Red Rock Resorts, the publicly traded entity of Station Casinos, reported a 12.7% year-over-year increase in revenue for the first quarter of 2024, reaching $488.9 million. The earnings per share (EPS) stood at $0.68, compared to $0.75 in the same period last year.
The company’s revenue, driven by the successful launch of its newest property, Durango Casino & Resort, marked the best first quarter in its history. The executives highlighted the positive feedback received from customers regarding Durango, which opened its doors five months ago in the southwest Las Vegas Valley.
The reported revenue represented a surprise of -0.05% over the Zacks consensus estimate of $489.12 million, while the EPS surpassed expectations by +36.00%, with a consensus estimate of $0.50. Operating revenues from the casino segment totaled $316.85 million, a Y-o-Y growth of 9.9%, while Las Vegas operations in specific reported net revenues of $485.57 million, marking a 12.9% increase from the previous year.
According to Station Casinos CEO Frank Fertitta III, the success in the quarter can be attributed to the strategic location of Durango. Plans for future expansion on the 441 acres of land owned by Red Rock Resorts, potentially by year’s end, further underscore the company’s bullish outlook on the property.
While the quarter was a stellar one for Red Rock, the company faced challenges from unfavorable betting results in the Super Bowl and March Madness, which impacted earnings by about $4.4 million. Road construction near Palace Station also contributed to a revenue decline of an estimated $4 million.
Red Rock’s portfolio includes Red Rock Casino Resort & Spa, Green Valley Ranch, Santa Fe Station, Sunset Station, Boulder Station, and a growing tavern portfolio. But it was Durango the one that contributed significantly to the influx of new customers, with 37,000 sign-ups in the first three months of 2024.
Looking ahead, Red Rock Resorts plans to break ground on a new 100,000-square-foot casino project in partnership with North Fork Rancheria on 305 acres north of Fresno, California. Meanwhile, attention will be focused on addressing parking solutions at Durango and advancing Phase 2 developments.
Additionally, the company is exploring opportunities to divest certain properties, including parcels of land in Las Vegas and Reno, to optimize its portfolio and unlock shareholder value.