Red Rock Resorts has announced impressive first-quarter revenue figures, largely fueled by robust activity in its Las Vegas operations. However, the company did note a slight decline in profit and core earnings, along with warnings of potential disruptions due to ongoing construction projects.
Net revenue saw a 1.9% increase, reaching $507.3 million, while net income decreased by 3.8% to $82.7 million. Adjusted EBITDA also fell by 1.2% to $212.6 million, although the company achieved its second-highest adjusted earnings and nearly-record margins of 46.5% in Las Vegas.
Las Vegas operations contributed a revenue boost of 0.9%, totaling $499.5 million, driven by strong play on carded slots and increased spending per visit. Nonetheless, adjusted EBITDA for this segment dropped by 1.5% to $232.4 million. Overall, core trends for slots and tables remained stable throughout the market.
In addition to gaming, non-gaming segments like hotels and food and beverage services reported near-record revenues and profitability. Native American operations also contributed $4.7 million in revenue and $2.9 million in adjusted EBITDA.
Stephen Cootey, the Chief Financial Officer, highlighted that the company's Durango property is playing a pivotal role in fostering growth in the Las Vegas locals market. Recent and upcoming expansions are aimed at increasing capacity and customer spending.
The company is in the process of expanding the Durango property by 275,000 square feet, which will include new gaming and entertainment facilities, with completion projected for 2027 at an estimated cost of $385 million.
For the entire year, Red Rock anticipates capital expenditures between $375 million and $425 million, which will cover upgrades at Sunset Station, where renovations are currently underway to improve the casino floor, dining options, and entertainment amenities.
Cootey stated, “We are advancing the next phase of Sunset Station, which is designed to enhance the property’s competitive edge and broaden its appeal to customers, particularly in light of the growth in Henderson, especially from the master-planned communities of Ascaya and Cadence.”
However, the company expects that construction activities at various properties, including Durango, Green Valley Ranch, and Sunset Station, will result in significant disruptions amounting to millions of dollars in the second quarter.
At the end of the quarter, Red Rock reported having $134.0 million in cash and cash equivalents, alongside total debt of $3.6 billion. The board has declared a dividend of $0.26 per share for the upcoming second quarter.
Board member Lorenzo Fertitta mentioned that the company is also exploring new development opportunities. “We are currently working on two new greenfield projects, focusing on planning, scale, and pricing,” Fertitta said. “Progress is being made, but we do not have any announcements at this time. As we move into next year, we expect to have clearer insights into our development plans.”