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Marriott Vacations (VAC) Q3 Earnings Miss Estimates, Fall Y/Y
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Marriott Vacations Worldwide Corporation (VAC - Free Report) reported mixed results for third-quarter 2020, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. However, both top and bottom lines declined year over year due to the ongoing pandemic.
Q3 Earnings and Revenues
In the quarter under review, adjusted loss per share came in at 81 cents, wider than the Zacks Consensus Estimate of a loss of 60 cents. In the prior-year quarter, the company reported adjusted earnings of $1.97 per share.
Total revenues of $649 million beat the consensus mark of $609 million by 6.6%. However, the top line declined 39.1% on a year-over-year basis.
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Vacation Ownership: During the third quarter, the segment’s revenues declined 39.3% year over year to $571 million compared with $940 million in the prior-year quarter. The decline can be primarily attributed to lower resort occupancies resulting from the coronavirus pandemic.
Revenues, excluding cost reimbursements, fell 56% year over year due to a 9% decline in financing revenues, partially offset by 4% growth in management fees.The segment’s adjusted EBITDA came in at $28 million compared with $195 million in the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues totaled $71 million in the third quarter, down 36% from $111 million in the prior-year quarter. The decline can be primarily attributed to lower exchange and rental transactions due to the impact of the coronavirus pandemic.
During the third quarter, total Interval Network active members declined 2% (compared with the previous quarter) to 1.5 million, while interval International average revenue per member fell 10% to $36.76. The segment’s adjusted EBITDA declined 31.1% year over year to $31 million.
Corporate and Other results
General and administrative costs improved $25 million year over year, courtesy of synergy savings and a decline in compensation-related expenses. It also included $5 million of credit under the CARES Act legislation, thereby motivating the company to pay associates' benefit costs while not working.
Expenses & EBITDA
Total expenses in the quarter declined 32.4% year over year to $673 million compared with $996 million reported in the year-ago quarter.
The company’s adjusted EBITDA in the third quarter came in at $35 million compared with $190 million reported in the year-ago quarter.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents were $660 million compared with $287 million as of Dec 31, 2019. The company had $4.4 billion in debt outstanding (net of unamortized debt issuance costs) at the end of the third quarter, up $0.3 billion from 2019-end. This includes $2.7 billion of corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.
Owing to the uncertainty tied to the pandemic, the company has temporarily suspended its share repurchases and dividend payouts.
Operational Update
As of Sep 30, 2020, most of the company's sales centers under the Vacation Ownership business remained open. The company said that 93% of its resorts were reopened in its Interval International business. Additionally, the company resumed sales at its Hawaiian sales centers in mid-October.
On Sep 10, the company approved a workforce reduction plan, which is likely to affect approximately 3,000 associates. With respect to this, the company stated that it now expects approximately $25-$30 million in restructuring and related charges, primarily related to employee severance and benefit costs.
Zacks Rank & Key Picks
Marriott Vacations currently carries a Zacks Rank #5 (Strong Sell).
K12 has a three-five-year earnings per share growth rate of 20%.
Mattel’s 2021 earnings are expected to surge 33.7%.
Activision Blizzard has a trailing four-quarter earnings surprise of 26.2%, on average.
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Marriott Vacations (VAC) Q3 Earnings Miss Estimates, Fall Y/Y
Marriott Vacations Worldwide Corporation (VAC - Free Report) reported mixed results for third-quarter 2020, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. However, both top and bottom lines declined year over year due to the ongoing pandemic.
Q3 Earnings and Revenues
In the quarter under review, adjusted loss per share came in at 81 cents, wider than the Zacks Consensus Estimate of a loss of 60 cents. In the prior-year quarter, the company reported adjusted earnings of $1.97 per share.
Total revenues of $649 million beat the consensus mark of $609 million by 6.6%. However, the top line declined 39.1% on a year-over-year basis.
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriot Vacations Worldwide Corporation price-consensus-eps-surprise-chart | Marriot Vacations Worldwide Corporation Quote
Segmental Performances
Vacation Ownership: During the third quarter, the segment’s revenues declined 39.3% year over year to $571 million compared with $940 million in the prior-year quarter. The decline can be primarily attributed to lower resort occupancies resulting from the coronavirus pandemic.
Revenues, excluding cost reimbursements, fell 56% year over year due to a 9% decline in financing revenues, partially offset by 4% growth in management fees.The segment’s adjusted EBITDA came in at $28 million compared with $195 million in the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues totaled $71 million in the third quarter, down 36% from $111 million in the prior-year quarter. The decline can be primarily attributed to lower exchange and rental transactions due to the impact of the coronavirus pandemic.
During the third quarter, total Interval Network active members declined 2% (compared with the previous quarter) to 1.5 million, while interval International average revenue per member fell 10% to $36.76. The segment’s adjusted EBITDA declined 31.1% year over year to $31 million.
Corporate and Other results
General and administrative costs improved $25 million year over year, courtesy of synergy savings and a decline in compensation-related expenses. It also included $5 million of credit under the CARES Act legislation, thereby motivating the company to pay associates' benefit costs while not working.
Expenses & EBITDA
Total expenses in the quarter declined 32.4% year over year to $673 million compared with $996 million reported in the year-ago quarter.
The company’s adjusted EBITDA in the third quarter came in at $35 million compared with $190 million reported in the year-ago quarter.
Balance Sheet
As of Sep 30, 2020, cash and cash equivalents were $660 million compared with $287 million as of Dec 31, 2019. The company had $4.4 billion in debt outstanding (net of unamortized debt issuance costs) at the end of the third quarter, up $0.3 billion from 2019-end. This includes $2.7 billion of corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.
Owing to the uncertainty tied to the pandemic, the company has temporarily suspended its share repurchases and dividend payouts.
Operational Update
As of Sep 30, 2020, most of the company's sales centers under the Vacation Ownership business remained open. The company said that 93% of its resorts were reopened in its Interval International business. Additionally, the company resumed sales at its Hawaiian sales centers in mid-October.
On Sep 10, the company approved a workforce reduction plan, which is likely to affect approximately 3,000 associates. With respect to this, the company stated that it now expects approximately $25-$30 million in restructuring and related charges, primarily related to employee severance and benefit costs.
Zacks Rank & Key Picks
Marriott Vacations currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Consumer Discretionary sector are K12 Inc. (LRN - Free Report) , Mattel, Inc. (MAT - Free Report) and Activision Blizzard, Inc. . K12 sports a Zacks Rank #1 (Strong Buy), while Mattel and Activision Blizzard carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
K12 has a three-five-year earnings per share growth rate of 20%.
Mattel’s 2021 earnings are expected to surge 33.7%.
Activision Blizzard has a trailing four-quarter earnings surprise of 26.2%, on average.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>