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Marriott's Q3 Earnings & Revenues Miss Estimates, '24 View Cut
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Marriott International, Inc. (MAR - Free Report) reported third-quarter 2024 results, with adjusted earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
For the quarter, the company reported a solid increase in global travel demand, driving growth in international markets and steady performance in the United States and Canada. The company reported a rise in group bookings. Business transient demand increased and leisure transient revenue per available room (RevPAR) remained above pre-pandemic levels. Marriott’s portfolio expansion also gained traction, adding over 95,000 rooms this year through conversions and international deals. To support its expanding global footprint, MAR introduced an efficiency initiative to generate up to $90 million in annual cost savings by 2025.
Following the results, the stock fell 3% in the pre-market trading session on Nov. 4. Investors’ sentiments are likely to have been hurt by the reduced 2024 adjusted earnings per share (EPS) outlook.
MAR’s Q3 Earnings & Revenue Discussion
Marriott’s adjusted EPS of $2.26 missed the Zacks Consensus Estimate of $2.31. It reported adjusted earnings of $2.11 per share in the prior-year quarter.
Marriott International, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $6.26 billion missed the consensus mark of $6.28 billion. The top line moved up 5.5% on a year-over-year basis.
Revenues from Base management and Franchise fees were $312 million and $812 million, up 2% and 9% year over year, respectively. Increased RevPAR, residential and co-branded credit card fees and unit growth backed this uptick. We estimated the metrics to be $319.5 million and $815.4 million, respectively.
Incentive management fees were $159 million, reflecting a rise of 11.2% from $143 million reported in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties rose 3% (in constant dollars) year over year. The upside was backed by a 2.5% increase in average daily rate (“ADR”) and a 0.3% increase in occupancy, year over year.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 9.2% (in constant dollars) year over year. Occupancy moved up 3.1% year over year, while ADR rose 4.6% from the 2023 level. Comparable system-wide RevPAR in Greater China declined 7.9% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 5.4% year over year. Occupancy and ADR gained 1.5% and 3.2% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America and Middle East & Africa rose 6.7% and 8%, respectively, from 2023 levels.
Total expenses increased 10% year over year to $5.31 billion, owing to a rise in reimbursed expenses. Our estimate was pegged at $5.1 billion.
Adjusted EBITDA amounted to $1.23 billion, compared with $1.14 billion reported in the prior-year quarter. We predicted the metric to be $1.25 billion.
Balance Sheet
At the third-quarter end, Marriott's total debt totaled $13.6 billion, compared with $13.1 reported in the prior quarter. Cash and cash equivalents, as of Sept. 30, 2024, were $0.4 billion compared with $0.3 billion as of 2023-end.
Year to date (through Oct. 31, 2024), the company repurchased 14.2 million shares worth $3.4 billion.
Unit Developments
At the end of the third quarter, Marriott's worldwide development pipeline totaled 3,802 hotels, with more than 585,000 rooms. As of the quarter's end, about 1,320 properties with more than 220,000 rooms were under construction.
Marriott’s Q4 & 2024 Outlook
For the fourth quarter, management anticipates gross fee revenues in the range of $1.29-$1.31 billion. Adjusted EBITDA is expected between $1.24 billion and $1.27 billion. MAR estimates fourth-quarter EPS to be between $2.31 and $2.39.
The company projects worldwide system-wide RevPAR to increase 3-4% year over year in 2024.
For 2024, Marriott reduced its gross fee revenue expectations to $5.13-$5.15 billion compared with the prior expected range of $5.13-$5.18 billion. General and administrative expenses are now projected in the range of $1.05-$1.06 billion (earlier expected between $1.02 billion and $1.03 billion).
Adjusted EBITDA is now expected between $4.93 billion and $4.96 billion compared with the previous expectation of $4.95-$5.2 billion. The company now envisions 2024 EPS in the band of $9.19-$9.27, down from the prior expectation of $9.23-$9.40.
Royal Caribbean Cruises Ltd. (RCL - Free Report) posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
In the quarter, the company exceeded its guidance, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025.
Mattel, Inc. (MAT - Free Report) reported impressive third-quarter 2024 results, wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. The top line surpassed the consensus estimate after missing it for three consecutive quarters. On a year-over-year basis, net sales declined while adjusted earnings grew.
The company’s quarterly results benefited notably from its Optimizing for Profitable Growth program along with the focus on its multi-year strategy to expand its IP-driven toy business and entertainment offering. Although the top line was adversely impacted by reduced sales from both the reportable segments, the bottom line showed resilience through operational efficiencies.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in RevPAR, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories — including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.
