Luxury hotels and casino operator Wynn Resorts (NASDAQ: WYNN) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 8.7% year on year to $1.7 billion. Its non-GAAP profit of $1.07 per share was 14% below analysts’ consensus estimates.
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Wynn Resorts (WYNN) Q1 CY2025 Highlights:
- Revenue: $1.7 billion vs analyst estimates of $1.73 billion (8.7% year-on-year decline, 1.8% miss)
- Adjusted EPS: $1.07 vs analyst expectations of $1.24 (14% miss)
- Adjusted EBITDA: $441.5 million vs analyst estimates of $571.6 million (26% margin, 22.7% miss)
- Operating Margin: 15.8%, down from 19.5% in the same quarter last year
- Free Cash Flow was -$26.16 million, down from $217.4 million in the same quarter last year
- Market Capitalization: $10.02 billion
StockStory’s Take
Wynn Resorts’ first quarter results were shaped by a combination of competitive market dynamics and external macroeconomic pressures, most notably the impact of newly imposed tariffs. Management highlighted that while core operations in Las Vegas, Boston, and Macau maintained demand, the company opted to delay $375 million in U.S. capital expenditure projects, including the Encore Tower remodel, in response to tariff-driven cost increases. CEO Craig Billings emphasized that, despite this delay, operating performance was resilient across key segments, and recent property enhancements—like Wynn Palace’s Gourmet Pavilion—are supporting guest traffic and spend.
Looking forward, Wynn’s leadership noted ongoing uncertainty stemming from short booking windows and evolving customer behavior, particularly in its international visitor base. The company is monitoring the indirect effects of tariffs on demand but indicated confidence in its ability to adapt. CFO Julie Cameron-Doe stated, "We remain well positioned to drive strong operating leverage as the market continues to grow over time," underscoring a focus on disciplined cost management and targeted investment. However, management also acknowledged that competition in Macau remains intense and that market stability will be critical for sustained profitability.
Key Insights from Management’s Remarks
First quarter performance at Wynn Resorts reflected the effects of external cost pressures, evolving customer trends, and ongoing investment in new amenities. Management provided context for headline results and discussed operational adjustments made to address current challenges.
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Tariff-related CapEx delays: The company placed $375 million in U.S. capital projects on hold, including the Encore Tower remodel, due to higher input costs from tariffs. Management explained that these delays are temporary and will be re-evaluated once tariff levels stabilize.
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Las Vegas demand resilience: Excluding the prior year’s Super Bowl benefit, Las Vegas properties saw year-over-year increases in drop (money wagered), slot handle, and RevPAR (revenue per available room)—a sign of underlying demand strength. Investments in premium slot areas and guest experience were credited for this momentum.
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Macau competitive landscape: Management described the Macau market as highly competitive, especially in the premium mass segment where promotional activities have stabilized. The recent opening of the Gourmet Pavilion food hall at Wynn Palace has driven additional visitation, supporting incremental restaurant covers and potential gaming revenue.
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Cost discipline across markets: Both Las Vegas and Boston teams were able to offset labor cost pressures through operational efficiencies, resulting in relatively flat operating expenses year-over-year (excluding gaming tax). Macau’s OpEx per day also remained flat despite new amenity openings.
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Development pipeline progress: Construction at Wynn Al Marjan Island in the UAE continues, with the tower reaching its 47th floor. Management reiterated that the project remains on track and highlighted the strategic value of entering new regulated gaming markets.
Drivers of Future Performance
Management’s outlook for the next few quarters centers on cautious optimism amid evolving regulatory, competitive, and macroeconomic conditions. The main themes include adaptation to cost pressures, disciplined capital allocation, and capturing demand through targeted property enhancements.
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Tariff and cost environment: Leadership expects ongoing tariff uncertainty to influence capital spending timing, but not operational expenses, as alternative sourcing for impacted goods is underway. Delayed projects will be revisited when input costs become more predictable.
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Competitive Macau dynamics: The company views stable promotional activity and the addition of amenities as crucial to maintaining market share in Macau, though management acknowledged that short booking windows and new competitor products make the market more challenging.
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Development and diversification: Advancement of new projects, notably Wynn Al Marjan Island and potential entries into markets like New York and Thailand, are seen as key to long-term growth, though management highlighted regulatory and cost complexities as risks to execution.
Top Analyst Questions
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Carlo Santarelli (Deutsche Bank): Asked about the impact of Super Bowl comps and cadence of remaining equity contributions for the UAE project. Management clarified that comps reflected Super Bowl shifts and that capital deployment will follow a typical construction timeline, spread through this year and next.
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Sean Kelley (Bank of America): Inquired about changes in international visitation and booking trends in Las Vegas. CEO Craig Billings noted international room nights are down but easily backfilled, and current booking trends remain healthy, with rates above market and group pace strong for 2026.
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David Katz (Jefferies): Asked about the competitive environment in Macau and how Wynn is responding. Management emphasized stable promotions and a focus on property quality, service, and new amenities to attract premium customers in a highly competitive segment.
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Robin Farley (UBS): Sought detail on the nature of delayed CapEx projects and how group bookings for 2026 are trending. Management specified the Encore Tower remodel as the largest delayed project and reported strong group demand for 2026, attributed to major convention bookings.
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Brandt Montour (Barclays): Requested clarification on the operational and financial impact of CapEx delays and the effect of new amenities on Macau’s expense profile. Management explained the timing of project resumption is uncertain due to tariff unpredictability and that incremental OpEx from new amenities is managed through cost efficiencies and expected revenue gains.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the pace and timing of resumed U.S. capital projects as tariff impacts evolve, (2) sustained demand trends in Las Vegas and Macau amid short booking windows and competitive pressures, and (3) the progression of Wynn Al Marjan Island’s construction milestones. Additionally, we will track the effectiveness of new amenities in driving incremental revenues and the company’s ability to maintain cost discipline in the face of wage and input cost inflation.
Wynn Resorts currently trades at a forward P/E ratio of 19.7×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report.
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