MSG Leisure inventory drops over 13% to file low as increased prices drag earnings

Madison Sq. Backyard Leisure (NYSE:MSGE) inventory dropped 13.7% to an all-time low on Wednesday after the corporate posted Q1 earnings that missed estimates, harm by increased prices at MSG Networks and Tao Group Hospitality.

Q1 EPS was -$1.30, with whole adj. working revenue down ~73% Y/Y at $2.8M.

MSG Networks adj. working revenue decreased 41% to $32.9M resulting from lower in revenues and better direct working bills.

Tao Group Hospitality adj. working revenue fell 44% to $14.6M resulting from increased direct working and SG&A bills.

MSG Leisure (MSGE) stated it’s on monitor to open MSG Sphere at The Venetian in Las Vegas in H2 2023.

However the firm raised its building value estimate to ~$2.175B vs. prior estimate of ~$2B, reflecting ongoing influence of excessive inflation, international provide chain pressures and general complexity of the mission. Precise building prices incurred by way of Sept. 30 have been ~$1.78B.

Remaining building prices will probably be funded with money readily available and money move from operations, together with the influence of the agency’s plans for a value discount program and to scale back or defer sure discretionary capital tasks.

Shares of MSG Leisure (MSGE) declined ~46% YTD.

The inventory is at excessive danger of performing badly, to the purpose that it will get a Promote score from SA Quant.