Wynn Las Vegas Expands Buyback Plan Despite Q3 Miss in Gaming Revenue

Wynn Las Vegas has announced a significant increase to its share buyback program, now totaling $1 billion, despite a third-quarter performance that missed analyst expectations. While the gaming stock dipped by 3.45% in extended trading, the primary concern stemmed from a slight shortfall in core gaming revenue; the operator reported third-quarter non-GAAP earnings per share of only 90 cents on revenues of $1.69 billion, failing to meet the anticipated $1.10 per share on $1.73 billion in sales.

The weakness in earnings is primarily attributed to Macau, Wynn’s key market, where revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) slipped on a year-over-year basis.

Performance Breakdown

During July through September, the Wynn Macau casino hotel did perform better than its sister property, but it wasn’t sufficient to balance the overall drop in Wynn’s earnings.

Specific figures include:

Wynn Macau operating revenues surged to $352.0 million for Q3 2024, a $56.9 million increase from $295.0 million in Q3 2023.
Adjusted Property EBITDAR from Wynn Macau climbed to $100.6 million for Q3 2024, up from $77.9 million the prior year.

While the results from Macau posed challenges, analysts suggest that October gross gaming revenue (GGR) figures have shown positive trends, suggesting a potential rebound for Wynn in the current quarter.

Wynn’s Buyback Program Unveiled

As part of a broader industry trend, various gaming companies have launched initiatives to repurchase shares, and Wynn is now following suit. On November 1, the board approved a substantial expansion of its previous buyback strategy, increasing it from $247.7 million in remaining capacity as of September 30 to a full $1 billion. This comes after Wynn utilized $117.7 million to buy back shares in Q3.

CEO Statements:

CEO Craig Billings expressed confidence in the company’s long-term growth, stating, “We are excited about the outlook for the company, and we will continue to focus on driving long-term returns for shareholders.”

Wynn joins competitors like Caesars Entertainment and Las Vegas Sands in their new buyback plans. The timing of Wynn’s buyback activity has proven favorable, with shares trading at an average price of $80.37, well below the closing price of $95.65 recorded on the previous Monday.

Las Vegas Operations Performance

Not only did Macau influence Wynn’s third-quarter figures, but Las Vegas operations also experienced a decline. Reportedly, revenue from Las Vegas saw a drop of $11.8 million, totaling $607.2 million, while adjusted property EBITDAR decreased to $202.7 million from last year’s $219.7 million.

The win percentage for table games at Wynn’s two Las Vegas resorts fell from 26% in the previous year to 23.3% in the latest reporting period, highlighting the ongoing struggles of Strip operators amid challenging year-over-year comparisons.

Conclusion

Despite facing disappointing earnings in the third quarter, Wynn’s bold move to increase its buyback program demonstrates its commitment to shareholder value. The potential positive shifts within the Macau market may signal a resurgence for Wynn as the company navigates fiscal challenges and aims for long-term stability.