Q1 2025 Boyd Gaming Corp Earnings Call
Speaker Change: Good afternoon and welcome to the Boyd Gaming First Quarter 2025 Earnings Conference Call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which we are hosting on Thursday, April 24th, 2025.
Speaker Change: During our call today, we will make reference to non-GAAP financial measures for a complete reconciliation of historical non-GAAP to GAAP financial measures. Please refer to our earnings press release, and our form 8-K furnished to the FCC today and both of which are available at investors Dot Boyd gaming Dot com.
Speaker Change: We do not provide a reconciliation of forward looking non-GAAP financial measures due to our inability to project special charges and certain expenses.
Speaker Change: Today's call is being webcast live at Boyd gaming Dot com and will be available for replay in the Investor Relations section of our website. Shortly after completion of this call.
Speaker Change: So with that I would now like to turn the call over to Keith Smith Keith.
Speaker Change: Thanks, David and good afternoon, everyone.
Speaker Change: During the first quarter, our company continued to deliver consistent results growing revenues and EBITDAR on both a company wide and property level basis revenues for the quarter were nearly $1 billion, while EBITDAR was $338 million and we maintain property a little margins of 40% consistent with the prior year.
Speaker Change: During the quarter, our team successfully managed a number of issues, including significantly more weather impacted days in our Midwest and South segment, a comparison issues created by leap year and the benefits of last year's Super Bowl in Las Vegas.
Speaker Change: Including the impact from these factors.
Speaker Change: From our core customers continue to grow on a companywide basis during the first quarter, while retail play was even with the prior year.
Speaker Change: With respect to recent trends in the business, we have not seen any meaningful shift in consumer behavior or spending patterns. Thus far in the second quarter through the first three weeks of April customer trends have remained consistent with March.
Speaker Change: And while we are encouraged by the consistency of the trends in our business. We recognize that the last several weeks have brought an increased level of economic uncertainty.
Speaker Change: However, our management teams have successfully managed through periods of uncertainty before and with the strongest balance sheet in our history and a larger and more diversified business. We remain confident in our ability to manage through the current environment.
Now, let's review our performance by segment, starting with our Las Vegas locals business.
Speaker Change: During the quarter revenues in the local segment were nearly even with the prior year, while EBITDA was down less than 4% primarily attributable to the Orleans.
Speaker Change: The Orleans, while we continue to be impacted by competitive pressures year over year declines in both revenue and EBITDAR narrowed during the quarter.
Speaker Change: And the remainder of our local segment, even with the difficult comparisons created by the leap year last year's Super Bowl revenues for the quarter grew modestly EBITDAR was even with the prior year and operating margins once again exceeded 50%.
Speaker Change: Across the entire local segment play from our core customers grew during the quarter.
Speaker Change: Retail play was consistent with fourth quarter trends.
Speaker Change: And through the first three weeks of April these trends have continued throughout our business.
Speaker Change: Next downtown Las Vegas achieved both revenue and EBITDAR growth during the first quarter.
Speaker Change: We continue to see encouraging customer trends downtown with growth in play from both our core customers and retail customers solid visitation from Hawaii and healthy pedestrian traffic along Fremont Street.
Speaker Change: Additionally, recall that Hawaii visitation to our downtown segment was temporarily impacted in last year's first quarter by higher air fares for Hawaii related to the Super Bowl.
Speaker Change: This created a favorable comparison during the first quarter of this year that will not continue in future quarters.
Speaker Change: Looking ahead, we remain confident in the future of our southern Nevada operations. The long term fundamentals of the southern Nevada economy remains strong with consistent growth in local population employment and tourism.
Speaker Change: Next in the Midwest and South segment, both revenues and EBITDAR grew during the quarter margins were even with the prior year.
Speaker Change: We achieved this performance despite a 28% increase in weather impacted days compared to last year as well as the impact of leap year.
Speaker Change: During the quarter play from our core customers continue to grow while retail play was even with the prior year.
Speaker Change: Importantly, as we move past the impacts as what impacts of weather trends in late March and April were consistent with the last several quarters similar to what we saw at our two Nevada segments.
Speaker Change: Looking ahead to the second quarter keep in mind that we will anniversary the opening of our new treasure chest facility on June 6th.
Speaker Change: Additionally, our belt or a park and built our resort properties were forced to close for several days earlier this month due to flooding on the Ohio River.
Speaker Change: Next our online segment grew EBITDAR by nearly 14% year over year, driven by stable performance from our market access agreements.
Speaker Change: And strong growth from Boyd interactive online gaming business.
Speaker Change: On top of the continued growth we are delivering in our online segment, our 5% equity stake in <unk> represent significant and growing value for our shareholders as <unk> further strengthens its position as the nation's leading online gaming company.
Speaker Change: Finally, our managed another business had yet another strong quarter driven by continued growth in management fees from Sky River Casino.
Speaker Change: And the foundation for future growth at Sky River is being laid with the ongoing expansion activity at this property.
Speaker Change: The first phase of this expansion set for completion early next year, we'll have 400 slots and a 1600 space parking garage, providing much needed additional gaming capacity.
