As the neon lights of Las Vegas dimmed and the American markets shut their doors for the day, a hush settled upon the city of chance and spectacle. Yet, beneath the quietude, the wheels of fortune kept turning as MGM Resorts International, the titan of hospitality and entertainment, unveiled a fourth quarter performance that not only shattered records but emboldened the company’s voracious appetite for its own stock.
In the heart of the desert oasis, where the Las Vegas Strip unfurls its glittering tapestry, MGM emerged as a beacon of prosperity. Boosted in no small part by the exhilarating Las Vegas Grand Prix, which revved up November’s revenue, the venerable operator of destinations such as the Cosmopolitan reported an all-time high in both full-year and quarter revenue earnings. Its Las Vegas Strip establishments dazzled, with an EBITDAR cresting the billion-dollar wave to settle at a formidable $1.2 billion, a leap of 22% that propelled sales to $4.4 billion. The Strip, MGM’s kingdom where it reigns supreme, saw its coffers swell to $2.4 billion from $2.3 billion.
A leap in same-store net revenues marked a 10% climb from the year prior, soaring from $2.2 billion to $2.4 billion in an affirmation of MGM’s prevailing dominance. This surge in fortune, however, comes intertwined with the transition of the Mirage, a beloved name on the Strip, into the hands of Hard Rock International.
This was no mere stroke of luck at the tables; it was strategic mastery in the art of business. For years, MGM has been an ardent advocate of self-investment, a meticulous collector of its own equity, thus reducing shares outstanding while conveying a strong signal of self-belief to those with stakes in its future.
In a move of unwavering confidence, MGM unveiled a robust $2 billion buyback program the previous November. The fourth quarter saw the company retract $629 million of its shares, amassing a yearly total to $2.3 billion. With the dawning of 2024, roughly $2.2 billion remained at MGM’s disposal, earmarked for further repurchases from programs announced within the year.
Jonathan Halkyard, MGM’s financial maestro, struck an optimistic chord, “The considerable value we discern in our shares has us steadfast in capital return via share repurchases.” The new year witnessed the acquisition of an estimated 6 million shares worth $249 million, augmenting the impressive 54 million shares drawn back the previous year, cumulating in a staggering $7.1 billion of repurchases since 2021.
Amid these prosperous tidings, it’s salient to note the strategic nuance behind share buybacks: a tax efficiency that outshines dividends. Moreover, MGM stands apart from some of its contemporaries, holding back on the reinstatement of its quarterly payout—a measure truncated in the shadow of the COVID-19 crisis.
Across the seas in Macau, MGM’s foothold remains unyielding. Owning a lion’s share of MGM China, the company reveled in its triumphant rebound. The twin jewels of MGM’s crown in the special administrative region (SAR) dazzled, metamorphosing a stinging loss into a robust adjusted property EBITDAR of $262 million—a staggering 462% upsurge bringing in revenues of $983 million.
Yet, the narrative yielded a contrast when casting an eye upon MGM’s regional dominions across America. Despite the anticipated impact from the sale of Gold Strike Tunica in Mississippi, same-store sales endured a 7% descent. The echelons of MGM National Harbor in Maryland beckoned less high-rolling patrons, and labor disputes clouded MGM Grand Detroit’s blue skies, leading to a discernible drop in regional casino net revenue to $873 million—a step down from the former splendor of $991 million.
As the curtains close on a compelling quarter for MGM Resorts International, the engines of progress and the allure of reinvention promise to keep the name ablaze, a lustrous beacon on Wall Street, and on the fabled Las Vegas Strip.
