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Marriott Vacations' (VAC) Q1 Earnings Top Estimates, Rise Y/Y

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Marriott Vacations Worldwide Corporation (VAC - Free Report) reported impressive first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.

Stephen P. Weisz, CEO, stated, "Our start to 2022 was very strong, with first quarter adjusted EBITDA totaling $188 million and contract sales of $394 million, both exceeding pre-pandemic levels. Vacations continue to play an infinitely more meaningful role in people's lives, and with our resilient business model and portfolio of leading brands, we are well positioned for growth."

Earnings & Revenue Discussion

During first-quarter 2022, the company reported adjusted earnings per share (EPS) of $1.70, surpassing the Zacks Consensus Estimate of $1.47 by 15.7%. In the year-ago quarter, the company had reported an adjusted loss of 49 cents per share.

Quarterly revenues of $1,052 million beat the consensus mark of $1,026 million by 2.6%. The top line increased 38.6% on a year-over-year basis.

 

Segmental Performances

Vacation Ownership: During the first quarter, revenues in the segment totaled $956 million, up 44.6% from $661 million reported in the prior-year quarter. Revenues, excluding cost reimbursements, increased 60% year over year.

The segment’s adjusted EBITDA came in at $199 million compared with $68 million reported in the prior-year quarter.
 
Exchange & Third-Party Management: The segment’s revenues totaled $84 million in the first quarter, down 2.3% from $86 million reported in the prior-year quarter. Revenues, excluding cost reimbursements, increased 5% year over year.

During the fourth quarter, interval international active members increased 9% year over year to 1.6 million, while average revenue per member declined 6% on a year-over-year basis. The segment’s adjusted EBITDA came in at $43 million compared with $41 million reported in the prior-year quarter.

Corporate and Other Results

During the first quarter, general and administrative costs increased by $15 million year over year, owing to an increase in salary costs, higher bonus expenses and a downside in credits related to incentives under the CARES Act.

Expenses & EBITDA

Total expenses in the quarter increased 23.3% year over year to $911 million from $739 million reported in the year-ago quarter.

The company’s adjusted EBITDA in the first quarter amounted to $188 million compared with $69 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2022, cash and cash equivalents were $354 million compared with $342 million as of Dec 31, 2021.

At the end of the first quarter, the company had $2.7 billion of net corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.

2022 Outlook

For 2022, the company anticipates contract sales in the range of $1,675-$1,775 million. Adjusted free cash flow is projected in the range of $560-$640 million. Adjusted EBITDA is expected to be between $860 million and $920 million. Adjusted fully diluted EPS for 2022 is expected to be between $9.13 to $10.09.

Zacks Rank & Key Picks

Marriott Vacations currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Clarus Corporation (CLAR - Free Report) , Bluegreen Vacations Holding Corporation and Funko, Inc. (FNKO - Free Report) .

Clarus sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 12.3%, on average. Shares of the company have increased 14.2% in the past year.  

The Zacks Consensus Estimate for CLAR’s 2022 sales and earnings per share (EPS) suggests growth of 25.3% and 22.5%, respectively, from the year-ago period’s levels.

Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 43.2% in the past year.

The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.

Funko sports a Zacks Rank #1. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 34.3% in the past year.

The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period’s reported levels.


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