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Choice Hotels (CHH) Q3 Earnings Miss, Revenues Top Estimates
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Choice Hotels International, Inc. (CHH - Free Report) reported third-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate while revenues beat the same. However, the top and the bottom line declined year over year owing to the COVID-19 pandemic.
Nonetheless, Patrick Pacious, president and chief executive officer of Choice Hotels, stated, "We believe that our predominantly leisure focus and strength in domestic drive-to markets will allow us to continue to outperform the overall industry during the recovery phase."
Following the announcement, shares of the company rose 1.7% during trading hours on Nov 5.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
The lodging franchisor reported adjusted earnings of 66 cents per share, which missed the consensus mark of 72 cents by 8.3%. Also, the bottom line dropped 51.8% from the prior-year figure of $1.37.
For the quarter under review, total revenues came in at $210.8 million, down 32.2% year over year. Nonetheless, the figure topped the consensus mark of $201 million by 4.9%.
Franchising & Royalties
During the third quarter, Domestic royalty fees totaled $76 million, down 29% year over year. Also, domestic system-wide RevPAR declined 28.8% year over year. Average daily rate was down 13.4% and occupancy was down to 52.1% from 63.4% in the prior-year quarter.
The company’s new domestic franchise agreements were 232 in the third quarter, down 38% year over year. Year to date through Sep 30, 2020, 70% of the agreements comprised conversion hotels.
As of Sep 30, 2020, the number of domestic hotels and rooms rose 0.7% and 1.9% year over year, respectively. Meanwhile, the number of international hotels and rooms grew 0.9% and 10.7%, year over year, respectively.
Operating Results
Total operating expenses decreased 25.4% from third-quarter 2019 to $155.4 million. Adjusted EBITDA declined 33.7% from the prior-year quarter to $74.9 million.
Balance Sheet
As of Sep 30, 2020, Choice Hotels had cash and cash equivalents of $192 million compared with $33.8 million on Dec 31, 2019.
Long-term debt at the end of the third quarter was $1,058.3 million, up from $844.1 million at 2019-end. During the third quarter, goodwill as a percentage of total assets came in at 10.1%, compared with 11.5% at 2019-end.
Meanwhile, it suspended the payout of future dividends for the remainder of 2020. As a result, total dividends paid for 2020 will be approximately $25 million.
Management repurchased roughly 8,000 shares for nearly $0.7 million under the share repurchase program during the third quarter. As of Sep 30, 2020, the company had 3.4 million shares remaining under the current share repurchase authorization.
Other Updates
As of Sep 30, 2020, the company’s total domestic pipeline of hotels awaiting conversion, under construction, or approved for development, reached 945 hotels, thereby representing more than 76,000 rooms.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. However, the metrics declined sharply year over year. Adjusted earnings per share of 6 cents beat the Zacks Consensus Estimate of a loss of 9 cents. However, the bottom line fell from $1.05 reported in the prior-year quarter. Quarterly revenues of $933 million beat the consensus mark of $929 million but declined 61% year over year.
Hyatt Hotels Corporation (H - Free Report) reported dismal third-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined sharply on a year-over-year basis. The company reported adjusted loss per share of $1.48, wider than the Zacks Consensus Estimate of a loss of $1.25. In the prior-year quarter, the company had reported adjusted earnings per share of 37 cents. Revenues of $399 million missed the consensus mark of $449 million and declined 67.2% from a year ago.
Marriott Vacations Worldwide Corporation (VAC - Free Report) reported third-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. However, the top and bottom line declined year over year due to the pandemic. During the quarter, 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. 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.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Choice Hotels (CHH) Q3 Earnings Miss, Revenues Top Estimates
Choice Hotels International, Inc. (CHH - Free Report) reported third-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate while revenues beat the same. However, the top and the bottom line declined year over year owing to the COVID-19 pandemic.
Nonetheless, Patrick Pacious, president and chief executive officer of Choice Hotels, stated, "We believe that our predominantly leisure focus and strength in domestic drive-to markets will allow us to continue to outperform the overall industry during the recovery phase."
Following the announcement, shares of the company rose 1.7% during trading hours on Nov 5.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Choice Hotels International, Inc. price-consensus-eps-surprise-chart | Choice Hotels International, Inc. Quote
Q3 Earnings and Revenues
The lodging franchisor reported adjusted earnings of 66 cents per share, which missed the consensus mark of 72 cents by 8.3%. Also, the bottom line dropped 51.8% from the prior-year figure of $1.37.
For the quarter under review, total revenues came in at $210.8 million, down 32.2% year over year. Nonetheless, the figure topped the consensus mark of $201 million by 4.9%.
Franchising & Royalties
During the third quarter, Domestic royalty fees totaled $76 million, down 29% year over year. Also, domestic system-wide RevPAR declined 28.8% year over year. Average daily rate was down 13.4% and occupancy was down to 52.1% from 63.4% in the prior-year quarter.
The company’s new domestic franchise agreements were 232 in the third quarter, down 38% year over year. Year to date through Sep 30, 2020, 70% of the agreements comprised conversion hotels.
As of Sep 30, 2020, the number of domestic hotels and rooms rose 0.7% and 1.9% year over year, respectively. Meanwhile, the number of international hotels and rooms grew 0.9% and 10.7%, year over year, respectively.
Operating Results
Total operating expenses decreased 25.4% from third-quarter 2019 to $155.4 million. Adjusted EBITDA declined 33.7% from the prior-year quarter to $74.9 million.
Balance Sheet
As of Sep 30, 2020, Choice Hotels had cash and cash equivalents of $192 million compared with $33.8 million on Dec 31, 2019.
Long-term debt at the end of the third quarter was $1,058.3 million, up from $844.1 million at 2019-end. During the third quarter, goodwill as a percentage of total assets came in at 10.1%, compared with 11.5% at 2019-end.
Meanwhile, it suspended the payout of future dividends for the remainder of 2020. As a result, total dividends paid for 2020 will be approximately $25 million.
Management repurchased roughly 8,000 shares for nearly $0.7 million under the share repurchase program during the third quarter. As of Sep 30, 2020, the company had 3.4 million shares remaining under the current share repurchase authorization.
Other Updates
As of Sep 30, 2020, the company’s total domestic pipeline of hotels awaiting conversion, under construction, or approved for development, reached 945 hotels, thereby representing more than 76,000 rooms.
Zacks Rank & Peer Releases
Choice Hotels currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. However, the metrics declined sharply year over year. Adjusted earnings per share of 6 cents beat the Zacks Consensus Estimate of a loss of 9 cents. However, the bottom line fell from $1.05 reported in the prior-year quarter. Quarterly revenues of $933 million beat the consensus mark of $929 million but declined 61% year over year.
Hyatt Hotels Corporation (H - Free Report) reported dismal third-quarter 2020 results, wherein earnings and revenues not only missed the Zacks Consensus Estimate but also declined sharply on a year-over-year basis. The company reported adjusted loss per share of $1.48, wider than the Zacks Consensus Estimate of a loss of $1.25. In the prior-year quarter, the company had reported adjusted earnings per share of 37 cents. Revenues of $399 million missed the consensus mark of $449 million and declined 67.2% from a year ago.
Marriott Vacations Worldwide Corporation (VAC - Free Report) reported third-quarter 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. However, the top and bottom line declined year over year due to the pandemic. During the quarter, 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. 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.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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