Speaker Change: Second phase will further diversify sky river's offerings with a 300 room hotel, two new food and beverage outlets, a day spa and an entertainment and event center.
Speaker Change: Once fully complete in mid 2027, this expansion will position Sky River to continue growing well into the future strengthening its position as one of northern California's leading gaming entertainment destinations.
So in all our revenue and EBITDAR growth in the first quarter reflected the strength of our diversified business.
Speaker Change: Zillions C of our customer base and the appeal of our properties.
Speaker Change: And we are further enhancing the competitiveness of our amenities as we refresh and update our hotels.
Speaker Change: Valley Forge and Orleans.
Speaker Change: We're also continuing our property wide renovation at the Suncoast.
Speaker Change: We began these improvements last year with the addition of several new amenities and have now begun a complete renovation of the casino and public areas. While disruption from this project has been minimal so far we will be moving into the most impactful phase of the casino floor renovations. This summer.
Speaker Change: Which fortunately is the property slowest time of the year.
Speaker Change: We expect to complete these renovations during the first quarter of next year.
Speaker Change: Yeah.
Speaker Change: Yeah on these property enhancements, we have several projects underway to strengthen the long term growth profile of our business. These.
Speaker Change: These projects are located in markets with long term growth potential each providing the opportunity for a strong return on investment for our company.
Speaker Change: And our part of our $100 million in annual recurring growth capital.
Speaker Change: In Missouri work is progressing at our meeting and Convention center expansion at <unk> St. Charles.
Speaker Change: The vast majority of pre bookings for this new space are from entirely new customers significantly expanding the property's reach and appeal when we open our expansion this fall.
Speaker Change: And earlier this month, we broke ground on cadence crossing casino.
Speaker Change: Jason to the Master plan community of cadence in the southeast part of Las Vegas Valley.
Speaker Change: When it opens in mid 2026, this new property will replace our existing jokers Wild casino with a modern gaming entertainment facility designed to appeal to the thousands of new residents throughout the cadence community.
Speaker Change: And this property is designed for continued growth with future plans for hotel additional casino space and more non gaming amenities.
Speaker Change: As we near the completion of these investments we are developing plans for the next phase of projects to strengthen our growth pile growth profile.
Speaker Change: One example is our plan to replace our 30 year old Paradise Riverboat Casino in Illinois, with a modern new entertainment facility.
Speaker Change: We're in the design phase of this project and expect to seek regulatory approval and begin construction in the next 12 months.
Speaker Change: And then Virginia construction is now underway and our $750 million resort project in Norfolk.
Speaker Change: This project will further diversify our portfolio by expanding our presence into one of the largest underserved gaming markets in the mid Atlantic region.
Speaker Change: Scheduled for completion in late 2027. This best in market resort will include a casino with 500 slots and 50 table games, a 200 room hotel eight food and beverage outlets live entertainment and a 45000 square foot outdoor amenity deck.
Speaker Change: And as part of this project, we plan to open a modest transitional casino in November of this year.
Speaker Change: Our development site is located near downtown Norfolk with convenient Interstate access importantly, it will be the most convenient gaming destination for a significant number of the one 8 million residents of the Hampton roads Metropolitan area.
Speaker Change: Also be the closest gaming resort to Virginia Beach, a tourism destination that attracts nearly 15 million visitors each year and as the state's largest city.
Speaker Change: Given all of these dynamics, we are excited about the long term potential of our north project.
Speaker Change: While our capital investment program is an important part of our strategy to create long term shareholder value. We also remain committed to returning capital to our shareholders.
Speaker Change: During the first quarter, we repurchased $328 million in stock and paid $15 million in dividends.
Speaker Change: While we remain committed to $100 million per quarter in share repurchases with the current economic uncertainty, we will be much more conservative and buybacks above that level as we balance our capital expenditure program and maintaining a strong balance sheet with returning capital to our shareholders.
Speaker Change: So in all this was a good start to the year for our company as we continued to deliver year over year growth despite challenges from weather and the calendar during the quarter.
Speaker Change: And we are encouraged that customer trends have held steady so far in April we remain.
Speaker Change: Confident in the long term prospects of our company and our strategy to create value for our shareholders.
Speaker Change: Before turning the call over to Josh I wanted to take a pause.
Speaker Change: Personally thank our team members for continued contributions to our company's success.
Josh: Their hard work and dedication to providing memorable service keeps our guests coming back and we are grateful for all that they do for our company.
Speaker Change: Thank you for your time today.
Josh: Now, let's turn the call over to Josh.
Josh: Thanks, Keith and good afternoon, everyone.
Josh: Our first quarter reflected a continuation of the positive operating and customer trends over the last several quarters. Despite the weather impacts on our Midwest and South segment and the leap year comparison.
Josh: And while acknowledging that the recent past is not a guarantee of future performance, particularly in light of the current environment Custer.
Josh: Customer trends from the first quarter are continuing into the first several weeks of April.
Josh: Now some additional points on the quarter.
Josh: Tax pass through amount for online segment was $130 million during the quarter compared to $116 million in the year ago period.
Josh: Excluding the tax pass through them out companywide margins for the first quarter. This year would have been 520 basis points above the margin we reported.
