Penn National Gaming Reports Strong Q1 But Stock Still Declines

Penn National Gaming Reports Strong Q1 But Stock Still Declines

Wrapping up a hellish week for casino stocks and Wall Street in general is Penn National Gaming ($PENN), which reported its first-quarter earnings yesterday.

Although the Pennsylvania-based company boasted record Q1-revenue, the company’s $0.29 per share earnings missed analyst estimates of $0.45 per share. In the year, the company’s 12-month stock decline is up to 57.63%.

But $PENN wasn’t the only casino and online gaming company to report a first-quarter loss. Earlier in the week, Caesars Entertainment reported a loss of $2.11 per share. 

As of writing, shares of $PENN were trading at $35.56.

Penn National Gaming Q1 details

During a call with Wall Street analysts, CEO Jay Snowden said visitations from younger demographics keep the company optimistic. 

“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.”

First-quarter earnings include:

Record revenue of $1.56 billion – up 22.7% from the year prior
$658.5 million from the company’s Northeast segment
Revenue of $141.5 million from the company’s iGaming sector

Penn National is gambling on itself — and winning

Penn National owns 36% of Barstool Sports. Although controversial at times, the acquisition has proven valuable by helping lower marketing cost for online casinos and sports betting.

“Disciplined organic marketing, omnichannel cross-sell, great products and owning our media strategy with our friends at Barstool Sports and theScore have led to growth in our net gaming revenue market share results in the first quarter. We believe our differentiated approach will benefit us going forward.”

The company also announced new payment methods coming to its Barstool Sportsbook app, including Mastercard and Apple Pay.

Speaking of theScore, which Penn acquired for $2 billion, the popular Canadian sports app is off to a strong start. Canadian sports betting launched in Ontario on April 4 with a handful of operators. 

“theScore Bet’s performance thus far in Ontario has exceeded our expectations, due in large part to theScore’s incredible brand recognition and media footprint as well as the support from Barstool Sports and the popular team from Spittin Chiclets, the number one Hockey Podcast in Canada,” Snowden said.

Lastly, Snowden made no reference to whether or not the company was considering a name change.

Author: Tyler Gutierrez