Boyd targets $150M quarterly share repurchases while Norfolk resort stays on track for November 2027 opening

• "Our third quarter performance reflects the benefits of our diversified business model, the ongoing strength of our core customer and the appeal of the property investments we've been making across our portfolio." (President, CEO & Director Keith Smith)

• "Company-wide revenues and EBITDAR were down approximately 1% in the third quarter on a reported basis." (President, CEO & Director Smith)

• "After adjusting for these items, company-wide revenue actually grew 2%, while EBITDAR was up 1%, a more accurate reflection of our performance in the third quarter." (President, CEO & Director Smith)

• "In Las Vegas, play from local residents remained strong. However, this trend was offset by increased softness in destination business to Las Vegas, primarily at the Orleans and construction disruption at the Suncoast." (President, CEO & Director Smith)

• "During the third quarter, we returned approximately $180 million to our shareholders through a combination of share repurchases and dividends. We intend to continue targeting share repurchases of $150 million per quarter, supplemented by quarterly dividends." (President, CEO & Director Smith)

• "We ended the quarter with traditional leverage of 2.2x and lease-adjusted leverage of 2.7x." (Executive VP, CFO & Treasurer Josh Hirsberg)

Outlook

• "I think we believe that we could see modest growth next year in Las Vegas Locals EBITDAR. I think it's really dependent on what happens with the destination business." (Executive VP, CFO & Treasurer Hirsberg)

• "What I would say is given the performance in Q3 that the guidance still holds, but I would kind of direct people toward the high end of the ranges that we had previously given for both of those segments, both Online and Managed." (Executive VP, CFO & Treasurer Hirsberg)

• "Our expectation is to kind of have kind of very modest contribution from Suncoast in Q4, just given that room -- those rooms being out of service and then for it to ramp up really kind of coming into Q1 and into Q2 of next year." (Executive VP, CFO & Treasurer Hirsberg)

• "In Virginia, our resort development in Norfolk remains on time and on budget for a November 2027 opening." (President, CEO & Director Smith)

Financial Results

• "During the quarter, we invested $159 million in capital expenditures, bringing our year-to-date capital expenditures to $456 million." (Executive VP, CFO & Treasurer Hirsberg)

• "We now expect to spend approximately $650 million for this year, including $250 million of maintenance capital... $75 million of incremental hotel capital associated with our Orleans hotel remodel... $50 million in growth capital... and finally, $275 million for our casino resort development in Virginia." (Executive VP, CFO & Treasurer Hirsberg)

• "During the third quarter, we paid $15 million in dividends and made $164 million in stock purchases, representing 2 million shares." (Executive VP, CFO & Treasurer Hirsberg)

• "Our actual share count at the end of the third quarter was 71.2 million shares, a 9.4% reduction in our share count since the third quarter of last year." (Executive VP, CFO & Treasurer Hirsberg)

• "We expect to refinance that maturity later this year or in the first half of 2027." (Executive VP, CFO & Treasurer Hirsberg)

Q&A

• Steven Pizzella, Deutsche Bank AG, Research Division: "Given these trends, do you think the Local segment can grow next year?" Executive VP, CFO & Treasurer Hirsberg: "I think we believe that we could see modest growth next year in Las Vegas Locals EBITDAR... dependent on what happens with the destination business."

• Steven Pizzella, Deutsche Bank AG, Research Division: "Can you talk about how you view share repurchases with the stock at current levels?" President, CEO & Director Smith: "We've signaled that we're targeting $150 million per quarter... we do take advantage of dislocations in the stock price."

• Steven Wieczynski, Stifel, Nicolaus & Company, Incorporated, Research Division: "What gives you the conviction that you think that kind of turns around in the fourth quarter?" President, CEO & Director Smith: "The softness in destination was a little stronger... intensified in Q3... we look at having hotel rooms back at the Orleans... that will support us."

• Steven Wieczynski, Stifel, Nicolaus & Company, Incorporated, Research Division: "Is what you told us last quarter still a fair range for [online and managed]?" Executive VP, CFO & Treasurer Hirsberg: "The guidance still holds... direct people toward the high end of the ranges."

• Barry Jonas, Truist Securities, Inc., Research Division: "How much of that is the addition of Cadence Crossing?" Executive VP, CFO & Treasurer Hirsberg: "It's probably like 1/3 of it or so... likely hitting full steam in Q1 of next year."