Josh: Beginning with this quarter, we are recording Noncontrolling interest activity related to our Virginia development.
Josh: This amount reflects expenses incurred by the tribe related to the Virginia development.
Josh: In terms of capital expenditures, we invested $127 million in capital during the first quarter.
Josh: Continue to project total capital expenditures for the full year of 600 million to $650 million.
Josh: As a reminder, these capital plans include approximately $250 million of maintenance capital.
Josh: <unk> million dollars related to our hotel room projects at IP Valley Forge and the Orleans.
Josh: $100 million in growth capital for the meeting and convention space at them Aerostar, St Charles and the new cadence crossing development here in Las Vegas.
Josh: And then finally, a $150 million to 200 million for our casino development Danielle.
Josh: Given our current capital plans in today's environment, we have taken steps to mitigate potential tariff impacts on these projects.
Josh: We have also identified capital projects they can be deferred if needed.
Josh: On the operating side of the business. We have also taken steps to mitigate the potential impact of tariffs on our operating expenses.
Josh: Moving next to our capital return program, we paid our regular quarterly dividend of <unk> 17 per share during the first quarter.
Josh: And as previously announced we increased our quarterly dividend of <unk> 18 per share beginning with our April distribution.
Josh: Also during the quarter, we repurchased $328 million in stock acquiring $4 5 million shares.
Josh: As of the end of the quarter, we had $312 million remaining under our current repurchase authorizations.
Josh: The actual number of shares outstanding at quarter, 81, 9 million shares.
Josh: Since we began our program to return capital to shareholders in October of 2021.
Josh: Earned over $2 $2 billion in the form of share repurchases and dividends and reduced our share count by more than 27%.
Josh: As Keith noted, we remain committed to repurchasing $100 million in shares per quarter. We.
Josh: We will balance this commitment with our capital expenditure plans and ensuring we retain a strong balance sheet.
Josh: Given the current environment, you should expect us to be more conservative and repurchasing amounts in excess of our $100 million per quarter commitment.
Josh: We ended the quarter with total leverage of approximately two eight times and lease adjusted leverage of about three two times, we have no near term maturities robust free cash flow and ample borrowing capacity.
Josh: In conclusion, our company remains in excellent financial condition to continue executing our strategy.
I'd now like to turn call over to open up for questions.
Speaker Change: Thank you Josh we will now begin our question and answer session.
Speaker Change: I would like to ask a question. Please press Star then one on your Touchtone phone, you'll hear a prompt that your hand has been raised.
Speaker Change: If you wish to withdraw your request. Please press Star then two.
Speaker Change: If youre using a speakerphone. Please feed your handset when asking your question.
Speaker Change: We will pause for a moment, while we compile our list of questionnaires.
Speaker Change: First question comes from Carlo Santarelli of Deutsche Bank Carlo. Please go ahead.
Carlo Santarelli: Hey, guys. Thank you.
Speaker Change: You talked a little bit about it.
Speaker Change: In your remarks as it related to some plans at Paradise, you guys have had obviously great success at treasure chest.
Speaker Change: Youre talking about kind of Paradise, you have several other kind of multi level boats.
Speaker Change: Where the returns on these types of projects have been very good how do you kind of think about some of the other assets that are similar in nature, where that opportunity to kind of make a land base transition exists over the next few years.
Speaker Change: Just given kind of the success that's been seen not only by you, but by others in similar moves.
Speaker Change: Sure. Thanks for the question Carlo So it falls in the category of we have a list of these types of development projects, we prioritize that list based on where we believe the highest returns are.
Speaker Change: Are you kind of focused on the ones that provide the highest returns those are the only ones. We're talking about but trust me. There is a long list of additional projects that can continue to benefit the company and provide a good return on investment and we do have a number of three.
Speaker Change: Three storey riverboats remaining that are older in nature that over the course of time, we will we will have the opportunity to upgrade.
Speaker Change: The only thing I would add to that Carlo the only thing I would add to that Carlo as treasure chest has exceeded all of our expectations in terms of that investment.
Speaker Change: Everyone have a keith.
Speaker Change: I would say that from the perspective of Paradise.
Speaker Change: Which is the next one up.
Speaker Change: It is a different dynamic in terms of the population density and the competitive landscape. So we wouldn't expect the same kind of return that we got from treasure chest to apply to Paradise. We expect a return that is that warrants the investment, but certainly potentially not at the level of treasure chest just wanted to clarify that.
Speaker Change: Yes, understood and then just as a follow up.
Speaker Change: As you guys kind of.
Speaker Change: Look at what you've seen in April to date and kind of when you take the entirety of the first quarter and acknowledging there was several moving parts and several kind of difficult to comp and understand dynamics across not only the Midwest and south but also in Las Vegas.
Speaker Change: When you when you talk about kind of the core customer.
Speaker Change: Remaining flat to up across most markets and retail kind of oscillating a little bit amongst the markets.
Speaker Change: How would you more or less categorize the outlook for each of those segments and do you do you see anything, especially as it relates to the core changing in any of the markets.
Speaker Change: Yes.
Speaker Change: As we try and.
