generate year-over-year growth more than 18 months after its opening, Smith said.
In Las Vegas, Smith cited three issues that impacted EBITDAR decline: the record performance a year ago and competitive pressures with the opening of Durango, which he added were in line with expectations of $20 million to $25 million in EBITDAR for the full year.
“Finally, on a same-store basis, the Las Vegas locals market was softer than expected during the quarter,” Smith said. “Despite these issues, the fundamentals of our locals business remain intact. During the quarter, play from our core customers grew each month and when excluding January, play from our core customers increased on a year-over-year basis. Non-gaming revenues also grew in the locals segment in the quarter, even with a substantial number of hotel rooms out of service with our room remodel project at the Gold Coast.”
Boyd remained disciplined in its marketing strategies and focused on operating efficiencies and even with lower revenues had margins of nearly 50% in the Las Vegas locals segment.
As for downtown, Smith said some of the shortfall was due to a tough comparison to a record first quarter of 2023. Much of its strong performance in 2023 was driven by pent-up demand from Hawaiian guests, but now, high air fares have kept more people away than anticipated.
“In addition, gaming revenues in the downtown market declined during the quarter, with overall pedestrian traffic trending lower along Fremont Street,” Smith said. “Looking at more recent trends, we’re encouraged that Hawaiian visitation has improved over the last 30 days, as air fares have declined from elevated levels during the first quarter.”
Smith said they continue to be optimistic about the southern Nevada market, while visitation to Las Vegas continues to grow, led by convention business over the last year. Employment is also strong, increasing 3.3% over the last 12 months, the strongest growth rate of any major metro in the nation.
In the Midwest and South segment, Smith noted encouraging trends, with February and March and retail play coming in nearly flat to the prior year. It’s the best year-over-year performance Boyd has seen in more than two years. Excluding the impact of January weather, margins were 39% and positive trends have continued to start the second quarter.
Boyd repurchased $105 million in shares of its common stock during the first quarter of 2024. It paid a quarterly cash dividend of $0.17 per share on April 15 as previously announced. As of March 31, Boyd Gaming had cash on hand of $283.5 million and total debt of $2.9 billion.
