Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wynn Resorts Ltd (WYNN, Financial) announced an increase in share repurchase authorization to $1 billion, demonstrating a commitment to returning capital to shareholders.
- The company reported strong performance in Macau with $263 million in EBITDA, a 3% year-on-year increase, driven by a 10% growth in combined mass table and slot wins.
- Wynn Resorts Ltd (WYNN) received the first land-based gaming license in the UAE, with construction progressing rapidly on the Marjan Island project.
- The Las Vegas operations showed resilience with hotel revenue up 5% and slot handle up 4% despite challenging year-over-year comparisons.
- Encore Boston Harbor reported a 4% increase in EBITDAR, with strong demand across gaming and non-gaming segments.
Negative Points
- Las Vegas faced tough year-over-year comparisons, resulting in flat EBITDA despite a 1% increase in revenue.
- Macau's competitive environment remains intense, impacting market share despite efforts to maximize EBITDA.
- The company is facing increased operational expenses, with OpEx in Macau up 7% year-on-year due to higher payroll and variable costs.
- Wynn Resorts Ltd (WYNN) is experiencing challenges in managing costs related to union payroll increases in Boston.
- The company anticipates significant CapEx commitments in Macau, ranging between $350 million to $425 million through 2025, which could impact cash flow.
Q & A Highlights
Q: Can you outline the required revenue to maintain margins across regions for 2025 and any forecasted cost increases?
A: Craig Billings, CEO, explained that they don't manage to a margin but focus on aggressively managing revenues and costs. In Las Vegas, the high-end consumer remains strong despite tough comps, with minimal wage pressure. In Macau, the focus is on market share versus EBITDA, with stable market share despite a competitive environment.
Q: How do you view the competitive pressures in Macau compared to earlier in the year?
A: Craig Billings noted that the competitive environment in Macau is stable to slightly better than earlier in the year, but it remains very competitive.
Q: Can you provide insights on the gaming revenue decline in Las Vegas and whether it was due to international VIP play or domestic factors?
A: Julie Cameron-Doe, CFO, clarified that the decline was influenced by hold normalization and increased ADRs, which affected the GAAP cost of comped hotel rooms. Craig Billings added that the drop in table games was not indicative of a broader trend.
Q: What is the outlook for group bookings in Las Vegas for Q4 and next year?
A: Brian Gullbrants, COO, stated that group business remains healthy, with 2024 expected to be a record year for room nights. For 2025, they aim to maintain similar group room nights while focusing on rate management.
Q: How do you approach capital allocation, particularly regarding the increased share repurchase authorization?
A: Craig Billings mentioned that share repurchases are done opportunistically when the stock is deemed particularly cheap. They balance liquidity needs between growth capital deployment, debt management, and returning capital to shareholders. Julie Cameron-Doe added that CapEx plans include targeted high-return projects and maintenance across various locations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
