Wednesday, Landry's Restaurants, Inc. (LNY) reported a decline in net income for the second quarter that missed analysts' estimates, hurt mainly by lower revenues.
For the quarter, net income was $8.27 million or $0.50 per share, down from $13.87 million or $0.85 per share in the same quarter last year. Income from continuing operations declined to $8.3 million or $0.51 per share from $14.0 million or $0.86 per share in the year-ago quarter.
Excluding certain one-time items, earnings from continuing operations was $0.23 per share, lower than $0.74 per share in the prior-year quarter. On average, three analysts polled by Thomson Reuters expected the company to earn $0.31 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter were $282.0 million, down from $308.1 million last year. Analysts expected the company to report revenue of $283.56 million for the quarter.
For the quarter, same-store sales for the company's restaurants were down 8%. Revenues from gaming operations declined 15.1% to $56.5 million. Average daily rate, or ADR, for hotel rooms in the quarter declined about 23% compared with the same period last year, as a result of increased competition for declining visitor stays.
The company noted that, during the period, consolidated pre-tax interest expense rose to $28.5 million from $19.9 million last year, due to higher interest expense resulting from the refinancing and additional borrowings associated with the construction of the tower at the Golden Nugget in February.
For the first six months, net income edged down to $15.34 million or $0.95 per share from $15.39 million or $0.94 per share last year. Year-to-date, revenue declined to $538.30 million from $600.42 million in the same period last year.
Rick Liem, executive vice president and Chief financial officer, stated, "We remain encouraged with the restaurant and hospitality division results given the difficult economic circumstances. However, gaming division results continued to deteriorate through the second quarter, with no signs of improvement in July, as we battle an increasingly competitive marketplace in Las Vegas."
Further, the company expects that for the fiscal 2009, its restaurant and hospitality division would generate adjusted earnings before interest, tax, depreciation and amortization, or EBITDA, between $130.0 million and $135.0 million, while the gaming division would generate adjusted EBITDA between $43.0 million and $48.0 million. Therefore, the company expects consolidated adjusted EBITDA for the full year to range between $173.0 million and $183.0 million.
LNY is currently trading at $9.23, down 8.34%, on the NYSE.
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