Harsh Winter Weather Contributes To ‘Challenging’ Q1 For Boyd Gaming

Boyd Gaming on Thursday reported first quarter revenue of $960.5 million, a slight drop from the same period last year, when the regional casino operator saw revenue of $964 million.

Net income was also down at $136.5 million, a roughly 32% drop from the first quarter last year. The company’s share price dropped about 7.9 % in after-hours trading. Keith Smith, Boyd’s president and CEO, attributed the dropping numbers in part to harsh winter weather in several areas where the company operates casinos — and repeatedly reminded investors on a conference call that the drops came after the business saw “record results” in 2023.

“After a record 2023, the first quarter of 2024 was a challenging start to the year,” Smith said in a statement. “Severe winter weather had a significant impact on our Midwest and South segment early in the quarter while we also experienced increased competitive pressures in the Las Vegas Locals market.”

Performance was also impacted by lower foot traffic on Fremont Street in downtown Las Vegas and high airfares to Las Vegas from Hawaii. “Much of our strong performance in the first quarter of ’23 was driven by pent up demand from our Hawaiian guests,” Smith said during the conference call. “While we expected some normalization from last year’s elevated levels, higher fares during much of the quarter — or much of the quarter of this year — kept more Hawaiians away than we had anticipated.”

FanDuel impact

Visitors from Hawaii make up a significant fraction of guests at Boyd’s three downtown Las Vegas casinos — “73% of the occupied room nights at the [California], 41% of the occupied room nights at Fremont, and 54% of the occupied room nights at Main Street Station” in 2023, according to the company’s annual report. Hawaiian travel appears to be recovering in the past 30 days, thanks to lower airfares, Smith said.

The company reported revenue began to tick up in February and March “in the Midwest & South segment with increased play from core customers, stable retail play and growth in non-gaming revenues.”

Also on the plus side, the company’s online segment saw revenue jump to $146.2 million, up roughly 19% over the first quarter of 2023. Boyd Gaming owns a 5% stake in FanDuel and offers online sports betting under the FanDuel name in several states where it operates casinos.

“This investment is growing in value with the success of FanDuel across the country and remains a valuable strategic and financial asset for our company,” Smith said.

Boyd also offers online casino gaming in New Jersey, Pennsylvania, and Ontario, and licenses its internet gambling technology to other online casino operators. Boyd acquired online gaming company Pala Interactive, since renamed Boyd Interactive, in 2022.

“The business does continue to grow and is ahead of our expectations for where we thought it would be,” Smith said.

Smith also pointed to strong results at the Sky River Casino southeast of Sacramento, which it operates for the Wilton Rancheria Tribe. The tribe is “now finalizing plans” for an expansion of the facility, Smith said on the call.

Boyd is also engaged in about a dozen projects to upgrade food and beverage offerings at its casinos, and nearly finished building a new land-based Treasure Chest Casino in the New Orleans suburbs to replace its aging riverboat casino.

The company paid a quarterly cash dividend of $0.17 per share on April 15 and repurchased $105 million in stock during the first quarter.