Speaker Change: As we can look through the noise that occurred during the first quarter, whether it be the Super Bowl here in Las Vegas or significantly more weather leap year, we see our core customer frankly continuing to grow.
Speaker Change: And continuing to show up and participate with us and so that is a strength of ours and has been since we came out of Covid as we look at the retail customer and we look at the unrated side of the business. They also continue to perform on a very consistent basis.
Speaker Change: And once again, when you sort through the noise.
Speaker Change: You see you see very positive trends there they are consistent.
Speaker Change: Going a little bit and so we feel very good about the direction now having said that we have three weeks of April under our belt and we feel good about those three weeks, but it is three weeks, but that's.
Speaker Change: Yes.
Speaker Change: First is I guess I can describe it.
Thank you Keith that's helpful. Thanks, guys.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Shaun Kelly with Bank of America, Sean. Please go ahead.
Shaun Kelly: Hi, good afternoon, everybody I'm, sorry can you hear me okay.
Speaker Change: Yes.
Speaker Change: Okay, great yes.
Speaker Change: Just wondering Keith can you.
Speaker Change: Maybe just wanted to talk about the buyback strategy at a high level, if we could just.
Speaker Change: Dig in on just the timing of the of the large buy in Q1, Josh you made some detailed remarks about not expecting that to continue but what was the opportunity you saw there or the sort of catalysts just given how much that actually is at this point and then.
Speaker Change: What would be the criteria I mean again I get the uncertainty, but this is also the opportunity to possibly lean in a little bit and utilize the balance sheet capacity that you have so just help us think about those different dimensions.
Speaker Change: Yes.
Speaker Change: I think as you think about where we're at today and going forward.
Speaker Change: One of our priorities is maintaining a strong balance sheet and so we will kind of balance the rest of our capital allocation program investing in our properties and returning capital to our shareholders with ensuring that we don't go so far as to impact our balance sheet in a negative fashion. So.
Speaker Change: What's going to allow leverage to float up and float down based on our ability to see it coming back down.
Speaker Change: No.
Speaker Change: The current environment is a little less certain than it was maybe a month ago and so we're just going to be cautious as both Josh and I said in our prepared remarks.
Speaker Change: As we balance all of that.
Speaker Change: As we think about what happened in the first quarter I would just say look you saw us buy in Q3 and Q4 over $200 million.
Speaker Change: Feel very good about the direction of the business overall felt very good about it coming into Q1.
Speaker Change: And we took advantage of kind of where we thought it was a good stock price.
Speaker Change: Under market and.
Certainly have plenty of capacity to be able to do that and so that was the result, but once again going forward. We just want to make sure that we can see around the corner there.
Speaker Change: Before we buy too much more than a $100 million a quarter.
Speaker Change: Perfect. Thanks, and just as a brief follow up.
Speaker Change: Josh you also mentioned a little bit about the.
Speaker Change: Capital projects and some of the steps you've taken to mitigate potential risks around tariffs I'm. Just wondering could you elaborate a little bit more there and specifically on Norfolk, If you could give us a sense of how much of the project is bought out at this point I know, it's still relatively early and kind of how those conversations have maybe trended because we are seeing capital projects being.
Speaker Change: Delayed or in some cases fully canceled just given the uncertainty in the environment and I. Appreciate that's probably too extreme but just how you are kind of working around what is definitely a dynamic environment.
Speaker Change: Yes so.
Speaker Change: I would say we were our first step was to go through the project list and figure out what we might be willing to defer given what you know.
Speaker Change: Kind of the.
Speaker Change: Yeah.
Speaker Change: I would call it the anxiety in the marketplace when we but we have to remember that in our business today, we're not really seeing anything differently.
Speaker Change: And I would say just before I get into some details on how we thought about the capital projects that you have to also remember that were coming from this from a position of strength probably the most the strongest position our company has ever been in.
Speaker Change: And this type of environment before so we feel very comfortable about kind of where we're sitting so we have a very low levered balance sheet. We have we're a much larger company <unk>.
Speaker Change: <unk>.
Speaker Change: And so again just to reiterate I think we approach these kind of decisions from a totally different perspective than maybe we had to in the past.
Speaker Change: In terms of.
Speaker Change: Kind of after evaluating kind of what projects, we thought might be considered for deferral, we'd looked at each one of the capital projects and really evaluated where they were in their development cycle as well as well as how much.
Speaker Change: Where they were in the procurement cycle.
Speaker Change: And then from there we identified.
Speaker Change: The sources of what was coming from outside the country, what was coming in domestically and we evaluated whether we had the opportunity to shift.
Speaker Change: Some of the external stuff being brought in that were subject potentially to tariffs to other vendors to other products to other sourcing methods at the end of the day when we got through that.
Speaker Change: Our assist quite honestly, we felt very comfortable with the risk relative to our existing budget. We don't feel like what we know today that any of our budgets would have to change.
Speaker Change: And I think with respect to Virginia in particular, the temporary areas.
Speaker Change: A very small development effort.
Speaker Change: Remember, we don't expect much to come up from the from an economic perspective from the temporary casino in terms of the permanent casino thats been developed over a much longer period of time. So we have a lot more flexibility in terms of timing purchasing and all of that other stuff, we have repurchased some items to avoid the risk of <unk>.
