Penn Entertainment Inc. Reports Strong Q2 Earnings Amid ESPN Deal

News

John Smaug

August 10, 2023

Penn Entertainment Inc., the online-sports-betting and gaming facilities company, exceeded profit and revenue expectations in its second-quarter report. This success was largely driven by its food, beverage, and hotel business, which compensated for some weakness in gaming.

Impressive Stock Performance

Following the announcement of its deal with ESPN and the sale of its Barstool Sports stake, PENN stock surged 16.3% in premarket trading. This brought the shares to a three-month high, marking their best performance since July 15, 2020, when they experienced an 18.1% jump.

Strong Financial Performance

Penn Entertainment reported a remarkably increased net income for the second quarter. The figure more than doubled from $26.1 million (15 cents per share) in the same period last year to an impressive $78.4 million (48 cents per share). This exceeded the FactSet consensus of earnings per share of 42 cents.

Additionally, the company boasted a revenue growth of 2.9%, reaching $1.675 billion, surpassing the FactSet consensus of $1.665 billion.

Segment Performance

While gaming revenue experienced a slight decline of 2.5% to $1.29 billion, other sectors within Penn Entertainment thrive. Food, beverage, hotel, and other revenue witnessed an impressive surge of 26.8% to reach $382.0 million.

CEO's Remarks

Jay Snowden, Chief Executive of Penn Entertainment, commented on the solid performance: "The company experienced stable property-level performance this quarter with each month showing sequential improvement. Additionally, we are excited to have successfully re-launched our sportsbook app, which features major product improvements that significantly upgrade the user experience, including streamlined navigation, faster load times, expanded wagering markets, enhanced promotions, and deeper media integrations."

Barstool Sports Stake and Rebranding

Penn Entertainment recently announced its complete divestment of its stake in Barstool Sports. As a result, the current Barstool Sportsbook will be rebranded as ESPN Bet in the fall of 2023.