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Hyatt's (H) Q2 Earnings Miss Estimates, Revenues Surpass
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Hyatt Hotels Corporation (H - Free Report) delivered second-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. The top and bottom lines increased on a year-over-year basis.
Hyatt benefited from robust comparable system-wide RevPAR and net room growth.
Q2 Earnings & Revenues
During the quarter under discussion, Hyatt reported adjusted earnings per share (EPS) of 82 cents, missing the Zacks Consensus Estimate of 83 cents. However, the company’s earnings improved 78.3% year over year.
Quarterly revenues of $1,705 million beat the consensus mark of $1,650 million. Moreover, the top line climbed 15% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $273 million, up 6.9% year over year. Our model predicted the metric to be $325.8 million. Adjusted EBITDA margin decreased to 29.3% compared with 30% reported in the year-ago quarter.
Hyatt Hotels Corporation Price, Consensus and EPS Surprise
Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group.
During the quarter under review, adjusted revenues in the Owned and Leased Hotels segment totaled $341 million, up 2.8% year over year. The segment benefited from growth in group as well as business transient travel and robust leisure demand. Our model estimated the metric to decline 0.6% year over year.
Segmental RevPAR jumped 10.1% from the prior-year quarter’s level. Average daily rate (ADR) was up 4.4% and occupancy rate expanded 3.9 percentage points from 2022 levels.
The segment’s adjusted EBITDA came in at $84 million compared with $99 million reported in the year-ago quarter.
Americas Management and Franchise segment’s total adjusted fee revenues amounted to $164 million, up 4.7% year over year. Our model estimated the metric to grow 2.2% year over year.
RevPAR for comparable Americas hotels rose 4.9% from the prior-year quarter’s level. ADR improved 2.5% and occupancy rate moved up 1.7 percentage points from the prior-year quarter’s numbers.
Segmental adjusted EBITDA amounted to $122 million compared with $117 million reported in the year-ago quarter.
In ASPAC Management and Franchising, RevPAR for comparable ASPAC hotels soared 78.7% from the year-earlier quarter’s figure. ADR grew 25.7% and occupancy rate improved 20.3 percentage points from the year-ago quarter’s levels. During the reported quarter, H benefited by broad recovery across the region.
Adjusted EBITDA was $37 million compared with $9 million in the prior-year quarter.
In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia hotels’ RevPAR gained 21% from the year-ago quarter’s levels. ADR increased 10.1% and occupancy rate rose 6.2 percentage points from the year-ago quarter’s numbers. The upside was primarily driven by strong leisure demand throughout Western Europe.
Adjusted EBITDA totaled $16 million compared with $10 million in the year-ago quarter.
In the Apple Leisure Group segment, adjusted revenues increased 9% year over year to $359 million. Our model hinted at an increase of 5.8% year over year. Solid demand for leisure travel, elevated airlift activities (for key Americas destinations) and a favorable pricing environment added to the upside.
Adjusted EBITDA came in at $49 million compared with $54 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2023, Hyatt reported cash and cash equivalents of $906 million compared with $1,051 million reported in the previous quarter. Total debt as of Jun 30, 2023, was $3,099 million compared with $3,102 million as of Mar 31, 2023.
Other Business Updates
Coming to hotel openings, 24 new hotels (or 5,927 rooms) joined Hyatt's system in the second quarter of 2023. As of Jun 30, 2023, Hyatt executed management or franchise contracts for approximately 585 hotels (or 119,000 rooms).
2023 Outlook
For 2023, the company expects adjusted selling, general and administrative expenses to be between $485 million and $495 million compared with the prior estimate of 480 million and $490. Capital expenditures are projected at approximately $200 million. Room growth in 2023 is anticipated at approximately 6% on a net-room basis.
Management anticipates 2023 system-wide RevPAR to rise 14-16% (earlier guidance: 12-16%) from 2022 levels. Adjusted EBITDA is estimated in the $1,020-$1,070 million band.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 11.8% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales indicates rises of 13.5% from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 37.2% in the past year.
