Boyd Gaming (US:BYD)2023-10-25 01:29Financial Data and Key Metrics Changes - Company-wide revenues grew 3% to $903 million in Q3 2023, with EBITDAR decreasing 5% to $321 million [5][6][22] - Total play from core customers increased by 1%, while retail play declined by 4% year-over-year [5][6] - Property-level operating margins were 40%, and company-wide margins were 36% [22][24] Business Line Data and Key Metrics Changes - In the Las Vegas Locals segment, core customer play increased by 2%, while retail customer play decreased by approximately 4% [6][7] - Non-gaming revenue in the Las Vegas Locals segment grew nearly 6%, driven by hotel and food and beverage revenue increases [7] - The Online segment is projected to achieve $60 million to $65 million in EBITDAR for the full year, benefiting from strong results from FanDuel and Boyd Interactive [14][22] Market Data and Key Metrics Changes - Visitation to Las Vegas is up nearly 8% year-to-date, with convention and meeting business up 30% [11] - Average daily room rates increased by more than 10% across the market this year [11] - Total employment in Southern Nevada rose nearly 5% over the last 12 months, indicating a positive local economic environment [12] Company Strategy and Development Direction - The company remains focused on its core customers and growth initiatives, with ongoing investments in property renovations and expansions [16][17] - A balanced capital allocation program includes a $100 million per quarter share repurchase program and regular dividends [16][24] - The company is optimistic about future growth in Southern Nevada, supported by upcoming events and a robust development pipeline [11][12] Management's Comments on Operating Environment and Future Outlook - Management expects trends among core customers and retail players to remain consistent, with ongoing cost pressures anticipated [8][19] - The opening of new competitors may initially impact visitation, but management believes the market will absorb this new capacity over time [8][52] - Overall, management is optimistic about the stability of the retail customer segment and the performance of core customers [13][19] Other Important Information - Capital expenditures for Q3 were $108 million, with a total projected for the year of approximately $350 million [23] - The company has returned over $1 billion to shareholders through share repurchases and dividends since resuming its capital return program [24] Q&A Session Summary Question: OpEx pressures by geographic segments - Management noted that utility costs significantly impacted Nevada operations, while property taxes and insurance affected the Midwest and South [27][29] Question: Employee turnover due to new openings - Management observed some additional turnover but stated it was not significant and had prepared for the new openings [30][31] Question: Operating expenses and CapEx adjustments - Management indicated limited room to cut operating expenses due to current margins but noted flexibility in capital expenditures [36][37] Question: Promotional environment changes - The promotional environment has remained stable, with no significant changes from competitors [40][41] Question: Retail softness specifics - Retail softness was observed across all segments, with the unrated segment particularly affected by economic impacts [43][45] Question: Long-term capital allocation strategy - Management is focused on upgrading existing properties and will announce further growth projects in the future [46][49] Question: Impact of new competitors on Las Vegas locals - Management expects a low to mid-single-digit EBITDA impact from new competitors, with the market absorbing the new supply over time [52][53] Question: Online segment performance and ROI - The online segment is viewed as a long-term play, with early performance exceeding expectations [61][62] Question: Future capital decisions - Management plans to focus on maintenance capital and improvements to existing facilities, with potential for new growth projects [64][66] Question: Cost environment and leverage points - Management believes a stable expense environment will allow for margin expansion with modest revenue growth [68][70]