Durango’s success paves way to record Red Rock quarterly results

Riding the success of its newest resort property, Durango, Red Rock Resorts Inc. posted record second-quarter results Tuesday, forging back-to-back record quarters for the city’s dominant locals chain and significantly beating Wall Street analysts’ expectations.

The company posted net income of $108.3 million — a 55.1 percent improvement over the $69.8 million reported in the same period in 2024 — or 95 cents per share, on revenue of $526.3 million for the quarter that ended June 30. In the same period a year ago, Red Rock posted 59 cents a share on revenue of $486.4 million.

The company also announced it will pay a 25-cent-per-share dividend on Sept. 30 to shareholders of record on Sept. 15.

The company beat consensus Wall Street revenue estimates by 8.4 percent.

Red Rock’s results affirmed that the locals market appears to be outperforming Strip properties in the summer months after Boyd Gaming Corp. last week also reported strong second-quarter results for its locals properties.

Since it opened in December 2023, Durango has added around 108,000 people to the Red Rock customer database and Red Rock President Scott Kreeger said many of them are younger than the average Red Rock customer.

“I think that Durango is catering to a younger (demographic),” Kreeger told industry analysts in Tuesday’s earnings call.

An industry hangout

“We tend to see a lot of industry folks coming off the Strip and stopping off at Durango maybe on the way home,” he said. “So we have a little bit more visitation later in the day at Durango. I think it’s a function of the incredible food and beverage programming we have there and that it’s kind of a lifestyle-oriented property and you’re seeing it younger.

“The location is unbelievable, added Chairman and CEO Frank Fertitta III. “It’s a growing area of the valley, both residentially and commercially. There’s a lot of activity going on around there.”

Stephen Cootey, Red Rock’s executive vice president, chief financial officer and treasurer, said Durango customers are providing a greater spend per customer than those at other Station Casinos properties.

Earlier in the call, Cootey indicated Durango has been one of the company’s most profitable properties to date.

“Durango continues to expand the Las Vegas locals market, drive incremental play from our existing customer base, and attract new guests to the Station Casinos brand,” he said. “The property once again demonstrated strong momentum within the quarter with increased visitation, higher spend per visit, and elevated net theoretical win from our carded customers. The resort remains on a solid trajectory and is on pace to become one of our highest margin properties delivering a return net of cannibalization of over 50 percent through the second quarter of 2025.”

Projects underway

The record results came despite construction disruptions at Durango, Sunset Station and Green Valley Ranch.

Construction is continuing on the Durango expansion. That project is adding more than 25,000 square feet of additional casino space, which includes a new high-limit slot machine area and bar. The project will introduce 230 new slot machines with 120 allocated to the high-limit room. As part of that phase, the company also is building a new covered parking garage with nearly 2,000 spaces, which will enhance customer access and provide infrastructure flexibility to support future growth of the property. The total project cost is around $120 million and is currently operating under a guaranteed maximum price contract with completion of the project expected in late December.

The company also is investing around $200 million for a complete refresh of hotel rooms at Green Valley Ranch and the property’s convention areas.

Work started in June with the majority of the rooms back in service by the end of the year.

Earlier this year, the company also announced plans to redesign the bingo hall at Sunset Station into a Stoney’s Rockin’ Country restaurant, bar and nightclub. The company already operates Stoney’s North Forty at its sister property, Santa Fe Station.

Red Rock shares, traded on the Nasdaq exchange, on Tuesday closed up 29 cents a share, 0.53 percent, to $55.01 a share on slightly-below-average volume.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.