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Red Rock Resorts (RRR) to Report Q3 Earnings: What's in Store?

Zacks Equity Research
·4-min read

Red Rock Resorts, Inc. RRR is scheduled to report third-quarter 2022 results on Oct 27, 2022, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 144.2%.

How are Estimates Placed?

The Zacks Consensus Estimate for third-quarter earnings is pegged at 50 cents per share, indicating a fall of 46.2% from 93 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $407.6 million. The metric suggests a decline of 1.7% from the year-ago quarter’s figure.

Red Rock Resorts, Inc. Price and EPS Surprise

 

Red Rock Resorts, Inc. Price and EPS Surprise
Red Rock Resorts, Inc. Price and EPS Surprise

Red Rock Resorts, Inc. price-eps-surprise | Red Rock Resorts, Inc. Quote

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Let's take a look at how things have shaped up in the quarter.

Factors at Play

Red Rock Resorts’ third-quarter performance is likely to have been impacted by supply chain and inflation-related issues. During the second quarter, the company witnessed price inflation in ordinary goods and services such as food, supplies, energy and construction costs. It witnessed higher costs due to labor shortages. During the second quarter of 2022, food and beverage expenses increased 18.3% year over year to $57.8 million. Selling, general and administrative expenses during the quarter came in at $90.2 million compared with $84.1 million reported in the prior-year quarter. Although the company emphasized cost-control measures and price adjustments to counter the same, increased costs in maintenance, modification, sports betting, marketing initiatives and investment projects are likely to have dented margins in the to-be-reported quarter.

Dismal contributions from Las Vegas operations are likely to get reflected in the company’s third-quarter top line. The Zacks Consensus Estimate for net revenues at Las Vegas operations is pegged at $412 million, suggesting a fall of 0.2% from the prior-year quarter’s figures.

However, attributes such as best-in-class assets and locations, unparallel distribution and scale and a solid organic development pipeline are likely to have aided the company’s performance in the third quarter. This and improved visitation and increased time on the device and spend per visit are likely to have aided the company’s third-quarter top line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Red Rock Resorts this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.

Earnings ESP: Red Rock Resorts has an Earnings ESP of -5.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.

RCI Hospitality Holdings, Inc. RICK has an Earnings ESP of +4.15% and a Zacks Rank #1.

Shares of RCI Hospitality have increased 15% in the past year. RICK’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 39.4%.

JAKKS Pacific, Inc. JAKK has an Earnings ESP of +3.25% and a Zacks Rank #3.

Shares of JAKKS Pacific have increased 67% in the past year. JAKK’s earnings surpassed the consensus mark in all of the trailing four quarters, the average surprise being 155%.

Cedar Fair, L.P. FUN has an Earnings ESP of +2.38% and a Zacks Rank #3.

Shares of Cedar Fair have declined 16% in the past year. FUN’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 5.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Zacks Investment Research