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Marriott Vacations (VAC) Q2 Earnings Lag Estimates, Stock Down
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Marriott Vacations Worldwide Corporation (VAC - Free Report) reported second-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line fell from the prior-year quarter’s figure.
Following the results, the stock declined 7% in the after-hour trading session on Aug 2. Negative investor sentiments were witnessed as VAC slashed its 2023 outlook.
Earnings & Revenue Discussion
During second-quarter 2023, Marriott Vacations reported adjusted earnings per share (EPS) of $2.19, missing the Zacks Consensus Estimate of $2.81 by 22.1%. In the year-ago quarter, it reported an adjusted EPS of $2.87.
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Quarterly revenues of $1,178 million missed the consensus mark of $1,242 million by 5.1%. However, the top line increased 1.2% on a year-over-year basis.
Segmental Performances
Vacation Ownership: During the second quarter, the segment’s revenues totaled $1,112 million, up 1.9% from $1,091 million reported in the prior-year quarter.
During the quarter, the company’s Vacation Ownership contract sales fell 10% year over year to $453 million. The downside was primarily driven by larger-than-expected Volumes Per Guest (or VPG) declines, particularly at the legacy-Vistana sites. This and the continued transition to the Abound by Marriott Vacations program and the integration of Hyatt and legacy-Welk business models and sales processes added to the downside.
The segment’s adjusted EBITDA during the quarter came in at $245 million, down 11% from $274 million reported In the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues of $65 million declined 12.2% from $74 million reported in the year-ago quarter. Revenues, excluding cost reimbursements, declined 11% year over year.
During second-quarter 2023, interval international active members dropped 2% year over year to 1.6 million. Average revenues per member inched up 1% on a year-over-year basis. Adjusted EBITDA was $32 million, down 10% year over year.
Corporate and Other Results
During the second quarter, general and administrative costs totaled $64 million, reflecting no change from the prior-year quarter’s levels. Our estimate for the metric was $66.7 million.
Expenses & EBITDA
During the quarter, total expenses increased 4.8% year over year to $1,003 million from $957 million reported in the year-ago quarter. Our estimate for the metric was $1,046.8 million.
Adjusted EBITDA amounted to $222 million compared with $255 million reported in the prior-year quarter.
Balance Sheet
As of Jun 30, 2023, Marriott Vacations’s cash and cash equivalents were $242 million compared with $306 million as of Mar 31, 2023.
At the end of the second quarter, the company had $3 billion of corporate debt and $2 billion of non-recourse debt related to its securitized notes receivable.
2023 Outlook
For 2023, management anticipates contract sales in the range of $1,840-$1,900 million compared with the previous expectation of $1,930-$2,000 million. Adjusted free cash flow is projected in the range of $540-$600 million compared with the prior projection of $600-$670 million. Adjusted EBITDA is estimated to be between $880 million and $910 million compared with the previous anticipation of $950 million and $1,000 million.
Adjusted EPS is expected to be between $9.76 and $10.22, down from the prior estimate of $11.05 and $11.85.
Zacks Rank & Key Picks
Marriott Vacations carries a Zacks Rank #3 (Hold).
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 16.3% in the past three months. 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 suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have increased 28.2% in the past three months.
The Zacks Consensus Estimate for Live Nation’s 2024 sales and EPS indicates a rise of 7.4% and 120.5%, respectively, from the year-ago period’s levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 28.5%, on average. Shares of RCL have increased 46.4% in the past three months.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 52.7% and 175.1%, respectively, from the year-ago period’s levels.
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Marriott Vacations (VAC) Q2 Earnings Lag Estimates, Stock Down
Marriott Vacations Worldwide Corporation (VAC - Free Report) reported second-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line fell from the prior-year quarter’s figure.
Following the results, the stock declined 7% in the after-hour trading session on Aug 2. Negative investor sentiments were witnessed as VAC slashed its 2023 outlook.
Earnings & Revenue Discussion
During second-quarter 2023, Marriott Vacations reported adjusted earnings per share (EPS) of $2.19, missing the Zacks Consensus Estimate of $2.81 by 22.1%. In the year-ago quarter, it reported an adjusted EPS of $2.87.
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriot Vacations Worldwide Corporation price-consensus-eps-surprise-chart | Marriot Vacations Worldwide Corporation Quote
Quarterly revenues of $1,178 million missed the consensus mark of $1,242 million by 5.1%. However, the top line increased 1.2% on a year-over-year basis.
Segmental Performances
Vacation Ownership: During the second quarter, the segment’s revenues totaled $1,112 million, up 1.9% from $1,091 million reported in the prior-year quarter.
During the quarter, the company’s Vacation Ownership contract sales fell 10% year over year to $453 million. The downside was primarily driven by larger-than-expected Volumes Per Guest (or VPG) declines, particularly at the legacy-Vistana sites. This and the continued transition to the Abound by Marriott Vacations program and the integration of Hyatt and legacy-Welk business models and sales processes added to the downside.
The segment’s adjusted EBITDA during the quarter came in at $245 million, down 11% from $274 million reported In the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues of $65 million declined 12.2% from $74 million reported in the year-ago quarter. Revenues, excluding cost reimbursements, declined 11% year over year.
During second-quarter 2023, interval international active members dropped 2% year over year to 1.6 million. Average revenues per member inched up 1% on a year-over-year basis. Adjusted EBITDA was $32 million, down 10% year over year.
Corporate and Other Results
During the second quarter, general and administrative costs totaled $64 million, reflecting no change from the prior-year quarter’s levels. Our estimate for the metric was $66.7 million.
Expenses & EBITDA
During the quarter, total expenses increased 4.8% year over year to $1,003 million from $957 million reported in the year-ago quarter. Our estimate for the metric was $1,046.8 million.
Adjusted EBITDA amounted to $222 million compared with $255 million reported in the prior-year quarter.
Balance Sheet
As of Jun 30, 2023, Marriott Vacations’s cash and cash equivalents were $242 million compared with $306 million as of Mar 31, 2023.
At the end of the second quarter, the company had $3 billion of corporate debt and $2 billion of non-recourse debt related to its securitized notes receivable.
2023 Outlook
For 2023, management anticipates contract sales in the range of $1,840-$1,900 million compared with the previous expectation of $1,930-$2,000 million. Adjusted free cash flow is projected in the range of $540-$600 million compared with the prior projection of $600-$670 million. Adjusted EBITDA is estimated to be between $880 million and $910 million compared with the previous anticipation of $950 million and $1,000 million.
Adjusted EPS is expected to be between $9.76 and $10.22, down from the prior estimate of $11.05 and $11.85.
Zacks Rank & Key Picks
Marriott Vacations carries a Zacks Rank #3 (Hold).
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). The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 16.3% in the past three months. 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 suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have increased 28.2% in the past three months.
The Zacks Consensus Estimate for Live Nation’s 2024 sales and EPS indicates a rise of 7.4% and 120.5%, respectively, from the year-ago period’s levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 28.5%, on average. Shares of RCL have increased 46.4% in the past three months.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 52.7% and 175.1%, respectively, from the year-ago period’s levels.