WYNN Q1: PRELIMINARY THOUGHTS

05/05/09 10:43AM EDT

Not a great quarter out of WYNN when "luck" is taken out of the equation.  However, in this market with the momentum surrounding the sector, no quarter is a bad quarter.  We were not impressed, however, and WYNN may face a more difficult Q2 than some of the other players.  Here are some preliminary thoughts.

  • WYNN did better in Las Vegas than we thought but still below the Street. Slot hold % was higher than normal. Table hold percentage of 18% appears low, but in this environment 18-20% is probably normal, not 21-24%. If we give them credit at a table hold of 20% and normalize the slot hold %, LV EBITDA would've been $53 million instead of the actual of $44 million
  • Macau was strong but the hold % was pretty high on both the Rolling Chip and Mass Market business. EBITDA of $114 million would've been $20-25 million lower assuming a normalized hold percentage, below the Street at $103 million.
  • In LV, WYNN is very reliant on room rates and his have farther to fall than the rest of the Strip.
  • In Macau, WYNN maintains large exposure to the Rolling Chip business which is the segment most under pressure.
  • We are assuming the discussion surrounding Las Vegas will center around a "less bad" thesis, similar to MGM.
  • WYNN lost 3-4 percentage points of market share in Macau in April. It will be interesting to see how this is addressed on the call
© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.