Wynn Resorts stock fell early Wednesday on mixed second-quarter results that were dragged down by ongoing closures in Macau.
Wynn (ticker: WYNN) said it lost 83 cents a share on revenue that fell by more than 8% from the year-ago period to $908.8 million. Analysts were looking for a per-share loss of $1.11 on revenue of $980.9 million.
The company's domestic resorts in both Las Vegas and Boston recorded an uptick in revenue from last year. But Macau continued to weigh on the top line, with revenue falling at its two properties there. The Chinese gaming hub has long struggled with wide-ranging pandemic-related lockdowns that have restricted travel, although there have been glimmers of hope these may ease .
The picture was much the same in Wynn's first quarter, reported in May.
Wynn stock slipped 1.6% to $64.95 in recent trading; the shares are off more than 22% since the start of the year.
On the plus side, ongoing strength at Wynn's U.S. properties demonstrate that consumers are still freely spending, even as concerns about inflation and economic uncertainty weigh on wallets. As J.P. Morgan's Joseph Greff writes, "WYNN is not presently seeing any consumer slowdown from a weaker macro backdrop, similar to peers that have reported this earnings season."
However, the real issue is, not surprisingly, Macau, given that there's relatively low visibility into when the situation there could change—creating an ongoing overhang for the stock.
"As for Macau, we see no improvement until the 2023 at the earliest (not that we, or anyone, has a crystal ball for when that market starts to improve) and, quite honestly, it's hard to have much conviction in 2023 Macau estimates," writes Greff.
Last month, Barron's also argued that 2023 was likely the best-case scenario, while noting that Las Vegas Sands (LVS) may have sold off too far. That stock is up more than 5% since, while the S&P 500 has crept 0.5% higher.