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Marriott (MAR) Q4 Earnings Surpass Estimates, Revenues Miss
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Marriott International, Inc. (MAR - Free Report) reported fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines increased on a year-over-year basis. The upside was backed by solid leisure demand and recovery in business transient and group demand. It also benefited from its fee-driven, asset-light business model.
The company reported strength in The Marriott Bonvoy loyalty program, comprising 196 million members as of 2023-end. It expanded its co-brand credit card offerings to 31 cards (across 11 countries), representing an increase of 11% in global card spending on a year-over-year basis.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $3.57, which beat the Zacks Consensus Estimate of $2.12. The company reported adjusted earnings of $1.96 per share in the prior-year quarter.
Marriott International, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $6.1 billion missed the consensus mark of $6.3 billion. The top line improved 2.9% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $321 million and $705 million, respectively, up 12% and 7% year over year. Increased revenues per available room (RevPAR) and unit growth primarily backed this uptick. We estimate the metrics to be $318.8 million and $711.5 million, respectively.
Incentive management fees during the quarter reached $218 million, reflecting a rise of 17% from $106 million in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties jumped 7.2% (in constant dollars) year over year. This was primarily backed by a 3% increase in ADR. Occupancy improved by 2.6% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 13.3% (in constant dollars) year over year. Occupancy increased 3.1% year over year, while ADR rose 8.5% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 80.9% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 17.4% year over year. Occupancy and ADR gained 8.1% and 3.6% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America rose 3.1% from 2022 levels.
Total expenses during the quarter increased 9% year over year to $5.4 billion, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $5.2 billion.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.2 billion, up 10% from the prior-year quarter. We predicted the metric to be $1.1 billion.
Balance Sheet
At the fourth-quarter end, Marriott's total debt reached $11.9 billion compared with $11.8 billion in the previous quarter. Cash and cash equivalents, as of Dec 31, 2023, came in at $0.3 billion compared with $0.7 billion in the previous quarter.
In 2023, the company repurchased 21.5 million shares of its common stock worth $3.9 billion.
Unit Developments
At the end of fourth-quarter 2023, Marriott's development pipeline totaled 3,379 hotels, with approximately 573,000 rooms. More than 232,000 rooms were under construction. In 2023, the company added 558 properties (81,281 rooms) to its worldwide lodging portfolio.
2023 Highlights
Total revenues in 2023 came in at $23.7 billion compared with $20.8 billion in 2022.
Adjusted EBITDA in 2023 came in at $4.7 billion compared with $3.9 billion in 2022.
In 2023, adjusted diluted EPS came in at $9.99 compared with $6.69 reported in the previous year.
Outlook
For first-quarter 2024, management anticipates gross fee revenues in the range of $1.19-$1.2 billion. Adjusted EBITDA is expected between $1.12 billion and $1.15 billion. MAR estimates first-quarter EPS between $2.12 and $2.19.
For the first quarter, the company projects worldwide system-wide RevPAR to increase 4-5% year over year.
For 2024, MAR forecasts gross fee revenues in the range of $5.1-$5.2 billion. General and administrative expenses are projected in the range of $1.02-$1.04 billion. Adjusted EBITDA is expected between $4.9-$5.01 billion. It envisions 2024 EPS in the band of $9.18-$9.52.
Zacks Rank & Key Picks
Marriott currently carries a Zacks Rank #3 (Hold).
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 55.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14% and 42.5%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 35.3% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 30.4% in the past year.
The Zacks Consensus Estimate for CCL’s fiscal 2024 sales indicates a rise of 13.8% from the year-ago levels.
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Marriott (MAR) Q4 Earnings Surpass Estimates, Revenues Miss
Marriott International, Inc. (MAR - Free Report) reported fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines increased on a year-over-year basis. The upside was backed by solid leisure demand and recovery in business transient and group demand. It also benefited from its fee-driven, asset-light business model.
The company reported strength in The Marriott Bonvoy loyalty program, comprising 196 million members as of 2023-end. It expanded its co-brand credit card offerings to 31 cards (across 11 countries), representing an increase of 11% in global card spending on a year-over-year basis.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $3.57, which beat the Zacks Consensus Estimate of $2.12. The company reported adjusted earnings of $1.96 per share in the prior-year quarter.
Marriott International, Inc. Price, Consensus and EPS Surprise
Marriott International, Inc. price-consensus-eps-surprise-chart | Marriott International, Inc. Quote
Quarterly revenues of $6.1 billion missed the consensus mark of $6.3 billion. The top line improved 2.9% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $321 million and $705 million, respectively, up 12% and 7% year over year. Increased revenues per available room (RevPAR) and unit growth primarily backed this uptick. We estimate the metrics to be $318.8 million and $711.5 million, respectively.
Incentive management fees during the quarter reached $218 million, reflecting a rise of 17% from $106 million in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties jumped 7.2% (in constant dollars) year over year. This was primarily backed by a 3% increase in ADR. Occupancy improved by 2.6% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 13.3% (in constant dollars) year over year. Occupancy increased 3.1% year over year, while ADR rose 8.5% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 80.9% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 17.4% year over year. Occupancy and ADR gained 8.1% and 3.6% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America rose 3.1% from 2022 levels.
Total expenses during the quarter increased 9% year over year to $5.4 billion, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $5.2 billion.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.2 billion, up 10% from the prior-year quarter. We predicted the metric to be $1.1 billion.
Balance Sheet
At the fourth-quarter end, Marriott's total debt reached $11.9 billion compared with $11.8 billion in the previous quarter. Cash and cash equivalents, as of Dec 31, 2023, came in at $0.3 billion compared with $0.7 billion in the previous quarter.
In 2023, the company repurchased 21.5 million shares of its common stock worth $3.9 billion.
Unit Developments
At the end of fourth-quarter 2023, Marriott's development pipeline totaled 3,379 hotels, with approximately 573,000 rooms. More than 232,000 rooms were under construction. In 2023, the company added 558 properties (81,281 rooms) to its worldwide lodging portfolio.
2023 Highlights
Total revenues in 2023 came in at $23.7 billion compared with $20.8 billion in 2022.
Adjusted EBITDA in 2023 came in at $4.7 billion compared with $3.9 billion in 2022.
In 2023, adjusted diluted EPS came in at $9.99 compared with $6.69 reported in the previous year.
Outlook
For first-quarter 2024, management anticipates gross fee revenues in the range of $1.19-$1.2 billion. Adjusted EBITDA is expected between $1.12 billion and $1.15 billion. MAR estimates first-quarter EPS between $2.12 and $2.19.
For the first quarter, the company projects worldwide system-wide RevPAR to increase 4-5% year over year.
For 2024, MAR forecasts gross fee revenues in the range of $5.1-$5.2 billion. General and administrative expenses are projected in the range of $1.02-$1.04 billion. Adjusted EBITDA is expected between $4.9-$5.01 billion. It envisions 2024 EPS in the band of $9.18-$9.52.
Zacks Rank & Key Picks
Marriott currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 55.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates a rise of 14% and 42.5%, respectively, from the year-ago period’s levels.
H World Group Limited (HTHT - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 94.5%, on average. The stock has declined 35.3% in the past year.
The Zacks Consensus Estimate for HTHT’s 2024 sales and EPS indicates an improvement of 7.2% and 7.1%, respectively, from the year-ago period’s levels.
Carnival Corporation & plc (CCL - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 19.2%, on average. The stock has gained 30.4% in the past year.
The Zacks Consensus Estimate for CCL’s fiscal 2024 sales indicates a rise of 13.8% from the year-ago levels.