PENN Entertainment, Inc. PENN reported a narrower-than-expected loss in third-quarter 2024 results. Meanwhile, the top line missed the Zacks Consensus Estimate but increased on a year-over-year basis.

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The company's performance was backed by better-than-expected results in its Interactive segment. Improved hold and a higher parlay mix contributed to this growth. Also, lower promotional expenses supported the upside. However, stable consumer demand in the retail business was partially offset by an unfavorable hold in the Northeast segment. The South segment also experienced volume declines due to severe weather disruptions and ongoing hotel remodeling.

Following the results, the company’s shares rose 5.2% during yesterday’s trading hours.

PENN’s Q3 Earnings & Revenue Discussion

In the quarter under review, PENN reported an adjusted loss per share of 24 cents, narrower than the Zacks Consensus Estimate of a loss of 28 cents. In the prior-year quarter, it reported adjusted earnings per share of $1.21.

Total revenues of $1,639.2 million missed the Zacks Consensus Estimate of $1,653 million. The top line increased 1.2% on a year-over-year basis. This upside was backed by the strong Interactive segment’s performance.

Revenues from the Northeast, West, Midwest and South segments were $684.8 million, $131.8 million, $292.2 million and $288.1 million, down 0.3%, 2.4%, 0.4% and 6.5% year over year, respectively. The Other segments' revenues totaled $4 million, down 11.1% year over year.

However, the Interactive segment delivered revenues of $244.6 million, up 24.6% year over year.

PENN’s Operating Headlines

In the quarter under discussion, adjusted EBITDAR declined 21.7% from the prior-year quarter’s level to $348.4 million. Adjusted EBITDAR margin contracted to 21.3% from 27.5% a year ago.

Penn Entertainment’s Interactive division incurred an adjusted EBITDAR loss of $90.9 million against $50.2 million in the prior-year quarter.

Other Financial Information of PENN

As of Sept. 30, 2024, PENN had cash and cash equivalents of $834 million compared with $1.1 billion as of Dec. 31, 2023. Traditional net debt as of Sept. 30, 2024, was $1.77 billion, up from $1.57 billion at 2023-end. Total liquidity as of Sept. 30, 2024, was $1.8 billion.

PENN’s Zacks Rank

PENN Entertainment currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Consumer Discretionary Releases

Hyatt Hotels Corporation H delivered third-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.

The company reported a 3% increase in comparable system-wide hotel RevPAR compared with the same period in 2023. However, comparable system-wide all-inclusive resorts’ Net Package RevPAR declined 0.9% year over year. As of Sept. 30, 2024, Hyatt had a pipeline of executed management or franchise contracts for approximately 690 hotels (or about 135,000 rooms).

Norwegian Cruise Line Holdings Ltd. NCLH reported solid third-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.

Management attributed the performance to the strength of NCLH's business model, the appeal of its product offerings across brands and the effective execution by both shoreside and shipboard teams. Driven by high demand and a focus on cost control and margin enhancement, the company has raised its full-year guidance for a fourth time, anticipating 2024 to set new records for revenues, Net Yield growth and adjusted EBITDA.

MGM Resorts International MGM reported third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year quarter.

During the quarter, the company reported sequential improvements in Las Vegas, driven by growth in Average Daily Rate and occupancy levels. It emphasized advancements in digital investments and an impressive pipeline of integrated resort developments in Japan, New York and other markets to drive growth in the upcoming periods.

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