Boyd Gaming (BYD -0.93%) reported solid gains on the top and bottom lines for the first quarter as recent acquisitions and efforts to improve operating efficiency paid off.
Boyd's Las Vegas properties benefited from favorable economic trends around the Las Vegas area, and the company's Midwest and South properties performed well despite recent weather challenges.
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Boyd Gaming's first-quarter results: The raw numbers
| Metric | Q1 2019 | Q1 2018 | Year-Over-Year Change |
|---|---|---|---|
| Sales | $827.3 million | $606.1 million | 36.5% |
| Net income | $45.5 million | $41.4 million | 9.9% |
| Adjusted EPS | $0.43 | $0.39 | 10.3% |
Data source: Boyd Gaming.
What happened with Boyd Gaming this quarter?
- The Las Vegas Locals segment reported revenue of $222.9 million compared to $222.2 million in the year-ago quarter. More importantly, the segment's operating margin improved 130 basis points. For that, management credited "a strong regional economy, as well as continued operational efficiencies and marketing refinements."
- Revenue in the Downtown Las Vegas segment increased 4.1% year over year to $63 million. It was a record first quarter for profitability, and operating margin improved 200 basis points for the segment. Management credited the strength of the company's Hawaiian customer base and the long-term favorable traffic trends to the downtown area.
- The Midwest and South segment was responsible for most of the jump in total revenue year over year, as a result of the series of acquisitions management made last year. The recent acquisitions contributed $213 million in revenue and $59.5 million in adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent expense) in the first quarter.
- The Midwest and South segment reported an increase in revenue of 67% year over year, reaching $541.4 million. On a same-store basis, the segment achieved its fourth consecutive quarter of adjusted EBITDAR growth.
What management had to say
Summing up his thoughts on the strong results, CEO Keith Smith was quoted in the release, "This was another great quarter for our Company, as the successful execution of our strategy continues to deliver growth and margin improvement across every segment of our business."
Smith was also pleased with the performance of the recent acquisitions:
We also made substantial progress integrating our recent acquisitions and realizing synergies, positioning us to take advantage of the long-term potential of our new properties. In all, we remain confident in the direction of our Company, and committed to creating long-term value for our shareholders.
Looking forward
Boyd Gaming doesn't provide quarterly guidance, but the company confirmed previous guidance for full-year adjusted EBITDAR of $885 million to $910 million in 2019.
Investors should pay attention to the legalization of sports betting spreading across the country. Boyd Gaming offers sports betting in three states, and management plans to roll this out to other locations as quickly as state regulators will allow it.
