LAS VEGAS (KLAS) — Red Rock Resorts turned in its second-best quarter in company history, reporting earnings of $188.9 million on $422.2 million in net revenue.
And it happened as big changes continued for the giant in locals casinos.
Executive VP, CFO, and Treasurer Stephen Cootey said Red Rock continues offering new amenities including “the recent opening of the Boulder Station food court and the recent announced transformation of our Red Rock property’s buffet space into a new VIP high limit table room, a new casino bar and two new exciting restaurant concepts.”
The company is turning the page on its Las Vegas operations, concentrating on under-construction Durango Station and a growing list of projects in development around the Las Vegas valley. Those include:
- Property at Cactus Ave. and Interstate 15, where the company is purchasing 127.7 acres to expand property it already owns there. That property cost the company $172 million.
- Property at Losee Road and the 215 Beltway in the north valley. The company is working on a purchase and sale agreement for 67 acres there.
- Property at Skye Canyon in the northwest valley
- Property at Inspirada in the south valley
Red Rock also announced a cash dividend of 25 cents per share.
Executives and investors on the second-quarter earnings call spent little time writing epitaphs for Texas Station, Fiesta Rancho and Fiesta Henderson. Executives did say there have been “an extraordinary number of calls” expressing interest in the properties.
“While these properties have been an important part of our business over many years, our team’s ability to recapture the majority of the gaming play from these properties has made the reopening of these properties uneconomic,” Cootey said. “While the decision was difficult, it was the correct one, and will enable the company to move more quickly to develop and deliver the next generation of Station Casinos resorts to the residents of and visitors to North Las Vegas, Henderson and the rest of the Las Vegas valley.”
Instead, investors were asking for hints on which land it might develop first when Durango Station is up and running. Durango Station — a $750 million project on 71 acres at Durango Drive and the 215 Southern Beltway — will open in the fall of 2023. “The project is progressing nicely and we expect to top out later this fall,” Cootey said.
But Red Rock Resorts Director Lorenzon Fertitta and his brother, Station Casinos Chairman Frank Fertitta III, would only say that demographics and demand would be the determining factors.
“We want to get Durango open, and then we’ll be ready to start on the next project after that,” Frank Fertitta III said.
Durango Station is expected to provide the cash flow to build at the new sites without adding debt, they said. The Fertitta brothers are gushing with optimism about the prospects for the Durango property. It’s in one of the fastest growing areas of the valley, and they won’t immediately have any casinos within five miles to compete.
“We have an unparalleled growth story,” Cootey said, repeating the company’s intention to double their portfolio of resorts by 2030. The investment in real estate establishes a “growth pipeline” for the company.
Red Rock Resorts appears to be sticking to its plan to abandon buffets with the announcement of repurposing the Red Rock Resorts buffet, favoring new restaurants and other amenities. At Santa Fe Station in the northwest valley, a wall has been built across the front of the buffet area.