HIGHER PROMOS BUT IT COULD’VE BEEN WORSE

The chart below analyzes the Q4 promotional environment as measured by promotional allowances as a percentage of gross revenues. Not surprisingly, each operator spent a higher percent of gross revenues in giveaways. However, with the exception of the Las Vegas operators, the year over year increases were not as great as I would have expected for the rest.

Despite the awful consumer environment, the regional operators managed to keep promotional expenses in check. The promotional percentage increased 1% or less in Q4 2008 in these markets.

One standout of note is Boyd Gaming. BYD’s promotional percentage barely increased despite operating in everyone’s favorite punching bag market: Las Vegas. The Las Vegas locals market is BYD’s largest. Thanks to a severely capital constrained Station Casinos (the largest play in the LV locals market), the promotional environment remained somewhat tame, despite a pretty dreadful top line performance. We are not so negative on the 2010-and-beyond outlook for the Las Vegas market (See “THE LAS VEGAL LOCALS MACRO MODEL”) due in part to Station’s demise. Imagine if BYD could walk away with some of the Station assets?

The situation is much more dire for the other major Las Vegas market, the Strip. As can be seen in the chart, LVS and WYNN saw their promotional percentage increase significantly. MGM hasn’t reported but we expect to see an increase there as well.


Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more