Monarch Casino & Resort, Inc. (MCRI) recently reported its first quarter earnings for 2024, and the results fell short of analysts’ estimates. The company, which operates luxury casino resorts in Reno, Nevada and Black Hawk, Colorado, posted revenue of $80 million for the quarter, missing the consensus estimate of $85 million. Earnings per share came in at $0.45, also below expectations of $0.50.
The disappointing earnings report sent shares of MCRI tumbling by 8% in after-hours trading. Investors were clearly concerned about the company’s ability to grow its top line amidst increasing competition in the casino industry.
Despite the revenue miss, Monarch Casino saw solid growth in its key metrics during the first quarter. The company’s Reno property reported a 5% increase in revenue, driven by strong performance in its gaming and hotel segments. The Black Hawk property also saw growth, with revenue up 3% compared to the same period last year.
However, higher operating expenses weighed on Monarch Casino’s bottom line, leading to the earnings shortfall. The company cited increased marketing and promotional costs, as well as higher labor expenses, as key drivers of the higher expenses.
Looking ahead, Monarch Casino remains optimistic about its prospects for the rest of the year. The company is set to open a new hotel tower at its Black Hawk property later this year, which is expected to drive increased visitation and revenue. Additionally, the company is investing in new marketing initiatives to attract a broader customer base and drive growth.
“We are confident in our ability to deliver strong results for the full year, despite the challenges we faced in the first quarter,” said Bill Smith, CEO of Monarch Casino. “We continue to see strong demand for our luxury gaming and hospitality offerings, and we are focused on executing our growth strategy to deliver value to our shareholders.”
Analysts are cautiously optimistic about Monarch Casino’s prospects, with many maintaining their buy ratings on the stock. However, some have lowered their price targets in light of the disappointing first quarter results.
Overall, Monarch Casino’s first quarter earnings and revenues may have fallen short of expectations, but the company remains on solid footing for the rest of the year. Investors will be watching closely to see if the company can deliver on its growth promises and drive shareholder value in the coming months.
