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Marriott Vacations (VAC) Q4 Earnings Miss Estimates, Up Y/Y

Published 02/26/2020, 09:36 PM
Updated 07/09/2023, 06:31 AM

Marriott Vacations Worldwide Corporation (NYSE:VAC) reported mixed results for fourth-quarter 2019, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.

Adjusted earnings of $2.43 per share lagged the consensus mark of $2.58 by 5.8% but improved 63% year over year.

Quarterly revenues were $1,145 million, which beat the Zacks Consensus Estimate of $1,134 million by 1% and surged 9% from the year-ago quarter’s figure. The upside can be attributed to improvement in vacation ownership contract sales.

Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise

Segmental Performances

Vacation Ownership: Consolidated Vacation Ownership contract sales totaled $394 million, up 10% year over year on a combined basis. Revenues, excluding cost reimbursements, increased 9% year over year. Consolidated contract sales rose 10% on a year-over-year basis. Legacy-MVW contract sales amounted to $223 million, up 9.3% year over year. Legacy-MVW North America volume per guest (VPG) amounted to $3,499 million, up 9% year over year.

Rental revenues in the fourth quarter were $139 million, up nearly 18.8% from year-ago quarter’s figure.

On a combined basis, the segment’s adjusted EBITDA increased 16.8% year over year to $226 million in the fourth quarter. Adjusted EBITDA margin improved 60 basis points from the year-ago quarter’s figure, excluding cost reimbursements.

Exchange & Third-Party Management: The segment’s revenues totaled $103 million in the quarter, down from year-ago quarter’s figure of $121 million. Total Interval Network active members were 1.7 million at the end of the quarter and average revenue per member was $38.4.

The segment’s adjusted EBITDA, on a combined basis, was $50 million. The figure declined 13.8% year over year (after excluding VRI Europe from year-ago quarter’s level).

Corporate and Other results

The segment, which primarily consists of general and administrative costs, improved $6 million year over year, courtesy of synergy savings and decline in compensation related expenses. This was partially offset by normal inflationary cost increases.

Expenses & EBITDA

Total expenses in the quarter amounted to $991 million, up 5.5% year over year. Rise in expenses were caused by an increase in the cost of vacation ownership products, and high rental and financing costs. Higher marketing and sales expenses, and management and exchange costs affected total costs. The company’s adjusted EBITDA in the fourth quarter was $207 million, which surged 15% from the year-ago quarter.

Balance Sheet

Cash and cash equivalents, as of Dec 31, 2019, was $287 million compared with $231 million as of 2018 end. Inventory was $846 million. The company had $4.1 billion in debt outstanding (net of unamortized debt issuance costs) at the end of the fourth quarter.

2020 Outlook

The company’s 2020 guidance does not include any additional impact from the coronavirus outbreak.

For 2020, the company expects adjusted earnings of $9.01-$9.72 per share. The Zacks Consensus Estimate for earnings is pegged at $9.01 for the year, which is below the company’s mid-point guidance of $9.36. Adjusted EBITDA is projected between $820 million and $860 million.

Zacks Rank & Peer Releases

Currently, Marriott Vacations carries a Zacks Rank #4 (Sell).

Hyatt Hotels Corporation (NYSE:H) reported better-than-expected fourth-quarter 2019 results. Notably, the company’s bottom line has surpassed the Zacks Consensus Estimate for the 16th straight quarter, while the top line has outpaced the same for the fourth consecutive quarter. Adjusted earnings came in at 47 cents per share, which outpaced the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported earnings of 62 cents per share. Total revenues were $1,275 million, beat the Zacks Consensus Estimate of $1,182 million and improved 12% from the prior-year quarter.

Choice Hotels International, Inc. (NYSE:CHH) reported better-than-expected fourth-quarter 2019 results. The lodging franchisor reported adjusted earnings of 92 cents per share, which beat the consensus mark of 84 cents and rose 4.5% year over year. Notably, this marked the eighth straight quarter of earnings beat. In the quarter under review, total revenues came in at $268.1 million. The figure increased 9% from the year-ago quarter’s level and topped the consensus mark of $258 million.

Hilton Worldwide Holdings Inc. (NYSE:H) reported fourth-quarter 2019 results, wherein both earnings and revenues came ahead of the Zacks Consensus Estimate. Hilton’s adjusted earnings of $1.00 per share surpassed the consensus mark of 95 cents and improved 6.4% on a year-over-year basis. Further, it came above management’s forecasted range of 91-96 cents per share. Revenues totaled $2,369 million, which surpassed the consensus mark of $2,337 million.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Choice Hotels International, Inc. (CHH): Free Stock Analysis Report

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