Speaker Change: So we have kind of ensure that some of the longer lead items, we're taking care of.
Speaker Change: Some people talk a lot about steel and those factors and actually the steel for Virginia would be.
Speaker Change: Produced are sourced from domestic products domestic sources here. So that takes a lot of real risk out of that project.
Hopefully that gives you a sense of kind of.
Shaun Kelly: Going into too much detail. It gives you enough detail to understand kind of the diligence we've been through and Sean just to clarify what Josh was saying he is not saying that we won't see cost increases we have identified those areas that we will see cost increases or we expect to see cost increases.
Shaun Kelly: Cause of either existing or possibly new tariffs, but as we've calculated them and looked at our budgets were comfortable that they're not going to hinder our ability to go forward and that we can handle those increased costs whatever they may be.
Shaun Kelly: And the budget yet within the budgets that we have so it's not going to cause us to really change of course.
Speaker Change: Really encouraging thank you. Thank you all.
Shaun Kelly: Yes.
Shaun Kelly: Thank you.
Shaun Kelly: Our next question comes from David Katz of Jefferies. David. Please go ahead.
Shaun Kelly: Afternoon.
Speaker Change: I'd love to just go out them.
Shaun Kelly: Out on the edge a little bit here.
Given what youre seeing in your business.
Shaun Kelly: Given your capital position.
Shaun Kelly: And given what looks like pretty solid execution.
Shaun Kelly: What would be the boundaries of any M&A or underwriting potential.
Shaun Kelly: And.
Shaun Kelly: Is that a possibility in this environment.
Shaun Kelly: Well look we.
Shaun Kelly: Can we talk about this environment.
Shaun Kelly: First as I can tell we've been in this environment for three may be going on for weeks and so it doesn't really change our view of M&A.
Shaun Kelly: We've always had an appetite for M&A.
Shaun Kelly: Just about what we do.
Shaun Kelly: The type of asset we buy the price we are willing to pay and.
Shaun Kelly: It's got to be strategic it has to be in a market that is.
Shaun Kelly: Generally a market we're not in.
Shaun Kelly: And something that we feel can move the company and move the needle for the company and so.
Shaun Kelly: Yes.
Shaun Kelly: Interested in M&A today, we were interested in M&A last month, we're interested in M&A last year, but.
Shaun Kelly: And I've said this over and over and over again, we're very cautious we're very disciplined we have I think a very good track record of doing these things in.
Shaun Kelly: Last three weeks of <unk>.
Shaun Kelly: Volatility maybe.
Shaun Kelly: Maybe three weeks on a day to the data was started.
Has it changed our view.
Shaun Kelly: Understood Thanks for repeating yourself.
Speaker Change: Separately speaking if were.
Shaun Kelly: Looking hard at your numbers and when we talk about seeing things.
Speaker Change: Can we just spend a second on.
Speaker Change: Is it number of visits is it spend per visit is it all of the above is it some element of new customer inflow.
Speaker Change: A little specificity wood and in the environment quote unquote would help.
Speaker Change: Yeah, So I think with respect to the core customer.
Speaker Change: That growth is coming largely from a little bit of both of the items, you mentioned, a little bit more in frequency and a little bit more in terms of budget.
Speaker Change: Maybe a little bit maybe leaning a little bit more to budget, but not too heavily into it.
Speaker Change: As you get into the retail piece I'd have to kind of breakthrough retail into two components unrated, which we have limited visibility and because they don't have a card, but we look overall at the volume of unrated is growing and obviously, we can't tell whether that's driven by either frequency or spend or a combination.
Speaker Change: Lower segments of the database I would say it largely follows the core customer, it's a little bit of a frequency and a little bit more spend on the.
On the budget side of things.
Speaker Change: Okay. Thank you nice quarter.
Speaker Change: Thank you.
Thank you.
Steve: Our next question comes from CS, Steve within <unk> of Stifel. Steve. Please go ahead.
Steve: Yeah, Hey, guys good afternoon.
Steve: This might sound like a repeat of a couple of other questions, but I'm going to ask it a little bit different a little bit differently I hope hopefully I am.
Steve: So as we think about general trends being stable through the first three weeks of April it seems like even that that unrated play segment has been pretty steady.
Speaker Change: As well, but we're now starting to hear some of your competitors out there.
Speaker Change: I've started to talk about seeing a little bit of softness in unrated and even in the retail segments. So I guess the question is.
Speaker Change: That segment seems pretty stable for you, but have you seen any.
Speaker Change: Any change in spend across the non gaming amenities and your assets, whether thats lower spend in food and beverage or hotel or et cetera, or is that is stable as well I'm. Just I mean, just trying to figure out if your core customer is still coming to the properties and gambling, but maybe deferring spending across the non gaming assets and hope that makes sense.
Speaker Change: And so.
Speaker Change: When we look at both F&B and hotel, it's up on a cash basis.
Speaker Change: And the only reason it would be down is largely Las Vegas related to the Super Bowl, which drove a lot of.
Speaker Change: Room, now room and F&B business.
