PENN Entertainment has achieved a remarkable milestone, generating $1.505 billion in revenue across its four regional divisions, marking a record for the retail segment. The adjusted EBITDAR saw a 5.6% increase, reaching $517.2 million, which elevated the retail margin to 34.4%. Following this announcement, PENN's shares rose by 2.6%, closing at $20.13.
In its latest quarterly report, PENN showcased its strongest performance since the dissolution of its ESPN Bet partnership. The company not only reported a record in retail casino revenue but also noted the smallest digital loss since it began large-scale online sports betting.
Based in Wyomissing, Pennsylvania, PENN reported adjusted earnings of 44 cents per share for Q2, surpassing the Zacks Investment Research consensus estimate of 35 cents. The company turned around its financials, achieving a net income of $32.6 million, or 24 cents per diluted share, compared to a loss of $18.3 million, or 12 cents per diluted share, from the previous year.
Total revenue increased by 5.2%, totaling $1.857 billion. This figure exceeded market expectations, with Zacks noting a revenue surprise of 0.06%. Therefore, claims of a revenue miss following the release were unfounded.
More significantly, the consolidated adjusted EBITDA rose to $312.6 million, a 32.4% increase of $76.5 million. Notably, the Interactive segment's adjusted EBITDA loss decreased substantially, from $62.0 million to $9.5 million, contributing $52.5 million to the overall improvement.
On August 6, shares closed at $20.13, reflecting a 2.6% increase. The stock has appreciated approximately 36% in 2026 but remains about 10% below its 52-week peak of $22.36.
In summary, PENN's four regional divisions collectively generated $1.506 billion in revenue, a 3.9% increase. The adjusted EBITDAR for the segment rose by 5.6% to $517.2 million, enhancing the retail margin by 55 basis points to 34.4%. CEO Jay Snowden highlighted the strong performance across the portfolio, with nine properties achieving second-quarter records in both revenue and adjusted EBITDAR, driven by growth in theoretical revenue and significant contributions from mid- and high-value customer segments.
Operating expenses increased only 2.3%, compared to the 5.2% revenue growth, resulting in a 69.9% rise in operating income to $131.7 million, which pushed the consolidated operating margin from 4.4% to 7.1%. The West region experienced the most significant growth at 10.0%, aided by the recent opening of a hotel tower at M Resort near Las Vegas. The Midwest also saw a 7.9% increase, largely due to the Hollywood Casino Joliet's performance, while the South remained stable with a slight revenue decline of 0.1%. During the quarter, two new openings occurred: a hotel tower at Hollywood Columbus and the relocated Hollywood Casino Aurora.