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Solid RevPAR Growth to Benefit Marriott's (MAR) Q2 Earnings
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Marriott International, Inc. (MAR - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, before the opening bell.
In the previous quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 12.4% and 6.4%, respectively.
Marriott’s earnings topped the consensus mark in three of the trailing four quarters and remained flat on one occasion, the average surprise being 8%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line is pegged at $2.19 per share, indicating growth of 21.7% from earnings of $1.80 per share reported in the year-ago quarter.
Marriott International, Inc. Price and EPS Surprise
For revenues, the consensus mark is pegged at $6.05 billion, suggesting growth of 13.3% from the prior-year quarter’s reported figure.
Let's check out the factors that are likely to have influenced the quarter.
Key Factors to Note
Revenues
Marriott’s second-quarter revenues are expected to have increased on a year-over-year basis, courtesy of robust leisure demand, strong global booking trends and easing of travel restrictions throughout Asia Pacific (particularly in Greater China). These factors are likely to have enabled the growth of revenue per available room (RevPAR), especially on a global basis. This reflects the boost in occupancy rates and average daily rate on a year-over-year basis. With global trends improving, the recovery momentum is likely to have continued in the quarter under review.
Owing to an increase in RevPAR and higher co-branded credit card fees for the second quarter, Marriott anticipates gross fee revenues to be in the range of $1,205-$1,225 million, up from the previous quarter’s reported value of $1,073 million.
For the quarter, our model predicts gross fee revenues to be $1,224.5 million, up 14.1% year over year. We also anticipate owned, leased, and other revenues to increase 16.7% to $424.9 million year over year.
The company expects to witness strong year-over-year growth in the international markets, primarily in Asia Pacific, in the second quarter. The travel demand and booking trend recovery momentum in China have majorly added to the anticipation.
Geographically, for the to-be-reported quarter, the company expects RevPAR year-over-year growth in worldwide, international, and U.S. & Canada markets to be within the respective ranges of 10-12%, 27-29% and 5-7%.
We expect RevPAR in worldwide, international, and U.S. & Canada markets to grow 10.2% to $131.56, 29% to $117.29 and 5% to $138.16, respectively, year over year. We also expect Asia Pacific RevPAR to grow 32.7% to $104.84 year over year.
For the second quarter, our model also predicts total number of rooms to increase 3.8% to 1,558,254 units on a year-over-year basis.
Margins
Although persisting inflation and economic challenges are potential headwinds, Marriott is still likely to witness margin and earnings growth on a year-over-year basis. The improvement in global trends and RevPAR growth are likely to have helped the company to survive the tough economic conditions.
For the second quarter, Marriott expects general, administrative, and other expenses to range within $250-$245 million, up from $216 million reported in the prior-year quarter. Adjusted EBITDA is expected to range within $1,140-$1,165 million, up from $1,019 million in the year-ago quarter.
For the quarter, we expect the company’s general, administrative, and other expenses to increase 6.5% to $246 million year over year. Also, adjusted EBITDA is expected to rise 12.8% to $1,149 million year over year.
Furthermore, we also expect adjusted EBITDA and operating margins to increase 20 basis points (bps) to 19.3% and 50 bps to 16.6%, respectively, year over year.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for Marriott for the quarter to be reported. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you will see below.
Earnings ESP: The Earnings ESP for MAR is +8.44%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MAR currently carries a Zacks Rank of 2.
Other Stocks Poised to Beat on Earnings
Here are a few other stocks from the broader Zacks Consumer Discretionary sector, which according to our model, also have the right combination of elements to beat on earnings this season:
Shares of MGM Resorts have increased 53% in the past year. MGM’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 81%.
DraftKings Inc. (DKNG - Free Report) has an Earnings ESP of +6.60% and a Zacks Rank of 2.
Shares of DraftKings have increased 125.5% in the past year. DKNG’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 15.3%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank of 2.
Shares of Electronic Arts have increased 4.8% in the past year. EA’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 7.3%.
Image: Bigstock
Solid RevPAR Growth to Benefit Marriott's (MAR) Q2 Earnings
Marriott International, Inc. (MAR - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, before the opening bell.
