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Extended Stay (STAY) Misses on Q2 Earnings & Sales Estimates
August 01, 2017

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Extended Stay America, Inc. (STAY - Free Report) operates hotels in the United States and Canada. The company operates under the Extended Stay America brand, Extended Stay Canada brand and the Crossland Economy Studios brand.

The transformational initiatives undertaken by Extended Stay have been boosting revenue per available room (RevPAR) at its properties. These initiatives include better service, improving margins through operational efficiency, increasing brand awareness through targeted marketing efforts and upgrading properties to optimize returns. However, renovation of the company’s properties has hurt occupancy rate due to displacement.   

Investors should note that the consensus estimate for STAY has not witnessed any significant movement over the last 60 days. Meanwhile, STAY’s earnings have been strong over the past few quarters. In fact, the company posted positive earnings surprises in all of the last four quarters, with an average beat of 21.11%. Revenues have also outpaced the Zacks Consensus Estimate in three of the trailing four quarters.

Extended Stay America, Inc. Price and EPS Surprise

STAY currently has a Zacks Rank #3 (Hold) but that could change following Extended Stay’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: STAY lagged earnings. Our consensus earnings estimate called for earnings per share of 32 cents, and the company reported earnings of 31 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: STAY reported revenues of $338.4 million. This missed our consensus estimate of $343.5 million.

Key Stats to Note: Revenue per available room (RevPAR) increased 2.4% year over year in second-quarter 2017, driven by an improvement in occupancy of 220 basis points (bps) while average daily rate (ADR) declined 0.5%. Meanwhile, hotel operating margin increased 90 basis points (bps) to 56.7%.

Stock Price Impact: At the time of writing, the stock price of Extended Stay was down nearly 4% during pre-market trading hours following the earnings release.

Check back later for our full write up on this STAY earnings report!

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