Golden Entertainment Results Far From Stratospheric, Company Posts Q3 Loss
Posted on: November 11, 2018, 10:00h.
Last updated on: November 10, 2018, 05:08h.
Stratosphere owner Golden Entertainment said during an earnings call this week it had experienced a “challenging” third quarter, as it posted a net loss of $3.1 million.
Revenues for the tavern owner-turned budding casino giant nearly doubled to $210.3 million from $107.7 million, but the company failed to hit analysts’ forecasts, according to Zacks. The investment research firm noted that Golden has missed earnings-per-share forecasts for four consecutive quarters.
Golden is the largest tavern operator in Nevada with over 55 establishments, including PT’s, Sean Patrick’s Irish Pub & Grill, Sierra Gold and SG Bar. It joined the big leagues in the casino industry in 2017 through the acquisition of American Casino & Entertainment Properties, whose assets included the Stratosphere. Golden also owns several hotel-casinos in Southern Nevada and Maryland as well as slot routes in Nevada and Montana.
In July, it announced the acquisition of two Laughlin casinos — the Edgewater and Colorado Belle — from Marnell Gaming for $190 million. The company said it expected to finalize that deal in the first quarter of 2019.
The Loughlin properties together boast over 1,400 slot machines, 40 table games, 2,150 hotel rooms, and 11 restaurants. Also included in the deal is the Laughlin Event Center, a 12,00-seater outdoor arena.
Despite strong performance from our Laughlin and Las Vegas Local properties, we experienced a challenging third quarter primarily due to weaker than expected results at the Stratosphere and at chain store locations in our Nevada distributed gaming business,” said Golden Entertainment CEO Blake Sartini.
“We are seeing improving trends early in the fourth quarter and expect stronger performance in 2019, particularly at the Stratosphere following the renovation of 750 rooms and the opening of our new sportsbook, lounge and tap room concept.”
Sartini said the ongoing renovations to the Stratosphere affected hotel occupancy, particularly in July and August. Meanwhile, the Strat Café – one of the hotel’s busiest food outlets — was closed all of September. The upgrade is also expected to finish in Q1 of 2019.
Sartini cited market softness on the Strip during the quarter, but added the company retained complete faith in the Las Vegas market, noting strong economy and high visitation numbers.
“We currently see no signs that Las Vegas is losing its place as the leading destination for leisure and convention travel,” Sartini said.
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