In the previous quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 12.4% and 6.4%, respectively.
Marriott’s earnings topped the consensus mark in three of the trailing four quarters and remained flat on one occasion, the average surprise being 8%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line is pegged at $2.19 per share, indicating growth of 21.7% from earnings of $1.80 per share reported in the year-ago quarter.
Marriott International, Inc. Price and EPS Surprise
Marriott International, Inc. price-eps-surprise | Marriott International, Inc. Quote
For revenues, the consensus mark is pegged at $6.05 billion, suggesting growth of 13.3% from the prior-year quarter’s reported figure.
Let's check out the factors that are likely to have influenced the quarter.
Key Factors to Note
Revenues
Marriott’s second-quarter revenues are expected to have increased on a year-over-year basis, courtesy of robust leisure demand, strong global booking trends and easing of travel restrictions throughout Asia Pacific (particularly in Greater China). These factors are likely to have enabled the growth of revenue per available room (RevPAR), especially on a global basis. This reflects the boost in occupancy rates and average daily rate on a year-over-year basis. With global trends improving, the recovery momentum is likely to have continued in the quarter under review.
Owing to an increase in RevPAR and higher co-branded credit card fees for the second quarter, Marriott anticipates gross fee revenues to be in the range of $1,205-$1,225 million, up from the previous quarter’s reported value of $1,073 million.
For the quarter, our model predicts gross fee revenues to be $1,224.5 million, up 14.1% year over year. We also anticipate owned, leased, and other revenues to increase 16.7% to $424.9 million year over year.
The company expects to witness strong year-over-year growth in the international markets, primarily in Asia Pacific, in the second quarter. The travel demand and booking trend recovery momentum in China have majorly added to the anticipation.
Geographically, for the to-be-reported quarter, the company expects RevPAR year-over-year growth in worldwide, international, and U.S. & Canada markets to be within the respective ranges of 10-12%, 27-29% and 5-7%.
We expect RevPAR in worldwide, international, and U.S. & Canada markets to grow 10.2% to $131.56, 29% to $117.29 and 5% to $138.16, respectively, year over year. We also expect Asia Pacific RevPAR to grow 32.7% to $104.84 year over year.
For the second quarter, our model also predicts total number of rooms to increase 3.8% to 1,558,254 units on a year-over-year basis.
Margins
Although persisting inflation and economic challenges are potential headwinds, Marriott is still likely to witness margin and earnings growth on a year-over-year basis. The improvement in global trends and RevPAR growth are likely to have helped the company to survive the tough economic conditions.
For the second quarter, Marriott expects general, administrative, and other expenses to range within $250-$245 million, up from $216 million reported in the prior-year quarter. Adjusted EBITDA is expected to range within $1,140-$1,165 million, up from $1,019 million in the year-ago quarter.
For the quarter, we expect the company’s general, administrative, and other expenses to increase 6.5% to $246 million year over year. Also, adjusted EBITDA is expected to rise 12.8% to $1,149 million year over year.
Furthermore, we also expect adjusted EBITDA and operating margins to increase 20 basis points (bps) to 19.3% and 50 bps to 16.6%, respectively, year over year.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for Marriott for the quarter to be reported. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you will see below.
Earnings ESP: The Earnings ESP for MAR is +8.44%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MAR currently carries a Zacks Rank of 2.
Other Stocks Poised to Beat on Earnings
Here are a few other stocks from the broader Zacks Consumer Discretionary sector, which according to our model, also have the right combination of elements to beat on earnings this season:
MGM Resorts International (MGM - Free Report) has an Earnings ESP of +19.43% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of MGM Resorts have increased 53% in the past year. MGM’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 81%.
DraftKings Inc. (DKNG - Free Report) has an Earnings ESP of +6.60% and a Zacks Rank of 2.
Shares of DraftKings have increased 125.5% in the past year. DKNG’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 15.3%.
Electronic Arts Inc. (EA - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank of 2.
Shares of Electronic Arts have increased 4.8% in the past year. EA’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 7.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.