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Updated: May 6, 2022 @ 8:47 am
WFMZ.com Reporter
WYOMISSING, Pa. — Thanks to the success of its omni-channel strategy, continuing growth, and acquisitions of companies providing new delivery methods for gaming, Wyomissing-based Penn National Gaming reported strong sales results in its two segments as well as combined operations.
The property level segment consists of retail operating segments of the company’s Northeast, South, West, and Midwest reportable segments. It reported revenues of $1.42 billion in the quarter.
The interactive segment reports the results of theScore operation and Penn National’s share of Barstool Sports. Its revenues were $141.5 million.
In his presentation to analysts, President and Chief Executive Officer Jay Snowden pointed out how the company was executing its strategy by building its ecosystem: «Our mychoice database grew by 350,000 in the first quarter and Barstool Sports and theScore are continuing to grow their audiences with strong engagement.»
He said Penn National was leveraging its structural advantages with its integrated media and retail operations delivering the industry’s lowest customer acquisition costs while retail sportsbooks are driving enhanced interactive profitability.
«We’re on track to transition theScore’s proprietary risk and trading platform in Ontario in quarter three 2022,» Snowden commented, «and to integrate the Barstool Sportsbook into theScore’s media app by the second half of 2022.»
Also, Snowden noted that the company’s cashless technology is now live at nine properties, with 14 more planned over the next two quarters.
Snowden also commented in a statement, «Based on the strength of our first quarter performance and our outlook for the remainder of the year, we are increasing our prior 2022 revenue and Adjusted EBITDAR guidance range to $6.15 billion to $6.55 billion and $1.875 billion to $2.00 billion, respectively.»
Penn National Gaming generated record first quarter results with revenues of $1.56 billion, an increase of 22.7% year-over-year, and adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) of $494.7 million, an increase of 10.7%. Net income, however, declined to $51.6 million from $90.9 million the previous year, and net income margin dropped to 3.3% from 7.1% the previous year.
Wall Street didn’t like the earnings news. The stock was down nearly 5% and trading close to its 52-week low at midday. But then, Wall Street didn’t like much of anything on Thursday.
The company saw strong property level performance supported by active database growth. Property level highlights included revenues of $1.42 billion; adjusted EBITDAR of $528.4 million; and adjusted EBITDAR margins of 37.1%.
Penn National said older core demographics are re-engaging with increased visitation levels and spend per guest. It claims a rational and stable marketing / promotional environment in most markets has led to lower company-wide reinvestment rates; and first quarter 2022 demand trends continue in the second quarter of 2022 to date.
«We remain encouraged by the ongoing visitation from younger demographics and are focused on continuing to reimagine our properties and offerings to enhance the entertainment appeal to this steadily growing segment of consumers,» said Snowden. «Our database grew across all worth segments by 14%, led by 28% year-over-year growth in our VIP segment and 11% in our core segments driven by our new online and retail sportsbook offerings and our recently opened Hollywood Casino York and Morgantown casinos in Pennsylvania.»
The interactive segment reported revenues of $141.5 million; an adjusted EBITDA loss of $10.0 million; and a successful launch of the Barstool Sportsbook mobile app in Louisiana in January, and theScore Bet mobile app in Ontario in April, 2022.
«The interactive segment generated meaningful growth year over year and our profitability objectives are unchanged,» Snowden said. «Our launches in Louisiana and Ontario have demonstrated the value of both our omni-channel strategy and our investment in new technology. In Louisiana, we benefited from both our best-in-class regional casinos and grass-roots marketing by Barstool Sports personalities. In Ontario, we successfully launched theScore Bet mobile app on April 4th to impressive demand.»
In the third quarter of 2022, the company said it expects to transition theScore Bet in Ontario to theScore’s proprietary risk and trading platform, which will allow it to bolster the product’s features and capabilities, including expanded betting markets and exclusive bet features.
Snowden continued, «Our media business is building momentum, as theScore grew revenue 42.0% year over year in the first quarter and continues to garner high levels of engagement. Barstool Sports Inc. has also continued to expand its audience and reach while pursuing new growth opportunities.»
On March 18, Penn National reported, the second stand-alone Barstool Sports bar opened in Philadelphia to high demand. Looking forward, the company believes there is upside for the media business as it begins to realize the benefits of cross promotion with Barstool Sports and additional monetization opportunities.
On April 26, the company released its 2021 Corporate Social Responsibility Report, providing insights into what Penn National Gaming calls its «longstanding commitment» to care for its people, its communities and the planet. Highlights include the launch of a $4 million STEM Scholarship Fund and internship program at historically black colleges and universities in states in which Penn National operates.
Penn National also contributed more than $7 million to help fund COVID-19 and hurricane relief efforts, in addition to supporting worthwhile charities and civic organizations in the communities in which it operates — a two-fold increase over 2019.
More recently, on March 23, company executives hosted Louisiana Gov. John Bel Edwards and other dignitaries at the annual Metanoia Gala at L’Auberge Casino & Hotel in Baton Rouge to raise funds to support adolescent victims of human trafficking. Penn National also held several events in appreciation of Women’s History Month, including a «Women Behind theScore Bet» virtual panel to recognize the critical role our female team members played in the development of theScore Bet app.
WFMZ.com Reporter
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