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    WYNN RESORTS (WYNN)

    Q4 2023 Earnings Summary

    Reported on Jan 10, 2025 (After Market Close)
    Pre-Earnings Price$99.83Last close (Feb 7, 2024)
    Post-Earnings Price$104.26Open (Feb 8, 2024)
    Price Change
    $4.43(+4.44%)
    • Wynn's Macau operations are demonstrating strong recovery, with mass table games GGR reaching 117% of Q4 2019 levels, up from 106% in Q3, indicating robust growth beyond pre-pandemic figures.
    • Las Vegas operations continue to perform strongly, with no impact from new competitors, and forward booking indicators for major events like the Super Bowl are very positive, suggesting continued strong performance. , ,
    • Disciplined cost management and operational efficiency have led to higher margins and EBITDA growth, with Macau EBITDA margins above Q4 2019 levels despite reduced OpEx, highlighting effective cost control.
    • Wynn Resorts is exiting most jurisdictions in its interactive (online gaming) business and is reviewing its positions in New York and Michigan, indicating challenges or lack of profitability in this segment.
    • The company faces significant capital expenditures for multiple growth projects, including developments in the UAE and potential projects in New York and Thailand, which could strain resources and impact financial performance.
    • Uncertainty in China's macroeconomic environment presents risks to the sustainability of Macau's recovery, potentially impacting Wynn's future performance in this crucial market.
    1. Macau Mass Market Recovery
      Q: Are all Macau mass segments fully recovered versus 2019?
      A: Craig Billings explained that while the premium mass segment has fully recovered, especially at Wynn Palace, core mass segments are still catching up, particularly at Wynn Macau. He noted that mass table GGR reached 117% of Q4 2019 levels, up from 106% in Q3. There's more work to do at Wynn Macau, but he's proud of the strong performance this quarter.

    2. Macau OpEx and Margins
      Q: Is the current daily OpEx of $2.5M–$2.6M sustainable for 2024?
      A: Management believes the current OpEx is sustainable, highlighting that OpEx was 14% below Q4 2019, with margins 140 basis points higher. They are being disciplined on costs but expect some quarterly variation due to programming and concession commitments. Barring major facility openings, they don't foresee a significant change in OpEx.

    3. Macau Dividends to Parent
      Q: Will the Macau subsidiary resume dividends to the parent soon?
      A: Craig Billings stated that resuming dividends depends on several factors, including upcoming debt maturity, leverage profile, and capital expenditures in Macau. They need to consider their balance sheet and timing of CapEx, but dividends remain a cornerstone of their capital return strategy.

    4. Capital Allocation and Wynn West
      Q: How does Wynn West fit into your growth plans amid other projects?
      A: Craig Billings noted they have multiple avenues for growth, including the land across the street (Wynn West), the golf course, the UAE project, and New York. They are balancing their ability to execute and capital allocation. They will make use of the Las Vegas land bank; it's not a question of "if" but "when".

    5. Las Vegas Group Bookings
      Q: Will group room nights be up year-over-year in 2024?
      A: Yes, forward group booking trends are strong, pacing towards record room nights. The sales and revenue teams are effectively yield-managing the properties. While they don't disclose rates, contracts are multi-year and relate to CPI.

    6. Super Bowl vs. F1 Impact
      Q: How does the Super Bowl impact compare to Formula 1?
      A: The Super Bowl is expected to be more impactful in hotel revenue, similar to F1, but less so in the casino due to more corporate visitors. They have double the front money and credit for the Super Bowl compared to last year. February is shaping up to be jam-packed with events.

    7. Impact of New Competitor
      Q: How has Fountain Blue affected your Las Vegas property?
      A: Craig Billings stated they have not noticed any impact from Fountain Blue. They feel great about their business, and February is shaping up to be busy with events like the Super Bowl and Chinese New Year.

    8. Macau Retail Market Health
      Q: What's the status of Macau's retail market?
      A: Retail sales have been incredibly strong, exceeding 2019 levels. Quarter-over-quarter growth was modest at 10 basis points, possibly reflecting broader China macro effects. Macau appears to have become a substitute for Hong Kong in retail, and the long-term outlook is bright.

    9. Macau Amid China Macro Concerns
      Q: How is Macau's recovery despite China's macroeconomic issues?
      A: Craig Billings acknowledged crosscurrents but highlighted tremendous pent-up demand and the ease of proximity to Macau benefiting visitation. Macau's trajectory seems decoupled from broader China macro trends, similar to 2009, which bodes well for the future.

    10. Interactive Business Strategy
      Q: Any updates on the interactive business and potential monetization?
      A: They announced exiting most jurisdictions, keeping New York and Michigan under review. They are continuing the strategic review and will monetize assets where possible to benefit shareholders.

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