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Hurricane and economy take toll on Landry's

11 November 2008

LAS VEGAS, Nevada -- A Gulf Coast hurricane and an emerging recession conspired to swamp Landry's Restaurants Inc. in the third quarter, resulting in quarterly losses of $17.1 million, or $1.12 per share, for the parent company of the Golden Nugget hotel-casinos in Las Vegas and Laughlin.

Houston-based Landry's reported the grim news Monday in a brief conference call to discuss earnings.

The company, which owns 174 properties, mostly restaurants such as Rainforest Cafe, The Chart House and other brands, was walloped on two sides during the quarter ended Sept. 30.

Hurricane Ike wiped out some of its most lucrative restaurants in Galveston and Kemah, Texas, and disrupted electricity at many more in Houston.

Landry's Chief Financial Officer Rick Liem estimated the total storm-related costs at $7.8 million.

"The Kemah and Galveston properties were a significant driver of our overall performance in 2008," Liem said.

And the recession pushed down same-store sales 2 percent companywide and contributed to a 3.3 percent decline in revenue from the Golden Nuggets, which generated $60.6 million during the quarter.

Liem said lower occupancy and room rates at the Nuggets hurt the Nevada results.

"Revenue decreased due to reduced slot activity, lower occupancy and average room rates, offset by increased food and beverage revenues," Liem said.

But the company is still pressing forward with a new hotel tower at the Las Vegas Nugget.

"We anticipate completing the tower in late '09 or early 2010," he said.

Although The Associated Press calculated loss-per-share at $1.12, Landry's reported the losses differently.

The company reported loss from continuing operations at $7.7 million, or 50 cents per share. That's a bigger loss than the 17 cents per share loss in third quarter of 2007.

Landry's shares finished the day on the New York Stock Exchange at $11.35, a decrease of 34 cents, or 2.91 percent.