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Marriott's Q3 Earnings & Revenues Miss Estimates, '24 View Cut
Marriott International, Inc. (MAR - Free Report) reported third-quarter 2024 results, with adjusted earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
For the quarter, the company reported a solid increase in global travel demand, driving growth in international markets and steady performance in the United States and Canada. The company reported a rise in group bookings. Business transient demand increased and leisure transient revenue per available room (RevPAR) remained above pre-pandemic levels. Marriott’s portfolio expansion also gained traction, adding over 95,000 rooms this year through conversions and international deals. To support its expanding global footprint, MAR introduced an efficiency initiative to generate up to $90 million in annual cost savings by 2025.
Following the results, the stock fell 3% in the pre-market trading session on Nov. 4. Investors’ sentiments are likely to have been hurt by the reduced 2024 adjusted earnings per share (EPS) outlook.
MAR’s Q3 Earnings & Revenue Discussion
Marriott’s adjusted EPS of $2.26 missed the Zacks Consensus Estimate of $2.31. It reported adjusted earnings of $2.11 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 $6.26 billion missed the consensus mark of $6.28 billion. The top line moved up 5.5% on a year-over-year basis.
Revenues from Base management and Franchise fees were $312 million and $812 million, up 2% and 9% year over year, respectively. Increased RevPAR, residential and co-branded credit card fees and unit growth backed this uptick. We estimated the metrics to be $319.5 million and $815.4 million, respectively.
Incentive management fees were $159 million, reflecting a rise of 11.2% from $143 million reported in the prior-year quarter.
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties rose 3% (in constant dollars) year over year. The upside was backed by a 2.5% increase in average daily rate (“ADR”) and a 0.3% increase in occupancy, year over year.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) increased 9.2% (in constant dollars) year over year. Occupancy moved up 3.1% year over year, while ADR rose 4.6% from the 2023 level. Comparable system-wide RevPAR in Greater China declined 7.9% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 5.4% year over year. Occupancy and ADR gained 1.5% and 3.2% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.5% year over year. RevPAR in the Caribbean & Latin America and Middle East & Africa rose 6.7% and 8%, respectively, from 2023 levels.
Total expenses increased 10% year over year to $5.31 billion, owing to a rise in reimbursed expenses. Our estimate was pegged at $5.1 billion.
Adjusted EBITDA amounted to $1.23 billion, compared with $1.14 billion reported in the prior-year quarter. We predicted the metric to be $1.25 billion.
Balance Sheet
At the third-quarter end, Marriott's total debt totaled $13.6 billion, compared with $13.1 reported in the prior quarter. Cash and cash equivalents, as of Sept. 30, 2024, were $0.4 billion compared with $0.3 billion as of 2023-end.
Year to date (through Oct. 31, 2024), the company repurchased 14.2 million shares worth $3.4 billion.
Unit Developments
At the end of the third quarter, Marriott's worldwide development pipeline totaled 3,802 hotels, with more than 585,000 rooms. As of the quarter's end, about 1,320 properties with more than 220,000 rooms were under construction.
Marriott’s Q4 & 2024 Outlook
For the fourth quarter, management anticipates gross fee revenues in the range of $1.29-$1.31 billion. Adjusted EBITDA is expected between $1.24 billion and $1.27 billion. MAR estimates fourth-quarter EPS to be between $2.31 and $2.39.
The company projects worldwide system-wide RevPAR to increase 3-4% year over year in 2024.
For 2024, Marriott reduced its gross fee revenue expectations to $5.13-$5.15 billion compared with the prior expected range of $5.13-$5.18 billion. General and administrative expenses are now projected in the range of $1.05-$1.06 billion (earlier expected between $1.02 billion and $1.03 billion).
Adjusted EBITDA is now expected between $4.93 billion and $4.96 billion compared with the previous expectation of $4.95-$5.2 billion. The company now envisions 2024 EPS in the band of $9.19-$9.27, down from the prior expectation of $9.23-$9.40.
MAR’s Zacks Rank
Marriott currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Royal Caribbean Cruises Ltd. (RCL - Free Report) posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
In the quarter, the company exceeded its guidance, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025.
Mattel, Inc. (MAT - Free Report) reported impressive third-quarter 2024 results, wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. The top line surpassed the consensus estimate after missing it for three consecutive quarters. On a year-over-year basis, net sales declined while adjusted earnings grew.
The company’s quarterly results benefited notably from its Optimizing for Profitable Growth program along with the focus on its multi-year strategy to expand its IP-driven toy business and entertainment offering. Although the top line was adversely impacted by reduced sales from both the reportable segments, the bottom line showed resilience through operational efficiencies.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in RevPAR, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories — including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.