Speaker Change: But.
Speaker Change: When we look at the segments and when you look at the individual components.
Speaker Change: I'd say it largely mirrors, what we're seeing on the kind of what we talked about on the on the customer side of things.
Speaker Change: Okay got you that makes sense and then as we.
Speaker Change: You kind of look around the country.
Speaker Change: Have you seen any of your competitors start to get more aggressive with the promotional side of things in.
In order to try and combat any weakness that may be out there at this point.
Speaker Change: So look I think as we look across the country, we havent seen any significant changes in the overall promotional environment like any other month or was it like any other quarter.
Speaker Change: Some players get a little more aggressive for a month or so but there is no structural change nobody's gotten extremely aggressive.
Speaker Change: So yes, nothing nothing to talk about.
Speaker Change: Yeah, Okay, great. Thanks, guys appreciate it.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Jordan Bender of citizen Jordan. Please go ahead.
Jordan Bender: Hey, everyone. Good afternoon, you went through a period of weakness within Dod Hawaii travel, which you spoke to in the prepared remarks curious if you could help us just.
Jordan Bender: Curious if you could frame where you stand in terms of our Hawaii travel whether that's in relation to 2019 or similar levels around 'twenty, one 'twenty tail. Thank you.
Jordan Bender: Sure Jordan I don't have those comparison points handy.
Jordan Bender: The decline we actually saw in the first quarter of last year was specifically related to a spike in air fares around Super Bowl and as that Spike normalized in the second quarter of last year, we saw the business come back and so when we the first quarter. This year was what I would call a normal quarter the business.
Jordan Bender: Peru, but it's up significantly over the first quarter of last year, but it's just a comparison issue because of that.
Speaker Change: I don't know, how we compare to overall visitation from our Hawaiian guests vis vis 2019 or 2021, just don't have that data.
Speaker Change: Understood. Thank you and then just on the follow up Josh do you have any impact on the weather in the quarter.
Speaker Change: In terms of the dollar amount is that what you're asking.
Speaker Change: Yeah, any dollar amount related to EBITDA or EBITDAR in the quarter from weather.
Speaker Change: Yeah. So.
Speaker Change: I think we.
Speaker Change: We estimated that to be about $5 million.
Speaker Change: For for the weather impact.
Speaker Change: Great. Thank you very much.
Speaker Change: Sure.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Brian <unk> of Barclays. Brent. Please go ahead.
Speaker Change: Thanks for that and thanks for the question.
Speaker Change: So on the local segment.
Speaker Change: Keith.
Speaker Change: You talked about the.
Speaker Change: The sort of market share losses narrowing in the first quarter.
Speaker Change:
Speaker Change: Can you can you maybe talk about how that competitive landscape in that locals market for you has has evolved I know this has been an ongoing thing and it's been getting better but.
Speaker Change: And I can assume that those competitors aren't necessarily sitting still and they are evolving as well and so whats kind of the outlook for the balance of the year in terms of how you are lapping those comparisons and how you kind of expect you can continue to narrow it from here.
Speaker Change: Yes couple of comments I think look with respect to the overall locals market.
Speaker Change: If you look at the numbers that.
Speaker Change: We're out there the locals market basically shrunk a little bit.
Speaker Change: For the recent couple of months, maybe a half a percent.
Speaker Change: When you look at our performance and you strip out the Orleans, we actually outperformed we did better than the overall locals market. So without the Orleans the business is performing better than the overall market and that's been consistent for the last several quarters.
Speaker Change: The Orleans really is the one who's face competitive competition, we talked about the Orleans Gulf Coast Gulf Coast has been performing better in recent quarters.
Speaker Change: And.
Speaker Change: It's not there's nothing new going on it is still a couple of properties in the neighborhood of the Orleans, they're not doing anything really new or different.
Speaker Change: We're beginning to cycle through the worst of that.
Speaker Change: As I said in my prepared remarks, because of the gap at the Orleans has narrowed in the first quarter.
Speaker Change: And kind of given today's environment, we're really not in a position to comment.
Speaker Change: A comment about how we see the rest of the year.
Speaker Change: Rolling out.
Speaker Change: Fair enough I do have another locals question and again not looking for any sort of guidance, but more of like a historical look back.
Speaker Change: The common sense that we would suggest that the locals.
Speaker Change: It's clear linkage to.
Speaker Change: Las Vegas strip.
Speaker Change: Given the worker.
Speaker Change: There were folks that that frequent those youre casinos.
Speaker Change: Wages et cetera.
Speaker Change: The historical correlation can you can you talk about that maybe in prior recessions and if you think that that would be less so.
Speaker Change: In today's market given.
Speaker Change: How this how the locals market has evolved over the last 10 or 15 years.
Speaker Change: Yes look the benefit.
Speaker Change: The greater Las Vegas community is that its done a wonderful job of diversifying its economy and so their tremendous more businesses here today. They are diversified it's not just all about gaming and so our customers well historically.
Speaker Change: A large portion of them, maybe we're dependent on tourism business Theres certainly today. The world is different is we have much more diversified employee base here in the city.
Speaker Change: No.
