Wynn's income drops by over 9%, and projects are delayed as CEO Billings minimises the effects of tariffs.

 Despite Q1 reductions and postponed capital expenditure initiatives, Wynn Resorts is still optimistic about its capacity to withstand economic volatility.
 Wynn-Encore
 In spite of a number of other decreases, including an 8.6% year-over-year drop in revenue to $1.7 billion, Wynn Resorts became the latest casino operator to discount worries about tariffs and consumer softening on Tuesday.

 From $144.2 million in the previous quarter to $72.7 million this quarter, the group's net income was cut in half.  Additionally, diluted net income per share was reduced by about half, from $1.30 per share in the first quarter of 2024 to $0.69 this year.

 "Operating revenues at Wynn Macau, Wynn Palace, our Las Vegas Operations, and Encore Boston Harbour, respectively, decreased $81.8 million, $51.0 million, $11.3 million, and $8.6 million from the first quarter of 2024," the business stated in a press release.

 The quarter's group adjusted property EBITDAR was $532.9 million, a 17.5% YoY decline.  Adjusted EBITDAR decreased by $40.7 million, $40.5 million, $22.9 million, and $5.7 million for Wynn Macau, Wynn Palace, Las Vegas operations, and Encore Boston Harbour, respectively.

 Presentation of Wynn Resorts' Earnings for Q25 Get it here
 "Low and entirely manageable" impact on opex
 Similar to other casino operators in Las Vegas, Wynn ascribed these drops in part to the difficult comparisons from last year's Super Bowl hosting.  The corporation stated that there were several YoY gains during the period when Super Bowl weekend was not included in the calculations.

 However, given that Wynn is perhaps the most upscale luxury gaming brand, analysts were interested in seeing how CEO Craig Billings would respond to the present economic climate.  Billings immediately addressed the issue, bringing it up at the beginning of Tuesday's investor call.

 "With the majority of the impact in the US coming from food and beverage, where we are actively working through alternative sourcing for the most impactful items," he stated in prepared remarks, "we expect the direct impact of tariffs on OpEx to be low and entirely manageable."

 In response to enquiries, Billings subsequently stated that while travel is expected to decline, "it doesn't really impact us much at all."  Even though he did warn that things can change, "everything is pretty good, actually," at the moment.

 But CapEx "is a different story," he stated.

 Projects totalling $375 million have been postponed.
 Wynn Las Vegas initiatives "representing approximately $375 million of previously disclosed project capital expenditures" are being "reassessed in terms of timing, scope, and sourcing," the company announced.

 During the call, Billings stated, "Although we're remaining flexible, the rate of change right now is simply too great to commit to any updated timing on that CapEx."

 The refurbishment project at the Encore tower in Las Vegas was the largest item on the budget.  Of the $375 million total, Billings put that figure in the "high $200s."  He told analysts that the projects had been put on hold rather than completely abandoned.

 In spite of this, Wynn was able to repurchase $200 million worth of shares during the quarter, and the business revealed on Tuesday that its board had approved a $0.25 cash dividend per share, which will be paid out on May 30.  Wynn has $10.5 billion in total debt and $2.07 billion in cash on hand as of March 31.

 Al Marjan's advancement
 The Al Marjan Island joint venture in the United Arab Emirates, which Billings has frequently referred to as the most potential gaming development any company now has, was updated by company officials.  Wynn, along with partners Marjan and RAK Hospitality Holdings, controls 40% of the business.

 Wynn made a $51.2 million cash contribution to the development during Q1, and it is currently up to the 47th story.  As of right now, the corporation has contributed $682.9 million in total.

 "Everything is still on track for a 2027 opening," Billings said in response to a question about how tariffs would affect construction.  According to him, the majority of the materials have already been bought, which will assist prevent further expenses.

 New York is still alive.
 Given Wynn's $12 billion Hudson Yards deal with Related Companies and Oxford Properties Group, the possibility of obtaining a New York casino licence was another topic of discussion on Tuesday.  Prior to the deadline of June 27, two of the original candidates, Hudson's Bay Co. and Las Vegas Sands, have formally withdrawn their bids.  Given that both LVS and Wynn are owners of upscale resorts and are worried about competition from internet gaming, their analogy is notable.

 New York is "a great potential market," according to Billings, but it's also "a complicated market with a lot of considerations."  Similar to LVS, he expressed concern about the possibility of legalising iGaming in New York.  However, he made no indication that he intended to withdraw the proposal completely.

 In late April, the partners' Hudson Yards proposal underwent a substantial modification, with the housing commitment more than doubled from 1,500 units to 4,000.  Opponents' major point of complaint had been this, although there are still a number of obstacles to overcome before licenses are granted at the end of the year.

 Billings told analysts, "We are still in the running for a licence in New York, but we will not get over our skis to win one there."

 In other parts of Asia
 Japan and Thailand, two other noteworthy locations that were addressed during the earnings call, have experienced fluctuations in their appeal as gaming investment destinations.  While Thailand came extremely close to a large casino expansion this spring before suspending legislation for further consideration, Japan, which formerly had multiple bids, has now been reduced to just one project: MGM Osaka.

 Billings stated that there were certain "components of the bill that probably won't work" in reference to Thailand.  This could have been a reference to the contentious practices of background checks for patrons and great wealth.

 There have been rumours that Japan would put up to two more licenses up for sale in a second round.  Although Wynn had previously expressed interest in the sector, it stopped doing business there in 2020.  In addition to citing "structural challenges," Billings appeared pessimistic about the market as a whole.

 "There are a lot of opportunities for development," he stated.  “If the conditions were right, we would only consider Japan.”