A month has gone by since the last earnings report for Marriott Vacations Worldwide (VAC Quick QuoteVAC - Free Report) . Shares have lost about 9.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Marriott Vacations Worldwide due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Marriott Vacations Q1 Earnings & Revenues Top Estimates

Marriott Vacations reported first-quarter 2024 results, with both earnings and revenues beating their respective Zacks Consensus Estimate for the second quarter straight. The top line increased on a year-over-year basis, but the bottom line declined.

John Geller, president and CEO, Marriott Vacations, said that bookings for the upcoming summer season had significantly increased from the prior-year level, both within the country and abroad. The demand for travel to Maui is nearing the pre-wildfires levels, indicating a strong resurgence in tourism. These positive trends are likely to boost its 2024 contract sales by an estimated range of 6-9%.

Earnings & Revenue Discussion

Adjusted earnings per share (EPS) of $1.80 surpassed the Zacks Consensus Estimate of $1.66 by 8.4%. In the year-ago quarter, it reported adjusted EPS of $2.54.

Quarterly revenues of $1,195 million topped the consensus mark of $1,184 million by 0.9%. The top line increased 2% on a year-over-year basis.

Segmental Performances

Vacation Ownership: The segment’s revenues totaled $1.13 billion, up 2.9% from $1.1 billion reported in the prior-year quarter.

VAC’s Vacation Ownership contract sales fell 1% year over year to $428 million. Excluding Maui, contract sales rose 3% year over year.

Adjusted EBITDA came in at $213 million, down 7% from $229 million reported in the year-ago quarter.

Exchange & Third-Party Management: Segmental revenues of $65 million increased 8.5% year over year. Revenues, excluding cost reimbursements, declined 6% year over year.

The interval of international active members remained in line with the year-ago figure of 1.6 million. Average revenues per member declined 1% on a year-over-year basis. Adjusted EBITDA was $32 million, down 14% year over year.

Corporate and Other Results

General and administrative costs totaled $63 million, down 8% year over year. Our estimate was $73.5 million.

Expenses & EBITDA

Total expenses increased 4.2% year over year to $1.1 billion from $1.02 billion reported in the year-ago quarter. We expected the metric to be $1.04 billion.

Adjusted EBITDA amounted to $187 million compared with $203 million reported in the prior-year quarter. Our model precited the metric to be $173.2 million.

Balance Sheet

As of Mar 31, the company’s cash and cash equivalents were $237 million compared with $248 million as of Dec 31, 2023.

At the end of the first quarter, the company had $3.1 billion of corporate debt and $2.2 billion of non-recourse debt related to its securitized notes receivable.

2024 Outlook

Management continues to anticipate contract sales in the range of $1,880-$1,930 million compared with $1,772 million in 2023. Adjusted free cash flow is projected to be in the range of $400-$450 million. Adjusted EBITDA is expected to be between $760 million and $800 million compared with $761 million in the prior year. Adjusted EPS is suggested to be between $7.45 and $8.16, down from the prior projection of $7.65-$8.35.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -5.55% due to these changes.

VGM Scores

Currently, Marriott Vacations Worldwide has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Marriott Vacations Worldwide has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Marriott Vacations Worldwide is part of the Zacks Leisure and Recreation Services industry. Over the past month, Royal Caribbean (RCL Quick QuoteRCL - Free Report) , a stock from the same industry, has gained 9.6%. The company reported its results for the quarter ended March 2024 more than a month ago.

Royal Caribbean reported revenues of $3.73 billion in the last reported quarter, representing a year-over-year change of +29.2%. EPS of $1.77 for the same period compares with -$0.23 a year ago.

For the current quarter, Royal Caribbean is expected to post earnings of $2.75 per share, indicating a change of +51.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Royal Caribbean. Also, the stock has a VGM Score of C.