Speaker Change: I don't think you can look back at prior recessions and draw anything from that.
Speaker Change: In terms of what may happen today because.
Speaker Change: The economy here in southern Nevada is just different than it was 10 or 15 years ago.
Speaker Change: Okay, great. Thanks, everyone.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Ben Chaiken of Mizuho Ben. Please go ahead.
Ben Chaiken: Hey, Thanks for taking my questions understanding.
Understanding future tax policies or fluid have you done any work Joshua Keith on the percentage of your customer base and locals and downtown that are potentially impacted by the proposed no tax on tips policy.
Ben Chaiken: Ben we really haven't I mean, we recognize that there would be a benefit.
Ben Chaiken: But Keith unless you know something I haven't seen anything.
Ben Chaiken: Yes, we haven't seen done anything bad.
Ben Chaiken: Okay.
Ben Chaiken: Helpful and then bigger picture question.
Joshua Keith whoever wants to take this you have to start us I gaming platform, which we really don't spend a lot of time talking about maybe you could expand on your ambitions with this product or investment opportunities to the extent that you want to.
Ben Chaiken: More into the BDC I gaming business. Thanks.
Ben Chaiken: Sure. So we launched into this a couple of years ago with the sole intent to make sure that we had a product.
Ben Chaiken: And that spoke to the customers in the markets, where we operate we got into this never intending to be a national leader, we're looking to attain a podium position across the U S. It really always was about making sure that when our customers want home at night in the states, where it's legal that we had a product that they could participate in.
Ben Chaiken: And so it was very modest investment to start off with I think it's performing.
Ben Chaiken: Right on or ahead of our expectations in terms of gaining traction where it has launched in places like New Jersey, and Pennsylvania, It's doing quite well very pleased with it and more prepared to grow into other states. Once again, where we do business or maybe an adjacent state to where we gained customers from.
Ben Chaiken: When state legislature's happened to approve it so continues to be a modest investment.
Ben Chaiken: You wouldn't you Shouldnt expect to see US go out and make any significant acquisitions.
Ben Chaiken: To bolster that I think it's a great platform, we're having great success you.
Ben Chaiken: You may see us do some smaller acquisition to beef it up but nothing significant.
Ben Chaiken: Understood. Thanks.
Ben Chaiken: Yep.
Ben Chaiken: Yeah.
Speaker Change: Thank you. Our next question comes from Joe Stauff Susquehanna Joe. Please go ahead.
Joe Stauff: Thank you.
Speaker Change: And Keith and Josh.
Speaker Change: I wanted to ask about land based cap land base Opex.
Speaker Change: In particular.
Speaker Change: Yeah, and just seeing where it is for you certainly in the current quarter in the last couple of quarters, you've had to manage through a lot of inflationary factors, especially wages.
Speaker Change: Over the past say year and a half or so just wondering are you in a position now where you think you can.
Speaker Change: Do you have some flexibility.
Speaker Change: To manage that lower.
Speaker Change: What seems to be the right balance in terms of.
Speaker Change: Just your overall land base of Opex.
Speaker Change: And the levers that you have today.
Speaker Change: Yeah.
Speaker Change: Yeah, So Joe.
Speaker Change: Think that.
Speaker Change: Our guys are constantly working on.
Speaker Change: I'm very focused on reducing overall operating expenses as you can imagine so while this is common sensor cultural of extents. They saw opportunities we would be we would be taken advantage of those so I think we're always looking for those opportunities looking for ways to be more efficiently looking for ways to utilize technology to help.
Speaker Change: Us be more efficient.
Speaker Change: I think.
Speaker Change: I think the one thing I would say just in the environment that we are in and this might be.
Speaker Change: Part of your.
Speaker Change: Implied question, which is <unk>.
Speaker Change: In periods of softness I think one of the things that we have.
Speaker Change: We learned from Covid is theres really.
Speaker Change: No no concept of fixed costs beyond property taxes insurance rent and interest expense, so everything becomes a variable cost and you evaluate those and get.
Speaker Change: <unk> gains were you can.
Speaker Change: That's what we try to do everyday.
Speaker Change: But in times of <unk>.
Speaker Change: Software revenue or whatever.
Speaker Change: <unk> other opportunities to adjust hours adjust amenities and things of that nature.
Speaker Change: But that's how it.
Speaker Change: Kind of give you a sense of answering your question.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Chad Beynon of Macquarie Chad. Please go ahead.
Chad Beynon: Hi, good afternoon. Thanks for taking my question John.
Speaker Change: Josh Keith I wanted to ask about <unk>.
Speaker Change: Some of the data that we've seen with Canadian travel obviously here in the U S. We're seeing it in all major cities, but some of the data came out in Las Vegas and showed that visitation was down so wanted to get a sense of what your exposure to those customers are in the downtown market and in Orleans.
Speaker Change: And then the second part of that is if we do see.
Speaker Change: That piece of business, which I think makes up about 5% of visitation.
Speaker Change: In all of Las Vegas, if you think that there could be some room rate discounting during this period. Thank you.
Speaker Change: Yes couple of comments I think for Las Vegas, as a whole and it probably depends on what numbers you look at it is closer to 3%, but regardless look for us as a company.
