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Choice Hotels (CHH) Q1 Earnings Top, Revenues Miss, Stock Down
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Choice Hotels International, Inc. (CHH - Free Report) delivered mixed first-quarter 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased. Following the results, the company’s shares declined 5.3% on May 7.
Patrick Pacious, president and CEO, expressed satisfaction with first-quarter performance, which was built on the company's record financial results in 2023. CHH benefited from impressive outcomes of the effective realization of revenue synergies, stemming from the Radisson Americas acquisition.
Q1 Earnings and Revenues
Choice Hotels reported adjusted earnings per share (EPS) of $1.28, beating the Zacks Consensus Estimate of $1.15 by 11.3%. It reported adjusted EPS of $1.12 in the prior-year quarter.
Quarterly revenues of $331.9 million missed the consensus mark of $345 million. The metric dipped 0.3% from the year-ago quarter’s level of $332.8 million.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Royalty, licensing and management fees decreased 2% year over year to $105.5 million. In the three-month period ending Mar 31, domestic revenue per available room (RevPAR) experienced a decline of 590 basis points year over year. This decrease can be attributed, in part, to the timing of the Easter weekend and more challenging year-over-year comparisons. However, despite this decline, domestic RevPAR showed a notable increase of 8.2% compared with the same period in 2019.
The effective royalty rate increased 4 basis points year over year to 5.03%.
Operating Results
Total operating expenses increased 7% year over year to $271.8 million. Our estimate for the metric was $268.3 million.
Adjusted EBITDA came in at $124.3 million compared with $106.4 million reported in the prior year. We expected the metric to be $122.8 million.
Balance Sheet
As of Mar 31, Choice Hotels had cash and cash equivalents of $42.1 million compared with $26.8 million as of Dec 31, 2023.
Long-term debt at the end of the first quarter was $1.2 billion compared with $1.1 billion reported in 2023-end.
2024 Outlook
Choice Hotels now anticipates adjusted net income in the range of $306-$320 million, down from the prior estimate of $316-$331 million. Adjusted EBITDA is expected to be between $580 million and $600 million.
Adjusted EPS is expected to be in the range of $6.30-$6.60. The Zacks Consensus Estimate is pegged at $6.46.
Domestic RevPAR growth is estimated to be in the range of flat to up 2% compared with 2023 levels. Domestic effective royalty rate is forecast to increase in mid-single digits from the year-earlier levels.
Boyd Gaming Corporation (BYD - Free Report) reported mixed first-quarter 2024 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. The top and bottom lines declined on a year-over-year basis.
BYD’s performance was impacted by January's severe winter weather in the Midwest and South, and a softer Las Vegas local market.
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported stellar first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
RCL benefited from robust demand, strong pricing (on closer-in demand), solid onboard spending and favorable timing of expenses. It also raised its 2024 adjusted EPS guidance on the back of an exceptional WAVE season and continued strong demand.
Pool Corporation (POOL - Free Report) reported drab first-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. Also, the top and bottom lines declined year over year. POOL’s operations were affected by lower pool construction activity, economic pressures and weather-related constraints.
POOL raised its annual earnings guidance range to account for year-to-date tax benefits. It expects sales and gross margin trends to improve with the onset of the swimming pool season, aligning with seasonal buying patterns.
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Choice Hotels (CHH) Q1 Earnings Top, Revenues Miss, Stock Down
Choice Hotels International, Inc. (CHH - Free Report) delivered mixed first-quarter 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased. Following the results, the company’s shares declined 5.3% on May 7.
Patrick Pacious, president and CEO, expressed satisfaction with first-quarter performance, which was built on the company's record financial results in 2023. CHH benefited from impressive outcomes of the effective realization of revenue synergies, stemming from the Radisson Americas acquisition.
Q1 Earnings and Revenues
Choice Hotels reported adjusted earnings per share (EPS) of $1.28, beating the Zacks Consensus Estimate of $1.15 by 11.3%. It reported adjusted EPS of $1.12 in the prior-year quarter.
Quarterly revenues of $331.9 million missed the consensus mark of $345 million. The metric dipped 0.3% from the year-ago quarter’s level of $332.8 million.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Choice Hotels International, Inc. price-consensus-eps-surprise-chart | Choice Hotels International, Inc. Quote
Franchising & Royalties
Royalty, licensing and management fees decreased 2% year over year to $105.5 million. In the three-month period ending Mar 31, domestic revenue per available room (RevPAR) experienced a decline of 590 basis points year over year. This decrease can be attributed, in part, to the timing of the Easter weekend and more challenging year-over-year comparisons. However, despite this decline, domestic RevPAR showed a notable increase of 8.2% compared with the same period in 2019.
The effective royalty rate increased 4 basis points year over year to 5.03%.
Operating Results
Total operating expenses increased 7% year over year to $271.8 million. Our estimate for the metric was $268.3 million.
Adjusted EBITDA came in at $124.3 million compared with $106.4 million reported in the prior year. We expected the metric to be $122.8 million.
Balance Sheet
As of Mar 31, Choice Hotels had cash and cash equivalents of $42.1 million compared with $26.8 million as of Dec 31, 2023.
Long-term debt at the end of the first quarter was $1.2 billion compared with $1.1 billion reported in 2023-end.
2024 Outlook
Choice Hotels now anticipates adjusted net income in the range of $306-$320 million, down from the prior estimate of $316-$331 million. Adjusted EBITDA is expected to be between $580 million and $600 million.
Adjusted EPS is expected to be in the range of $6.30-$6.60. The Zacks Consensus Estimate is pegged at $6.46.
Domestic RevPAR growth is estimated to be in the range of flat to up 2% compared with 2023 levels. Domestic effective royalty rate is forecast to increase in mid-single digits from the year-earlier levels.
Zacks Rank & Peer Releases
Choice Hotels currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boyd Gaming Corporation (BYD - Free Report) reported mixed first-quarter 2024 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. The top and bottom lines declined on a year-over-year basis.
BYD’s performance was impacted by January's severe winter weather in the Midwest and South, and a softer Las Vegas local market.
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported stellar first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
RCL benefited from robust demand, strong pricing (on closer-in demand), solid onboard spending and favorable timing of expenses. It also raised its 2024 adjusted EPS guidance on the back of an exceptional WAVE season and continued strong demand.
Pool Corporation (POOL - Free Report) reported drab first-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. Also, the top and bottom lines declined year over year. POOL’s operations were affected by lower pool construction activity, economic pressures and weather-related constraints.
POOL raised its annual earnings guidance range to account for year-to-date tax benefits. It expects sales and gross margin trends to improve with the onset of the swimming pool season, aligning with seasonal buying patterns.