Back to top

Image: Bigstock

Extended Stay (STAY) Q1 Earnings & Revenues Beat Estimates

Read MoreHide Full Article

Extended Stay America, Inc. (STAY - Free Report) reported first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and bottom line declined on a year-over-year basis. Following the results, shares of the company fell 2.4% during after-hour trading session on May 10.

Earnings & Revenue Discussion

During the first quarter, adjusted earnings per share of 4 cents surpassed the Zacks Consensus Estimate of a loss of 1 cent. However, the bottom line declined 42.9% from 7 cents reported in the prior-year quarter.

In the quarter under review, total revenues came in at $259.6 million, beating the consensus mark of $253 million by 2.6%. However, the top line declined 2.5% on a year-over-year basis primarily due to the negative impacts of COVID-19.

Comparable system-wide RevPAR of $43.56 fell 1.7% on a year-over-year basis due to a 5.7% drop in average daily rate. However, this was partially offset by a 310-basis point (bps) increase in occupancy rate.

Meanwhile, comparable company-owned RevPAR fell 1.6% year over year to $44.42 during the first quarter compared with $45.15 in the prior-year quarter.

Extended Stay America, Inc. Price, Consensus and EPS Surprise

 

Extended Stay America, Inc. Price, Consensus and EPS Surprise

Extended Stay America, Inc. price-consensus-eps-surprise-chart | Extended Stay America, Inc. Quote

 

Operating Highlights

In the quarter under review, Extended Stay’s hotel operating margin came in at 43.4%, reflecting a decline of 230 bps from the prior-year quarter’s level. The downside was primarily due to a fall in RevPAR (owing to the pandemic) as well as a rise in hotel operating expenses. Hotel operating expenses were primarily driven by a rise in labor, insurance and indirect expenses. However, this was partially offset by lower distribution costs, credit card processing fees and breakfast costs.

Adjusted EBITDA totaled $90.9 million, down 7% from the comparable year-ago period due to a decline in comparable system-wide RevPAR.

Balance Sheet

Cash and cash equivalents as of Mar 31, 2021, were $357.9 million compared with $396.8 million on Dec 31, 2020. At the end of the first quarter, total debt (net of unamortized deferred financing costs and debt discounts) amounted to $2,643.9 million compared with $2,683.6 million at 2020-end.

Extended Stay’s capital expenditures in the quarter under review came in at $30.4 million. Notably, renovation capital of $3.6 million and new hotel development capital of $6.2 million were included in the same.

Unit Developments

During the first quarter, the company opened two company-owned hotel and three franchised hotels.

As of Mar 31, 2021, the company had a pipeline of 51 hotels, of which six hotels were company-owned and 45 hotels were third-party related. Altogether, the hotels have approximately 6,200 rooms.

2021 Outlook

Owing to the company’s pending acquisition by affiliates of The Blackstone Group Inc. and Starwood Capital Inc., Extended Stay has decided not to issue its full-year guidance at the moment.

Zacks Rank

Extended Stay — which shares space with Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Choice Hotels International, Inc. (CHH - Free Report) in the Zacks Hotels and Motels industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

See 3 crypto-related stocks now >>