Golden Entertainment (GDEN) 8 Aug 24 2024 Q2 Earnings call transcript
AInvestSaturday, Aug 10, 2024 3:13 pm ET
1min read
GDEN --

Golden Entertainment, a leading casino and tavern operator, held its second quarter 2024 earnings call, providing investors and analysts with valuable insights into the company's performance and future prospects. The call, led by CEO Blake Sartini and CFO Charles Protell, covered a range of topics including revenue, operational performance, and strategic initiatives.

Financial Performance

The company reported revenue of $167 million for the second quarter, with EBITDA standing at $41 million. However, when comparing the results of continuing operations, there were declines in both total property revenue and consolidated EBITDA, reflecting the impact of divesting from certain operations. In Nevada, the company faced declines in revenue and EBITDA, primarily due to lower-tier customer visits and decreased entertainment offerings. Despite these challenges, the STRAT, a hotel-casino in Las Vegas, saw record Q2 hotel revenue with occupancy up 4%.

Strategic Initiatives

Golden Entertainment is focusing on improving midweek occupancy at the STRAT, which currently stands at 64%, missing nearly 18% of occupancy compared to 2019. The company is investing in direct bookings, marketing efforts, and player engagement to address this gap. The recent acquisition of 6 new taverns has also contributed to a 3% increase in revenue for the tavern business.

Operational Challenges

The company has been dealing with labor cost increases due to a new union contract, particularly in Laughlin, where revenue and EBITDA declined. To mitigate these costs, Golden Entertainment has shifted its focus to smaller-scale events, which have shown promising profitability. The company also aims to improve its locals initiatives and bingo program to increase market share in Laughlin.

Investor Relations

During the call, analysts asked about potential growth opportunities, particularly in relation to the closure of two Strip properties and the company's strategy for the 1,000-foot Colorado River frontage parcel in Laughlin. Golden Entertainment expressed optimism about the future potential of this land and its impact on the Laughlin market. The company also reaffirmed its commitment to returning capital to shareholders, with a focus on share repurchases and dividends.

In conclusion, Golden Entertainment's second quarter earnings call revealed a company facing operational challenges, particularly in Laughlin, but also making strategic investments to improve performance and drive growth. The company's focus on midweek occupancy, tavern acquisitions, and cost management initiatives are key areas to watch in the coming quarters. With a strong balance sheet and a clear strategic direction, Golden Entertainment is well-positioned to navigate the evolving casino and tavern landscape.

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