Record Second Quarter Revenue for Churchill Downs Inc.

Behind a solid Kentucky Derby Week and a record performance from its gaming operations as the country emerged from COVID-19 restrictions, Churchill Downs Inc. reports record second quarter net revenue and strong adjusted earnings.

In a July 28 earnings report, CDI notes net revenue of $515.1 million for the months April through June of this year as the company's gaming division delivered record net revenue ($186 million) and record adjusted earnings ($119.8 million) for the quarter.

Along with the strong performance of its gaming properties, CDI reports that its Derby Week saw strong ticket sales, sponsorship revenue, and margins despite some capacity restrictions. The company's racing operations, which includes historical horse racing, saw net revenue of $175.9 million for the quarter.

Because of the pandemic and changes to how the company defines its operations, comparison to previous quarters is difficult.

At the same time CDI released its second quarter earnings report after trading concluded on Wall Street July 28, the company also put out releases on seating upgrades for its flagship Churchill Downs as well as plans for a hotel at its Derby City Gaming as CDI's historical racing operations continue to thrive as Derby City Gaming delivered record net revenue, adjusted earnings, and margins in the second quarter.

BLOODHORSE: Churchill Plans Three Capital Improvement Projects

CDI plans a $76 million expansion at Derby City Gaming that will include construction of a hotel, additional gaming positions, and expansion of the current amenities at the facility in order to better serve and attract guests.

The project will add 135,000 square feet of new space to the facility and open with 200 additional gaming positions. The new space will be able to ultimately accommodate up to 400 new gaming positions. The expansion will include a VIP gaming space, a new sports bar, a stage for live entertainment, and an upscale-casual restaurant and bar to create a variety of new food and beverage options for gaming and hotel guests. 

The adjoining five-story hotel tower will include 123 rooms with 108 standard guest rooms, 14 corner suites, and a VIP suite. The Derby City Gaming hotel also will allow guests to take advantage of unique hospitality and Kentucky Derby Presented by Woodford Reserve (G1) ticket pairing options.

"Derby City Gaming continues to exceed the company's expectations," said company's CEO Bill Carstanjen. "The expansion of this premier gaming property is intended to create an elevated experience for our guests that is inclusive of all their hospitality needs and is anticipated to fuel ongoing growth in purse contributions for Churchill Downs Racetrack."

Earlier this year Churchill abandoned plans to construct a hotel on the racetrack property.

Construction on the Derby City Gaming project is scheduled to begin in early 2022 pending rezoning review and approval by the city of Louisville. The expanded gaming floor is targeted to open in late 2022 and the hotel is expected to open in the spring of 2023. The project is expected to provide for approximately 400 construction jobs and approximately 60 new permanent jobs at Derby City Gaming.

Churchill stock closed Wednesday at $188.03 a share, down 16% from three months ago ($218.95).