Shares of Wynn Resorts slide in mixed quarter. Blame Macau.
Shares fell early Wednesday on mixed second-quarter results that were dragged lower by ongoing shutdowns in Macau.
Wynn (ticker: WYNN) said it lost 83 cents per share on revenue that fell more than 8% from the year-ago period to $908.8 million. Analysts were looking for a loss per share of $1.11 on revenue of $980.9 million.
The company’s domestic resorts in Las Vegas and Boston saw a slight increase in revenue from a year ago. But Macau continued to weigh on turnover, with falling revenue at its two properties there. The Chinese gaming hub has long struggled with sweeping pandemic-related lockdowns that have restricted travel, although there have been glimmers of hope that could ease.
The picture was about the same in Wynn’s first quarter, reported in May.
Wynn shares slipped 1.6% to $64.95 in latest trades; shares have lost more than 22% since the start of the year.
On the positive side, the continued strength of Wynn’s US properties demonstrates that consumers are still spending freely, even as worries about inflation and economic uncertainty weigh on wallets. As JP Morgan’s Joseph Greff writes, “WYNN is not currently seeing any slowdown in consumption amid a weaker macro backdrop, similar to its peers reporting this earnings season.”
However, the real issue is, unsurprisingly, Macau, given that there is relatively low visibility on when the situation could change, creating a continued overhang for the stock.
“As for Macau, we don’t see any improvement until 2023 at the earliest (not that we, or anyone, have a crystal ball of when this market will start to improve) and, quite honestly, it’s hard to say. ‘have a lot of conviction in Macau’s 2023 estimates.’” writes Greff.
Last month, Barrons also argued that 2023 was probably a best-case scenario, while noting that Las Vegas Sands (LVS) may have oversold. This stock is up more than 5% since, while the
increased by 0.5%.
Write to Teresa Rivas at [email protected]