Red Rock Resorts has reported its financial results for the fourth quarter and the full year of 2022. For Q4, the casino operator posted revenues of $425.5 million, a slight increase of 0.7%; while net revenues for the whole year were $1.66 billion, an increase of 2.8%. The parent company of Station Casinos described the results as “stable and healthy,” as it moves forward with developing its ambitious long-term growth strategy in the Las Vegas Valley.
The locals casino business reported Tuesday its best fourth quarter in history for same-store net revenue and second-best fourth quarter in adjusted cash flow and adjusted cash flow margins, said Stephen Cootey, Red Rock Resorts’ executive vice president and chief financial officer. The results satisfied management, despite an almost 15% drop in net income for Q4, and a very slight decrease of 0.2% in net revenues from Las Vegas operations.
Executives for the company – operator of Red Rock Resort, Green Valley Ranch and several other properties across the Las Vegas Valley – said they were encouraged by “stable and healthy” casino revenue across both low- and high-end spenders, propelled by strong spend per visit and returning regional and out-of-town travelers. President Scott Kreeger said growth is more apparent in other verticals that missed out on that kind of guest during the pandemic.
“When you look at all metrics, whether that’s food and beverage, hotel, ancillary entertainment options like bowling, salon and spa — all of them are up double-digit, and we’re really encouraged by that,” Kreeger told investors, as reported by Las Vegas Review-Journal. “When we look forward to this year, we’re seeing strength in all of those areas, specifically the return of convention guests and also strong catering revenues as we go forward.”
For 2022, Red Rock posted net income of $390.4 million, $3.36 per share, on revenue of $1.66 billion; somewhat down from a net income of $354.8 million on revenue of $1.62 billion in 2021. However, management said the business is well-positioned to continue working on its long-term goal of doubling the real estate portfolio in the valley by the end of the decade. The new 21,000-square-foot Wildfire on Fremont casino will open Friday; and the $750 million Durango Casino & Resort in the southwest valley is on track to open in fall 2023, officials confirmed.
While analysts asked executives where the next major resort might be located – Red Rock Resorts owns several tracts of lands across the valley, including North Las Vegas, Henderson’s Inspirada community and Skye Canyon – Chairman Frank Fertitta III said the choice was dependent on how the Durango property is received. Investors will thus have to wait for the debut of that resort before another project is greenlighted by management.
Rendering for the completed Durango resort
“We want to see continued stability in the Las Vegas market,” Fertitta said, as per the cited source. “Everything we see right now continues to back up our long-term thesis of the macro environment, with population migrating into Las Vegas continuing to grow, limitations on supply, where all the rooftops are being built, which is part of the thesis. Inspirada fits right into that.”
While analysts were encouraged by the development plans, the modest growth reported was below expectations. Carlo Santarelli, analyst with Deutsche Bank, said it forecasted higher marginal growth given locals competitor Boyd Gaming’s recent report of 6.7% sequential net revenue growth. However, Deutsche Bank sees “limited signs of headwinds in the Las Vegas locals market,” and finds the development pipeline “a compelling attribute.”
Red Rock Resorts, traded on the Nasdaq, ended Tuesday at $48.48, up 3.11%. Shares fell 0.68% to $48.15 in after-hours trading.
Original article: https://www.yogonet.com/international/news/2023/02/08/66023-red-rock-resorts-sees-revenue-up-almost-3-in-2022-officials-bullish-on-portfolio-expansion
