Photo Credit: Wolfgang Staudt

Wynn Resorts (WYNN) – Consumer Discretionary – Hotels, Restaurants, & Leisure | Reports February 8, After Market Close

Wynn Resorts, the developer and operator of luxury hotels and casinos, is scheduled to report Q4 2015 earnings February 11, after the market closes. The company currently operates in Las Vegas and China’s mainland peninsula, Macau. In the past year WYNN shares have declined 59% from economic turmoil in China impacting tourism and consumer spending. This quarter, the Estimize community is calling for EPS of $0.78, 4 cents higher than Wall Street, and revenue expectations of $962.94 million, only $2 million ahead of the Street. Compared to Q4 2014, this represents a projected YoY decline in EPS and revenue of 34% and 14%, respectively.

The city of Macau, otherwise known as the “Las Vegas of Asia,” heavily depends on gaming traffic and Gross Gaming Revenues (GGR) to support its economy. In January, GGR fell 21% YoY to $2.3 billion and has declined every month since June 2014. To make matters worse, analysts are expecting the Macau economy to fall 14% in 2016 due to struggling gaming revenues. 

Wynn has been working on its struggling operations in Macau and is prepared to launched a new luxury hotel to stimulate growth in the region. Company guidance is projecting Wynn Palace to gross over $700 million in annual revenue. That said, the forecasted figure is contingent on regulations regarding gambling tables and non-gambling space.

Despite strong headwinds in Macau and struggling share prices, Wynn has been generous in returning to shareholders. In the past 2 months, CEO, Steve Wynn, issued an expansive stock buyback program where he repurchased $63.9 million in shares in December 2015 and $31.9 million in shares in January 2016. Wynn’s exuberance is a possible indicator that company is poised for a bounce back year.