Churchill Downs Achieves Record Revenue Despite Q2 Net Income Decline
August 11, 2023
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Churchill Downs ($NASDAQ:CHDN) Incorporated is a publicly traded company based in Louisville, Kentucky, best known for its ownership of the legendary Churchill Downs racetrack. The company achieved a record revenue of 32% in Q2 of 2023, though its net income for the same period saw a 14% decline compared to the same period of the previous year. This decrease in net income can be attributed to several factors, including increased operating expenses, higher interest expense due to increased debt, and an overall decline in the racing and gaming industry. Despite this, Churchill Downs still managed to outperform many competitors and make significant strides in its overall growth. The company has continued to invest in a number of initiatives that have helped it remain competitive in the industry, such as technology upgrades, increased marketing efforts, and improved customer service. These investments have been instrumental in helping Churchill Downs remain a leader in the racing and gaming industry.
Additionally, Churchill Downs has looked to diversify its portfolio and expand into new areas. This includes a captive insurance entity that helps protect the company’s assets and a joint venture with an online gaming platform, which could provide additional revenue streams in the future. Overall, Churchill Downs Incorporated has continued to experience growth and success despite the adverse conditions of Q2 and is well-positioned to continue doing so in the coming years.
Earnings
In its latest earnings report for FY2023 Q2 as of June 30 2021, CHURCHILL DOWNS Inc. reported a record-breaking total revenue of 515.1M USD, though their net income declined to 108.3M USD. This marks a 68.1% decrease compared to the same period last year, though total revenue has seen an 11.6% growth over the same period. Over the past three years, total revenue for CHURCHILL DOWNS has been growing steadily, reaching from 515.1M USD to 768.5M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Churchill Downs. More…
| Total Revenues | Net Income | Net Margin |
| 2.19k | 356.7 | 15.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Churchill Downs. More…
| Operations | Investing | Financing |
| 559.1 | -3.33k | 1.31k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Churchill Downs. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.58k | 5.72k | 11.4 |
Key Ratios Snapshot
Some of the financial key ratios for Churchill Downs are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 28.8% | 137.3% | 31.9% |
| FCF Margin | ROE | ROA |
| -2.0% | 56.1% | 6.6% |
Price History
The stock opened at $120.6 and closed at $121.8, up 1.1% from the previous closing price of $120.4. This growth was mainly attributed to a surge in online and sports betting activities, which made up a larger portion of total revenue than the previous year. The company was also able to offset the decline in pari-mutuel revenues from its racetracks with higher revenues from its media and gaming segments. Live Quote…
Analysis
At GoodWhale, we have thoroughly analyzed the fundamentals of CHURCHILL DOWNS. According to our Star Chart, CHURCHILL DOWNS is strong in dividend and growth, with medium profitability and weak asset. Additionally, we have assigned a health score of 7/10 to CHURCHILL DOWNS due to its cashflows and debt, indicating that it is capable of paying off debt and funding future operations. Based on these metrics, we classify CHURCHILL DOWNS as a ‘gorilla’, meaning that the company has achieved stable and high revenue or earnings growth due to its strong competitive advantage. This makes it a very attractive investment target for investors looking for long-term value and stability. More…
Peers
It is headquartered in Louisville, Kentucky, United States. The company was founded in 1875 by Col. Meriwether Lewis Clark Jr. As of 2019, Churchill Downs Inc operates six horse racing facilities, including the world-renowned Churchill Downs Racetrack. The company also owns and operates the Kentucky Derby Museum and the Kentucky Oaks Museum. In addition to horse racing, Churchill Downs Inc also offers gaming and entertainment experiences through its subsidiaries, including Big Fish Casino, Fair Grounds Race Course & Slots, and Hawthorne Race Course.
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Summary
Churchill Downs Incorporated experienced a record high in net revenue for the second quarter of 2023, with an increase of 32% compared to the same quarter of the previous year. Despite this success, the company reported a decline in net income. This could be due to a number of factors, such as higher operating expenses or increased competitive pressures.
Investors should examine these factors and any other relevant information before investing in Churchill Downs. Furthermore, it is important to consider the company’s long-term potential and the current market conditions before making an investment decision.
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