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Hyatt's (H) Q2 Earnings Miss Estimates, Revenues Surpass
Hyatt Hotels Corporation (H - Free Report) delivered second-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. The top and bottom lines increased on a year-over-year basis.
Hyatt benefited from robust comparable system-wide RevPAR and net room growth.
Q2 Earnings & Revenues
During the quarter under discussion, Hyatt reported adjusted earnings per share (EPS) of 82 cents, missing the Zacks Consensus Estimate of 83 cents. However, the company’s earnings improved 78.3% year over year.
Quarterly revenues of $1,705 million beat the consensus mark of $1,650 million. Moreover, the top line climbed 15% on a year-over-year basis.
Operating Highlights
During the quarter, adjusted EBITDA came in at $273 million, up 6.9% year over year. Our model predicted the metric to be $325.8 million. Adjusted EBITDA margin decreased to 29.3% compared with 30% reported in the year-ago quarter.
Hyatt Hotels Corporation Price, Consensus and EPS Surprise
Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation Quote
Segmental Details
Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group.
During the quarter under review, adjusted revenues in the Owned and Leased Hotels segment totaled $341 million, up 2.8% year over year. The segment benefited from growth in group as well as business transient travel and robust leisure demand. Our model estimated the metric to decline 0.6% year over year.
Segmental RevPAR jumped 10.1% from the prior-year quarter’s level. Average daily rate (ADR) was up 4.4% and occupancy rate expanded 3.9 percentage points from 2022 levels.
The segment’s adjusted EBITDA came in at $84 million compared with $99 million reported in the year-ago quarter.
Americas Management and Franchise segment’s total adjusted fee revenues amounted to $164 million, up 4.7% year over year. Our model estimated the metric to grow 2.2% year over year.
RevPAR for comparable Americas hotels rose 4.9% from the prior-year quarter’s level. ADR improved 2.5% and occupancy rate moved up 1.7 percentage points from the prior-year quarter’s numbers.
Segmental adjusted EBITDA amounted to $122 million compared with $117 million reported in the year-ago quarter.
In ASPAC Management and Franchising, RevPAR for comparable ASPAC hotels soared 78.7% from the year-earlier quarter’s figure. ADR grew 25.7% and occupancy rate improved 20.3 percentage points from the year-ago quarter’s levels. During the reported quarter, H benefited by broad recovery across the region.
Adjusted EBITDA was $37 million compared with $9 million in the prior-year quarter.
In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia hotels’ RevPAR gained 21% from the year-ago quarter’s levels. ADR increased 10.1% and occupancy rate rose 6.2 percentage points from the year-ago quarter’s numbers. The upside was primarily driven by strong leisure demand throughout Western Europe.
Adjusted EBITDA totaled $16 million compared with $10 million in the year-ago quarter.
In the Apple Leisure Group segment, adjusted revenues increased 9% year over year to $359 million. Our model hinted at an increase of 5.8% year over year. Solid demand for leisure travel, elevated airlift activities (for key Americas destinations) and a favorable pricing environment added to the upside.
Adjusted EBITDA came in at $49 million compared with $54 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2023, Hyatt reported cash and cash equivalents of $906 million compared with $1,051 million reported in the previous quarter. Total debt as of Jun 30, 2023, was $3,099 million compared with $3,102 million as of Mar 31, 2023.
Other Business Updates
Coming to hotel openings, 24 new hotels (or 5,927 rooms) joined Hyatt's system in the second quarter of 2023. As of Jun 30, 2023, Hyatt executed management or franchise contracts for approximately 585 hotels (or 119,000 rooms).
2023 Outlook
For 2023, the company expects adjusted selling, general and administrative expenses to be between $485 million and $495 million compared with the prior estimate of 480 million and $490. Capital expenditures are projected at approximately $200 million. Room growth in 2023 is anticipated at approximately 6% on a net-room basis.
Management anticipates 2023 system-wide RevPAR to rise 14-16% (earlier guidance: 12-16%) from 2022 levels. Adjusted EBITDA is estimated in the $1,020-$1,070 million band.
Hyatt currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have surged 43% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 11.8% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales indicates rises of 13.5% from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 37.2% in the past year.