Boyd Gaming (US:BYD)2023-07-28 03:33Financial Data and Key Metrics Changes - Company-wide revenues reached $917 million, a 2.5% increase year-over-year, while EBITDAR was $351 million, nearly matching last year's performance [20] - Property-level margins were maintained at 42%, consistent with recent quarters, and company-wide margins exceeded 38% [20][5] - The Online segment achieved a 75% EBITDAR gain, generating $13 million in EBITDAR during the quarter [12][20] Business Line Data and Key Metrics Changes - The Las Vegas Locals segment faced a year-over-year decline primarily due to a difficult comparison with last year's surge post-restrictions, with April accounting for most of the decline [6][20] - The Midwest & South segment showed sequential improvement in revenue and EBITDAR since Q4 2022, with operating margins at 39% [11] - The Online segment is projected to generate $55 million to $60 million in EBITDAR for the full year, up from a previous forecast of $50 million [12][20] Market Data and Key Metrics Changes - Visitation to Las Vegas increased nearly 10% over the trailing 12 months, with air traffic at all-time highs [7] - Employment in Southern Nevada rose more than 4% year-over-year, indicating a strong local economy [7] - The Downtown Las Vegas market saw strong pedestrian traffic, with nearly 60% of tourists visiting the area [8] Company Strategy and Development Direction - The company plans to continue its capital return program, with $100 million in share repurchases per quarter and regular dividend distributions [18] - Ongoing expansion projects, including the Treasure Chest Casino, are expected to enhance appeal and contribute to growth starting in the second half of 2024 [16][17] - The company remains disciplined regarding M&A opportunities, focusing on organic growth and capital returns [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory of the Locals business, despite facing challenging year-over-year comparisons [15] - The company does not expect significant changes in customer trends for the remainder of the year, with stability anticipated in core customer play [15] - Management noted that disruptions from ongoing renovations in Downtown Las Vegas will impact Q3 results but expect improvements in Q4 [16] Other Important Information - Capital expenditures for the quarter were $75 million, with a total of $350 million projected for the year [21][22] - The company has a strong balance sheet with total leverage at approximately 2.3x and no near-term debt maturities [23] Q&A Session Summary Question: Insights on the Locals market and customer segments - Management noted that core customers performed well, with stable spend per visit but a slight pullback in visitation [25][26] - Early July trends showed an increase in visitation compared to Q2, indicating a positive shift [27] Question: Changes in promotional behavior from competitors - The promotional environment in the locals market has remained stable, with no significant changes noted [29][30] Question: Stability in Southern markets - Management indicated that the Southern markets have stabilized, with signs of improvement in customer trends and financial performance [35][36] Question: Update on digital guidance and online casino launch - The Online segment's guidance was increased due to strong Q2 performance, with expectations for continued growth [42][45] Question: Impact of construction disruptions in Downtown - Estimated EBITDA impact from disruptions in Downtown is projected to be $2 million to $3 million, with expectations for recovery in Q4 [48] Question: Non-gaming revenue trends - Room revenue in Las Vegas was up, while Downtown faced softness due to construction disruptions [73] Question: Competitive openings and risks - The only significant upcoming opening is the Durango project in Las Vegas, with management confident that customers will return to existing properties after exploring new ones [84]