• Barry Jonas, Truist Securities, Inc., Research Division: "With skill-based games being removed... are you seeing... any upside?" President, CEO & Director Smith: "We would certainly hope that we see some uplift in the business at Valley Forge... it's early and have nothing to report right now."

• David Bain: "Can Locals margins recapture that 2025 level next year?" President, CEO & Director Smith: "We're comfortable thinking about that 50% margin number."

• Benjamin Chaiken, Mizuho Securities USA LLC, Research Division: "What you're solving for?" President, CEO & Director Smith: "The property is... probably 30 years old... it needs to simply be renovated and upgraded for the long-term competitiveness of it."

• Joseph Stauff, Susquehanna Financial Group, LLLP, Research Division: "Promotional levels... impacting likely Orleans..." Executive VP, CFO & Treasurer Hirsberg: "Gold Coast has stabilized and started to improve and the Orleans has just started to stabilize... we're choosing not to be aggressive in terms of promoting just to drive revenue."

• David Katz, Jefferies LLC, Research Division: "Should we presume that you are inclined to be supportive and embrace iGaming... Virginia?" President, CEO & Director Smith: "Yes, properly regulated, properly taxed, legalized. Yes, we are supportive of iGaming."

Sentiment Analysis

• "I think at this point, we've kind of heard that same narrative from you guys for the last -- I think it's been probably the last 2 quarters or so." (Steven Wieczynski, Stifel, Nicolaus & Company, Incorporated, Research Division) Tone slightly negative/pressing, with repeated follow-ups on destination weakness.

• "We're not suggesting that we have any kind of crystal ball." (Executive VP, CFO & Treasurer Hirsberg) Management tone neutral-to-slightly defensive in Q&A, while still expressing operational confidence elsewhere ("we remain disciplined").

• Versus Q2, management language moved from early-quarter continuity (Q2: "the overall trends of the second quarter are continuing into July") to acknowledging Q3 destination softness "intensified" and repeatedly framing outcomes as dependent on destination demand and room availability. (President, CEO & Director Smith)

Quarter-over-Quarter Comparison

• "Company-wide revenues and EBITDAR were down approximately 1%" in Q3 reported results, compared with Q2 commentary that "revenues increased 3% and EBITDA grew 2%" on an adjusted basis tied to FanDuel transaction and pass-through items. (President, CEO & Director Keith Smith)

• Q3 discussion broadened the list of unusual items affecting comparability, including "the permanent closure of Sam's Town Tunica," "the sale of Sam's Town Shreveport," and "higher property taxes at Kansas Star," while Q2 focus leaned more on adjusted comparisons tied to FanDuel and tax pass-through mechanics. (President, CEO & Director Smith)

• Analyst focus in Q3 concentrated heavily on whether destination softness was worsening and when it could stabilize (e.g., "what gives you the conviction"), while Q2 questions more often sought cadence/anniversary expectations and when locals would return to growth. (Steven Wieczynski, Stifel, Nicolaus & Company, Incorporated, Research Division; Daniel Politzer, JPMorgan Chase & Co, Research Division)

Risks and Concerns

• "Increased softness in destination business to Las Vegas" was cited as a key pressure point, with management linking sensitivity to seasonality and room inventory constraints at the Orleans. (President, CEO & Director Smith)

• "Multiple storms on Hawaii during August and September" alongside a "significant increase in Hawaiian airfares" were flagged as headwinds for Downtown Las Vegas visitation patterns. (President, CEO & Director Smith)

• "Softness in the low end of the database" was described as more exposed to "inflationary items, whether it be gas prices or just inflation in general," while management emphasized stronger trends in core and unrated play. (President, CEO & Director Smith)

Final Takeaway

Management described Q3 as a quarter where regional strength and growth in online and managed businesses were offset by intensified Las Vegas destination softness and renovation disruption, while reiterating a capital allocation framework centered on approximately $150 million per quarter of share repurchases, continued property reinvestment, and maintaining leverage at 2.2x as it funds a major development pipeline led by the Norfolk, Virginia resort targeted for a November 2027 opening.

Read the full Earnings Call Transcript

Seeking Alpha's Disclaimer: This article was automatically generated by an AI tool based on content available on the Seeking Alpha website, and has not been curated or reviewed by humans. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of such articles cannot be guaranteed. This article is intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.