PENN Entertainment’s first quarter saw modest year-over-year sales growth amid a challenging environment, with management pointing to severe winter weather and new market supply as headwinds impacting the company’s core retail casino operations. CEO Jay Snowden noted that “weather-impacted days in February across the portfolio were up over three times versus last year,” which affected gaming volumes and adjusted EBITDAR. However, retail gaming volumes rebounded in March, and ongoing capital investments, including new ESPN BET retail sportsbooks and enhancements to loyalty programs, helped drive engagement, particularly among VIP and mid-tier customers. Management was candid about the impact of one-time accounting benefits in the prior year and highlighted that trends improved as weather normalized, positioning the business on steadier footing heading into the second quarter.
Is now the time to buy PENN? Find out in our full research report (it’s free).
PENN Entertainment (PENN) Q1 CY2025 Highlights:
- Revenue: $1.67 billion vs analyst estimates of $1.7 billion (4.1% year-on-year growth, 1.6% miss)
- Adjusted EPS: -$0.25 vs analyst expectations of -$0.13 (92.3% miss)
- Operating Margin: 2.6%, up from -1.3% in the same quarter last year
- Market Capitalization: $2.66 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions PENN Entertainment’s Q1 Earnings Call
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Brandt Montour (Barclays) asked about shifts within digital guidance and iCasino contribution. CEO Jay Snowden said iCasino momentum could offset sports-betting softness, with further details on profitability to come in future quarters.
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Carlo Santarelli (Deutsche Bank) inquired about the timeline for lapping competitive headwinds and project disruptions. Head of Operations Todd George responded that year-over-year comparisons would remain noisy as new projects ramp, but the company expects minimal operational downtime.
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Shaun Kelley (Bank of America) questioned promotional spending trends in digital and cost leverage in retail. Snowden and George explained promotional levels were as planned, with organic cross-sell driving iCasino growth and labor remaining the primary expense pressure.
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Barry Jonas (Truist Securities) focused on catalysts from ESPN’s upcoming direct-to-consumer product and potential regulatory risks from skill-based games. Snowden expressed optimism about new ESPN integrations and stressed the need for regulatory parity for skill-based gaming.
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Ben Chaiken (Mizuho) asked about increased investment in iCasino marketing and financing flexibility for new projects. Snowden confirmed performance-based marketing would scale as retention and acquisition remained strong, and CFO Felicia Hendrix emphasized flexible financing options for upcoming developments.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the ramp and customer response to major property openings, (2) adoption rates and engagement metrics for the standalone Hollywood iCasino app and ESPN BET integrations, and (3) progress on managing cost pressures from labor, tariffs, and competitive supply. Regulatory outcomes in key states and the impact of new digital product launches will also be important markers for PENN’s performance.
PENN Entertainment currently trades at $18.37, up from $15.71 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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