Speaker Change: Less than 110th of 1% here in Las Vegas, Didnt might be worth a few hundred thousand dollars to us.
Speaker Change: It's not a big piece of business and so.
Speaker Change: Look we're concerned about any loss of customer whether it be from Canada or any other destination.
Speaker Change: But specific to Canada.
Speaker Change: It's not a big piece of business for our company.
Speaker Change: Okay. Thank you and then a second one I guess just focusing on.
Speaker Change: Another potential risk the Hawaiian sports betting bill given that Theres, no casinos lottery sports betting and gaming and Hawaii. If this is passed.
Speaker Change: Do you believe that.
Speaker Change: I don't think we've seen cannibalization as much with sports betting to land base, but if you would view that as a risk or is there something that you could do to I.
Speaker Change: I don't know a partner or mitigate some of those customers who might not be coming to the United States to gamble, if they have it on their phones.
Speaker Change: Well look.
Speaker Change: Most people know we have a 50 year relationship.
Speaker Change: With the people of Hawaii and the residents there in the communities there and have spent the last 50 years supporting them and welcoming them here to our properties in Las Vegas.
Speaker Change: The extent there is any form of gaming in Hawaii, you should expect that Boyd gaming will be part of it.
Speaker Change: With respect to sports betting I don't think it will have any impact on our business here. It is.
Speaker Change: Something that they want to do will it change their overall budgets, maybe but it's going to change them, making trips to Las Vegas, just because they can bet on sports online and the islands I don't believe so.
Speaker Change: See it as a major impact, but you should assume if anything moves forward there that our company would.
Speaker Change: Have a role.
Speaker Change: We probably have the best brand of the most respected gaming company for the residents third Hawaii.
Speaker Change: Great. Thank you very much I appreciate it.
Speaker Change: Thank you.
Speaker Change: Our next question comes from John Decree of CB R. E. John Please go ahead.
Max Marsh: Hi, This is Max Marsh on for John decree, Thanks for taking our question.
Speaker Change: Throughout 2024.
Speaker Change: Core customer visitation being a little bit down but spend per visit being up since that consumer have a higher risk of being impacted by a recession or perhaps promotional intensity stepping up in the event of an economic downturn.
Speaker Change: Youre talking about Youre talking about in relation to the core customer.
Speaker Change: I just I Couldnt hear the first part of your question yes.
Speaker Change: Yeah, So look I think.
Speaker Change: Perhaps to put it in context.
Speaker Change: The core customer has been the most consistent of any of our customer throughout we've not since COVID-19 I can just because I know this we have not seen a quarter where that customer has been down.
Speaker Change: They've been flat and thats been the worst it's been with respect to that the trend within that customer.
Speaker Change: <unk> of you who were around during the financial crisis in 2008 and 2009 the issue wasn't that the core customer Didnt show up it was the unrated customer and the lower end retail customer were still showing up they just werent spending money. The core customer was the most stable even in that dramatic of a change in the <unk>.
Speaker Change: Uh huh.
Speaker Change: So.
Speaker Change: The core customer.
Speaker Change: His name that for a reason there are core to our business and they've been very consistent.
Speaker Change: Great. That's all for me thank you very much.
Speaker Change: Thank you.
Speaker Change: Our last question comes from Barry Jonas of Truest Securities Berry. Please go ahead.
Barry Jonas: Hey, guys.
Barry Jonas: Any updated thoughts on Eastside cannery here.
Barry Jonas: No really not our views haven't changed obviously the property has not reopened.
Barry Jonas: Post the Covid crisis, and we've said in the past that really the market out there really doesn't support the opening of an additional property and sitting here today it still doesn't support the opening of additional.
Capacity in that area.
Barry Jonas: So no really no other views on that.
Barry Jonas: Okay, Great and then just in the past you talked about the trough by 15 interchange project, having some impact any updates there.
Barry Jonas: In terms of continuing to impact and maybe what not surpassed.
Barry Jonas: Yeah No I appreciate the question look it's something we haven't talked a lot about over the last several quarters, but it certainly has had an impact on the business mainly at the Orleans. We're hopeful that later this year that that project will.
Barry Jonas: Kind of.
Barry Jonas: Finish to a point, where that interchange of trop and <unk> has cleared up I mean, it is the main ingress and egress point. It is the main corridor for people to get to the Orleans.
Barry Jonas: To have them come up alternative streets and unfortunately during many periods of time those alternative access points like off of Russell, which is the street rate for Tropicana had been closed at the same time trough has been close so it's great a great confusion amongst our customers. So we're hopeful that later this year that project will be at a point, where we no longer have to worry.
Barry Jonas: We about it or complain about it but it's not there yet.
Speaker Change: Helpful. All right. Thanks, so much.
Barry Jonas: Sure.
Barry Jonas: Sure.
Barry Jonas: This.
Barry Jonas: <unk> our question and answer session I would now like to turn the call over to Josh for concluding remarks. Thanks.
Barry Jonas: Thanks, David and thanks to everyone for joining our call you have any follow up questions feel free please feel free to reach out to the company.
Speaker Change: This concludes the call today and you can now disconnect.