Shares of Churchill Downs (NASDAQ: CHDN) are moving higher Thursday after the gambling company released mixed second-quarter results late Wednesday. The stock may be rising today due to the operator's shareholder rewards program expansion.
In place of a similar amount authorized in March, the owner and operator of the legendary racecourse of the same name in Kentucky announced that its board of directors had approved a new $500 million share repurchase plan.
"The new share repurchase program includes and is not in addition to any repurchase authority remaining under the prior authorization,” according to a statement. “Share repurchases may be made at management’s discretion from time to time in the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time.”
Apart from being a loyal shareholder, Churchill Downs also pays a dividend, which has increased over the past ten years.
Churchill Downs Implements Its Plans for Buybacks
Companies welcome repurchasing their shares due to flexibility and tax savings for investors. They are free to buy those things on the open market whenever they like, and they are not required by law to repurchase the specified sum.
Churchill Downs' recent buyback activity demonstrates that the company is fulfilling its commitments to lower the number of outstanding shares. Under the prior repurchase plan, the operator had "$184.2 million of repurchase authority remaining" after repurchasing 2.56 million shares of its equity during the second quarter at a total cost of $250.4 million.
Churchill Downs of Kentucky, which just purchased the majority of Casino Salem, a gambling establishment in the town of the same name in New Hampshire, is not concerned with paying back shareholders. By the end of the second quarter, it had $182 million in cash on hand and 4.2x leverage.
Jeffrey Stantial, an analyst at Stifel, wrote in a report to clients that the gaming company's "repurchase activity accelerated sharply following recent stock underperformance," suggesting it was buying its shares at a discount.
The Odds and Ends of Churchill Downs
Churchill Downs recorded record revenue in the second quarter, aided by the May Kentucky Derby. The operator said earlier Thursday that the Derby Week slate would be broadcasted more widely, which may lead to higher betting volume in the years to come.
The 152nd Kentucky Oaks, which will feature the top three-year-old fillies, will air on NBC and Peacock on Friday, May 1, 2026 at 8 p.m. ET, the corporation stated.
“By moving the Kentucky Oaks to primetime, we’re giving one of horse racing’s most treasured traditions the national stage it deserves,” said Churchill Downs CEO Bill Carstanjen. “This decision is rooted in our commitment to growing the sport, reaching new audiences, and creating unforgettable experiences for our fans.”