LAS VEGAS (KLAS) — Golden Entertainment had some dirty laundry to air as the company reported second-quarter earnings on Thursday.
A problem with linen service providers cut into profits at The STRAT Hotel, Casino & Skypod, according to Charles Protell, president and chief financial officer at Golden Entertainment.
“We estimate this cost us over 15,000 room nights and $2- to $3 million of (earnings) at The STRAT during the second quarter,” Protell told investors on Thursday. “We have since transitioned to alternative linen suppliers and do not anticipate similar issues going forward.”
It was the biggest news nugget out of Golden Entertainment’s earnings call as the company continues to produce solid earnings with their P.T.’s taverns, slot routes and casino operations including The STRAT, Arizona Charlie’s casinos along with properties in Laughlin, Pahrump and a resort in Maryland.
Earnings — reported by the company as EBITDA (earnings before interest, taxes, depreciation and amortization) — were down 18% compared to the second quarter of 2021. But Golden Entertainment is satisfied with their position as the largest tavern and slot route operator in Nevada, taking advantage of stock prices to buy back shares and pay down debt.
Overall, Golden Entertainment reported $75 million in earnings on second-quarter revenue of $289.4 million. Golden is maintaining profit margins over the last four quarters that exceed 2019 performance levels, according to Chairman and Chief Executive Officer Blake Sartini.
Investors asked if the company was looking to acquire a new property, but Sartini and Protell said nothing is on the horizon — at the moment.
Golden owns three properties in Laughlin: Aquarius Casino Resort, the Edgewater Hotel and Casino, and the shuttered Colorado Belle. Sartini said Golden is continuing to maintain the Colorado Belle’s gaming license and he thinks the property is a unique opportunity when the time is right.
But for now, Golden is going to stay flexible — a strategy that might help them with the threat of a recession building.
Protell said the company’s Las Vegas properties “draft” off the returning convention business, providing rooms to conventioneers even though conventions aren’t a big part of its own business offerings.
He said the upside is big for hotels like The STRAT — and assured investors that laundry wasn’t going to be a problem again.