Penn National Gaming announced that it has changed its name to Penn Entertainment, after announcing mixed results for the second quarter. The company’s name change is meant to reflect the expansion of Penn’s business to include diverse sports betting, media assets and other changes.
“Today is an exciting day for us as we become Penn Entertainment, Inc.,” said Jay Snowden, the company’s president and CEO. “Over the past few years, Penn has transformed our business through a highly differentiated strategy focused on organic cross-sell opportunities, which is reinforced by our investments in market-leading retail casinos, sports media assets, owned technology, including a state-of-the-art, fully integrated digital sports and online casino betting platform, and an in-house iCasino content studio.
“Our new name maintains ties to our legacy while better reflecting our evolution into North America’s leading provider of integrated entertainment, sports content and casino gaming experiences.”
The announcement came as Penn revealed second-quarter results showing an 87 percent drop in net income year-over-year—$26.1 million, compared to $198.7 million for the same quarter a year ago. Those results reflect a $167 million share repurchase for the quarter, and as Snowden noted, net revenue of $1.6 billion, up 5.2 percent from the same quarter last year.
“We are pleased with our second-quarter results,” Snowden said. “Penn generated revenues of $1.6 billion and Adjusted EBITDAR of $504.5 million. Despite economic headwinds, we delivered consistent performance across our retail portfolio in the quarter and into July.
“In addition, last month, we successfully transitioned theScore Bet in Ontario to our own fully integrated, proprietary tech stack—reflecting a key achievement in our strategic roadmap. Our strong operating performance and balance sheet enabled us to opportunistically repurchase $167 million of stock in the quarter under our $750 million share repurchase authorization. Based on our second-quarter performance and our outlook for the remainder of the year, we are reiterating our 2022 revenue and adjusted EBITDAR guidance range of $6.15 billion to $6.55 billion and $1.875 billion to $2 billion, respectively.”
Snowden also highlighted a large increase in its mychoice player’s club database. “Our mychoice database has increased by over 1.2 million registrations over the last four quarters, driven by both our retail properties and new interactive offerings, providing significant opportunities for future growth,” he said.
“We continue to enhance the guest experience at our properties with new hospitality offerings including hotel remodels, new restaurant concepts, and Barstool-branded sportsbooks which have especially benefited our destination properties….
“Our interactive segment further expanded its reach with the launch of theScore Bet mobile app in Ontario on April 4. In July, we successfully deployed our proprietary in-house risk and trading platform in Ontario, which significantly enhances theScore Bet’s online betting capabilities, mobile product offerings and overall integrated media and betting ecosystem. This fall, we will introduce our new Parlay+ feature on theScore Bet for all major league sports.”
Finally, Snowden highlighted PENN’s omnichannel growth and the development of the company’s cashless wagering ability. “Our three C’s—cardless, cashless, and contactless technology—and omnichannel engagement continued to drive our growth,” Snowden said.
Analysts offered positive reports despite the drop in net income. “Penn’s fundamentals remain healthy,” wrote Joseph Greff of J.P. Morgan.
“We now arrive at a new year-end-2022 price target of $41, down from our prior $53. We like Penn’s value for patient investors and are maintaining our overweight rating and see too much pessimism baked into Penn, with decent value embedded in the shares (even on our below-consensus forecast) and a stellar liquidity profile and balance sheet position.”