Golden Entertainment, operator of The Strat casino hotel near the Las Vegas Strip, has announced an increase in its share repurchase program. The NASDAQ-listed company boosted its buyback plan by $100 million, bringing the total available for share purchases to $131.4 million. This decision came alongside the release of its third-quarter earnings report. CEO Blake Sartini expressed optimism about the company’s future, stating, “We anticipate that business conditions will improve in the fourth quarter and, with our increased share buyback authorization currently at over $130 million, we expect to continue to use our liquidity to acquire our own shares throughout the year.”
Golden Entertainment, a leading operator of gaming taverns across the Las Vegas Valley, has a history of augmenting its share repurchase efforts. In July 2023, the company similarly increased its stock purchasing capacity by $100 million. Share repurchase programs are favored by companies as a tax-efficient method of returning capital to shareholders while offering flexibility. Despite no legal obligation to repurchase the full amount announced, Golden has consistently followed through on its buyback pledges, signaling confidence in a stock that is down 22.92% year-to-date.
In the third quarter alone, Golden repurchased 815,116 shares of common stock at an average price of $31.65 per share, totaling $25.8 million. In October, an additional 134,613 shares were bought for $4.2 million, bringing the year-to-date total to 1.94 million shares at an average price of $30.70 per share, amounting to $59.5 million.
The company’s balance sheet remains robust, partly due to its ownership of much of the real estate on which its gaming venues are situated. At the end of the third quarter, Golden had $68.6 million in cash and cash equivalents and a borrowing capacity of $240 million, compared to $399 million in outstanding liabilities. This financial stability suggests Golden can continue prioritizing shareholder returns, especially if earnings rise due to potential lower interest rates.
There have been recent speculations that Golden might sell and lease back one of its land-based casinos, though the company has not commented on these rumors. Such a transaction would enhance the firm’s cash reserves but introduce long-term rent obligations.
