Canterbury Park Q3 Earnings Decline Y/Y as Casino Revenues Slip

Shares of Canterbury Park Holding Corporation CPHC have risen 3.1% since reporting third-quarter 2025 results, outpacing the S&P 500 index’s 0.8% growth over the same period. However, the stock has fallen 2.9% over the past month, lagging the S&P 500’s 3.6% rally.Canterbury Park generated net revenues of $18.3 million in the latest quarter, down 5% from the year-ago period. Net income plummeted 75.9% to $487,000 from $2 million, as last year’s results benefited from a $1.7-million gain tied to a land transfer. Diluted earnings per share declined to 10 cents from 40 cents, while adjusted EBITDA decreased 14.2% to $2.8 million. The company cited reduced casino revenues, affected by lower hold early in the quarter, and stable but lower-spending patron behavior as the key drivers of the year-over-year downturn.Canterbury Park Holding Corporation Price, Consensus and EPS Surprise  Canterbury Park Holding Corporation price-consensus-eps-surprise-chart | Canterbury Park Holding Corporation QuoteOther Key Business MetricsCasino revenues, the company’s largest segment, dropped 9.7% year over year due to increased competition and lower-than-average hold rates. Pari-mutuel revenues slipped 2.7%, and other revenues declined 11.1%, partially reflecting one fewer live race day and reduced admissions tied to concerts.Food and beverage operations were a bright spot, posting 13.1% growth, supported by the rollout of a point-of-sale system that improved service speed, and boosted transactions and average spend on race and event days. Operating expenses were effectively flat, declining 0.6% year over year, as lower Purse expenses offset increased advertising, marketing and depreciation tied to recent capital improvements.The company also reported a $936,000 loss from equity investments, primarily related to depreciation, amortization and interest expenses from its Doran Canterbury joint ventures. However, this represented an improvement from the prior-year loss of $1.4 million, reflecting a better leasing performance at the Doran I property following its 2025 reopening.Management CommentaryManagement emphasized that quarterly results aligned with trends for the first nine months of 2025, highlighting stable casino patron counts despite lower per-patron wagering. Executives pointed to strong momentum in food and beverage, and underscored ongoing efforts to improve operational efficiency, especially in labor, the company’s largest expense category.Management also highlighted the strong initial performance of the newly opened Boardwalk Kitchen & Bar, describing the venue’s customer response as “very positive.” The establishment, situated next to the track with a large outdoor patio, reinforced the company's belief in the unique value of its entertainment-driven real estate development strategy.Broader commentary underscored Canterbury Park’s belief that its strong balance sheet and consistent cash flow are not fully reflected in the stock’s current valuation. As of quarter-end, the company reported nearly $17 million in cash and short-term investments, and more than $20 million in tax-increment-financing receivables expected to begin paying out late 2025 or early 2026. Management estimates more than $10 per share of value attributable to cash, TIF receivables and real estate joint ventures, excluding approximately 50 acres of land held for future development.Factors Influencing the Headline NumbersA combination of external and operational factors influenced the quarterly performance. Increased regional competition weighed on casino revenues, while a below-average hold rate early in the quarter pressured the results. The racing segment faced the impacts of one fewer live race day, which flowed through to both pari-mutuel and other revenue categories.On the expense side, although salaries and benefits remained flat, heightened marketing and advertising increased costs, reflecting the company’s efforts to drive traffic and engagement. Depreciation also rose, consistent with the completion of capital projects. The absence of the prior-year land-transfer gain created a difficult comparison, significantly affecting year-over-year earnings.Other DevelopmentsThe quarter featured substantial progress across the Canterbury Commons development initiatives. The barn relocation and redevelopment project was completed, and Swervo Development continued construction on a 19,000-seat amphitheater set to open for the 2026 summer season. A new road adjacent to the amphitheater was also completed, unlocking development potential for roughly 25 acres of prime land.Residential and commercial updates included strong leasing activity at the Triple Crown Residences phases I and II, with 93% of available units leased in phase II and more than half leased in phase I. At The Omry senior apartments, 98% of units were leased. The Winners Circle development saw positive performance among newly opened commercial tenants, and a new 28,000-square-foot office building was completed, with 66% of space leased.Additionally, Boardwalk Kitchen & Bar, developed through a joint venture and opened in late June, recorded strong early traction and robust community engagement, with growing social media buzz and active event programming. Residential development by Pulte Homes continued, with the final phase of row home and townhome construction on track for completion before winter.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Canterbury Park Holding Corporation (CPHC): Get Free ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks