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Choice Hotels Q4 Earnings & Revenues Beat Estimates, Stock Up
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Choice Hotels International, Inc. (CHH - Free Report) delivered impressive fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Also, both metrics increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of the company gained 3.1% during yesterday’s trading session, post the earnings release.
The company delivered strong results in 2024, surpassing the top end of its earnings guidance. The revenue-intense domestic rooms portfolio saw a 4.3% year-over-year increase, indicating the effectiveness of the company’s growth strategy. The company successfully relaunched four brands, expanded partnerships and strengthened its international presence. It also achieved record organic rewards program growth and unlocked additional revenue streams. Going forward, the company aims to drive earnings growth, expand business scale and accelerate growth in 2025.
CHH’s Q4 Earnings and Revenues
Choice Hotels reported adjusted EPS of $1.55, which beat the Zacks Consensus Estimate of $1.50 by 3.3%. It reported adjusted EPS of $1.44 in the prior-year quarter.
Quarterly revenues of $389.8 million surpassed the consensus mark of $378 million by 3.1%. The metric grew 8.8% from the year-ago level of $358.4 million.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Royalty, licensing and management fees increased 2.8% year over year to $120.1 million. During the three months ended Dec. 31, domestic RevPAR increased 450 basis points (bps) year over year.
System-wide effective royalty rate increased 6 bps year over year to 5.09%.
Operating Results of CHH
Total operating expenses declined 14.6% year over year to $270.6 million. Our estimate for the metric was $273.2 million.
Adjusted EBITDA was $140.4 million, up 12.3% year over year. We expected the metric to be $134 million.
CHH’s Balance Sheet
As of Dec. 31, 2024, Choice Hotels had cash and cash equivalents of $40.2 million compared with $26.8 million as of Dec. 31, 2023.
Long-term debt at the end of the fourth quarter was $1.77 billion compared with $1.07 billion reported in 2023-end.
2024 Highlights of CHH
Total revenues in 2024 were $1.59 billion compared with $1.54 billion in 2023.
Adjusted EBITDA in 2024 was $604.1 million compared with $504.5 million in 2023.
In 2024, adjusted diluted EPS was $6.88 compared with $6.11 reported in the previous year.
Other Updates of CHH
In 2024, the company’s domestic net rooms portfolio increased 3% year over year, with net unit growth accelerating in the fourth quarter. Domestic upscale, extended stay and midscale units expanded 1.5%, while the domestic extended stay segment grew 9.8%, reaching a pipeline of nearly 43,000 rooms. The global upscale net rooms portfolio rose 43.9%, with a pipeline of nearly 25,000 rooms. International net rooms portfolio expanded 4.4%, supported by a 58% increase in international hotel openings in the fourth quarter.
As of Dec. 31, 2024, the company’s global pipeline was more than 97,000 rooms, with around 83,000 rooms in the domestic market.
CHH’s 2025 Outlook
For 2025, the company anticipates adjusted net income in the range of $333-$345 million. Adjusted EBITDA is expected to be between $625 million and $640 million. The company anticipates adjusted diluted EPS in the range of $6.98-$7.24.
Domestic RevPAR growth in 2025 is estimated to be in the range of 1% to 2% compared with 2024 levels. For the same period, the company’s domestic effective royalty rate is anticipated to increase in the mid-single digits on a year-over-year basis. Global net system room’s growth is estimated at approximately 1% compared with 2024 levels.
CHH’s Zacks Rank
Choice Hotels currently has a Zacks Rank #4 (Sell).
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported exceptional fourth-quarter 2024 results, wherein adjusted earnings and total revenues surpassed the Zacks Consensus Estimate and grew year over year.
The company's performance was backed by strong demand for leisure travel, with continued growth in business transient and group travel. These robust trends supported growth in occupancy and average daily rate, resulting in increased revenue per available room. Furthermore, favorable net unit growth compared with last year and the continuous efforts in expanding the portfolio globally added to the uptrend. HLT expects the robust travel trends to continue into 2025, positioning it to deliver strong results in the near term.
Mattel, Inc. (MAT - Free Report) reported fourth-quarter 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both top and bottom lines increased on a year-over-year basis.
In 2024, Mattel repurchased $400 million worth of shares and improved its leverage ratio. The company remains ahead of schedule in achieving its $200 million cost-savings target by 2026. For 2025, Mattel expects continued revenue and earnings growth, increased investments in digital gaming and a $600 million share repurchase program, underscoring its commitment to long-term shareholder value creation. MAT anticipates adjusted EPS in 2025 to be between $1.66 and $1.72 compared with $1.62 reported in 2024.
Marriott International, Inc. (MAR - Free Report) reported fourth-quarter 2024 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year while the bottom line declined from the prior-year quarter.
Marriott posted strong results in 2024, driven by steady global travel demand and strategic portfolio expansion. The company’s development momentum remained strong, with the signing of a record number of new deals and its development pipeline reaching 577,000 rooms. Given its vast global footprint, a loyalty program comprising nearly 228 million Marriott Bonvoy members and an asset-light model, MAR remains well-positioned to capitalize on travel demand and drive growth in the upcoming periods.
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Choice Hotels Q4 Earnings & Revenues Beat Estimates, Stock Up
Choice Hotels International, Inc. (CHH - Free Report) delivered impressive fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Also, both metrics increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of the company gained 3.1% during yesterday’s trading session, post the earnings release.
The company delivered strong results in 2024, surpassing the top end of its earnings guidance. The revenue-intense domestic rooms portfolio saw a 4.3% year-over-year increase, indicating the effectiveness of the company’s growth strategy. The company successfully relaunched four brands, expanded partnerships and strengthened its international presence. It also achieved record organic rewards program growth and unlocked additional revenue streams. Going forward, the company aims to drive earnings growth, expand business scale and accelerate growth in 2025.
CHH’s Q4 Earnings and Revenues
Choice Hotels reported adjusted EPS of $1.55, which beat the Zacks Consensus Estimate of $1.50 by 3.3%. It reported adjusted EPS of $1.44 in the prior-year quarter.
Quarterly revenues of $389.8 million surpassed the consensus mark of $378 million by 3.1%. The metric grew 8.8% from the year-ago level of $358.4 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 of CHH
Royalty, licensing and management fees increased 2.8% year over year to $120.1 million. During the three months ended Dec. 31, domestic RevPAR increased 450 basis points (bps) year over year.
System-wide effective royalty rate increased 6 bps year over year to 5.09%.
Operating Results of CHH
Total operating expenses declined 14.6% year over year to $270.6 million. Our estimate for the metric was $273.2 million.
Adjusted EBITDA was $140.4 million, up 12.3% year over year. We expected the metric to be $134 million.
CHH’s Balance Sheet
As of Dec. 31, 2024, Choice Hotels had cash and cash equivalents of $40.2 million compared with $26.8 million as of Dec. 31, 2023.
Long-term debt at the end of the fourth quarter was $1.77 billion compared with $1.07 billion reported in 2023-end.
2024 Highlights of CHH
Total revenues in 2024 were $1.59 billion compared with $1.54 billion in 2023.
Adjusted EBITDA in 2024 was $604.1 million compared with $504.5 million in 2023.
In 2024, adjusted diluted EPS was $6.88 compared with $6.11 reported in the previous year.
Other Updates of CHH
In 2024, the company’s domestic net rooms portfolio increased 3% year over year, with net unit growth accelerating in the fourth quarter. Domestic upscale, extended stay and midscale units expanded 1.5%, while the domestic extended stay segment grew 9.8%, reaching a pipeline of nearly 43,000 rooms. The global upscale net rooms portfolio rose 43.9%, with a pipeline of nearly 25,000 rooms. International net rooms portfolio expanded 4.4%, supported by a 58% increase in international hotel openings in the fourth quarter.
As of Dec. 31, 2024, the company’s global pipeline was more than 97,000 rooms, with around 83,000 rooms in the domestic market.
CHH’s 2025 Outlook
For 2025, the company anticipates adjusted net income in the range of $333-$345 million. Adjusted EBITDA is expected to be between $625 million and $640 million. The company anticipates adjusted diluted EPS in the range of $6.98-$7.24.
Domestic RevPAR growth in 2025 is estimated to be in the range of 1% to 2% compared with 2024 levels. For the same period, the company’s domestic effective royalty rate is anticipated to increase in the mid-single digits on a year-over-year basis. Global net system room’s growth is estimated at approximately 1% compared with 2024 levels.
CHH’s Zacks Rank
Choice Hotels currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported exceptional fourth-quarter 2024 results, wherein adjusted earnings and total revenues surpassed the Zacks Consensus Estimate and grew year over year.
The company's performance was backed by strong demand for leisure travel, with continued growth in business transient and group travel. These robust trends supported growth in occupancy and average daily rate, resulting in increased revenue per available room. Furthermore, favorable net unit growth compared with last year and the continuous efforts in expanding the portfolio globally added to the uptrend. HLT expects the robust travel trends to continue into 2025, positioning it to deliver strong results in the near term.
Mattel, Inc. (MAT - Free Report) reported fourth-quarter 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both top and bottom lines increased on a year-over-year basis.
In 2024, Mattel repurchased $400 million worth of shares and improved its leverage ratio. The company remains ahead of schedule in achieving its $200 million cost-savings target by 2026. For 2025, Mattel expects continued revenue and earnings growth, increased investments in digital gaming and a $600 million share repurchase program, underscoring its commitment to long-term shareholder value creation. MAT anticipates adjusted EPS in 2025 to be between $1.66 and $1.72 compared with $1.62 reported in 2024.
Marriott International, Inc. (MAR - Free Report) reported fourth-quarter 2024 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year while the bottom line declined from the prior-year quarter.
Marriott posted strong results in 2024, driven by steady global travel demand and strategic portfolio expansion. The company’s development momentum remained strong, with the signing of a record number of new deals and its development pipeline reaching 577,000 rooms. Given its vast global footprint, a loyalty program comprising nearly 228 million Marriott Bonvoy members and an asset-light model, MAR remains well-positioned to capitalize on travel demand and drive growth in the upcoming periods.