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Marriott International, Inc. (MAR - Free Report) reported impressive third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. This was primarily driven by robust leisure demand and solid global booking trends. Also, substantial revenue per available room (RevPAR) growth in international markets added to the upside.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $2.11, beating the Zacks Consensus Estimate of $2.10. It reported adjusted earnings of $1.69 per share in the prior-year quarter.
Quarterly revenues of $5,928 million outpaced the consensus mark of $5,896 million. The top line improved 12% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $306 million and $748 million, up 11% and 10% year over year, respectively. RevPAR increases and unit growth primarily backed this uptick. We estimate the metrics to be $315.6 million and $743.3 million, respectively.
Incentive management fees during the quarter reached $143 million, reflecting a rise of 35% from $106 million in the prior-year quarter.
Marriott International, Inc. Price, Consensus and EPS Surprise
RevPAR for worldwide comparable system-wide properties jumped 8.8% (in constant dollars) year over year. This was primarily backed by a 4.1% increase in ADR. Occupancy improved by 3.2% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 36.4% (in constant dollars) year over year. Occupancy increased 8.6% year over year, while ADR rose 19.7% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 47.4% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 21.8% year over year. Occupancy and ADR gained 7.6% and 8.5% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.8%. RevPAR in the Caribbean & Latin America inched up 2.8% from 2022 levels.
Total expenses during the quarter increased 11% year over year to $4,829 million, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $4,610 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1,142 million, up 12% from the prior-year quarter. We predicted the metric to be $1,123.6 million.
Balance sheet
At the third-quarter end, Marriott's total debt reached $11.8 billion compared with $11.3 billion in the previous quarter. Cash and cash equivalents, as of Sep 30, 2023, came in at $0.7 billion compared with $0.6 billion in the previous quarter.
Year to date (through Oct 31, 2023), the company repurchased 18.3 million shares of its common stock worth $3.3 billion.
Unit Developments
At the end of third-quarter 2023, Marriott's development pipeline totaled 3,200 hotels, with approximately 557,000 rooms. More than 238,000 rooms were under construction. During the quarter, it added 97 properties (17,192 rooms) to its worldwide lodging portfolio.
Outlook
For fourth-quarter 2023, management anticipates gross fee revenues in the range of $1,185-$1,215 million. Adjusted EBITDA is expected to be between $1,115 million and $1,150 million. MAR estimates fourth-quarter EPS to be between $2.04 and $2.13.
For the fourth quarter, the company projects worldwide system-wide RevPAR to increase 6-7.5% year over year. RevPAR in the United States and Canada is expected to rise 3-4% year over year. International RevPAR is suggested in the range of 14-16% year over year. It anticipates worldwide system-wide RevPAR in 2023 to increase 14-15% year over year compared with the previous expectation of 12-14% year-over-year growth.
For 2023, MAR forecasts gross fee revenues in the range of $4,765-$4,795 million compared with the previous projection of $4,730-$4,820 million. General and administrative expenses are projected to be approximately $935 million.
Adjusted EBITDA is expected to be between $4,574 and $4,609 million compared with the previous expectation of $4,535 million and $4,650 million. It envisions 2023 EPS in the range of $8.50-$8.59, up from the prior estimate of $7.97-$8.42.
Zacks Rank
Marriott currently carries a Zacks Rank #3 (Hold).
Key Picks
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 3.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates 21.6% and 59.4% growth, respectively, from a year ago.
AMC Entertainment Holdings, Inc. (AMC - Free Report) flaunts a Zacks Rank #1. AMC has a trailing four-quarter earnings surprise of 44.2% on average. The stock has fallen 32.9% in the past year.
The Zacks Consensus Estimate for AMC’s 2024 sales and EPS implies improvements of 19.5% and 72.8%, respectively, from the prior-year levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 10.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS suggests advancements of 44.5% and 117.9%, respectively, from the year-earlier levels.
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Marriott's (MAR) Q3 Earnings & Revenues Surpass Estimates
Marriott International, Inc. (MAR - Free Report) reported impressive third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. This was primarily driven by robust leisure demand and solid global booking trends. Also, substantial revenue per available room (RevPAR) growth in international markets added to the upside.
Earnings & Revenue Discussion
In the quarter under review, Marriott’s adjusted earnings per share (EPS) were $2.11, beating the Zacks Consensus Estimate of $2.10. It reported adjusted earnings of $1.69 per share in the prior-year quarter.
Quarterly revenues of $5,928 million outpaced the consensus mark of $5,896 million. The top line improved 12% on a year-over-year basis.
Revenues from Base management and Franchise fees came in at $306 million and $748 million, up 11% and 10% year over year, respectively. RevPAR increases and unit growth primarily backed this uptick. We estimate the metrics to be $315.6 million and $743.3 million, respectively.
Incentive management fees during the quarter reached $143 million, reflecting a rise of 35% from $106 million 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
RevPAR & Margins
RevPAR for worldwide comparable system-wide properties jumped 8.8% (in constant dollars) year over year. This was primarily backed by a 4.1% increase in ADR. Occupancy improved by 3.2% from 2022 levels.
Comparable system-wide RevPAR in the Asia Pacific (excluding China) climbed 36.4% (in constant dollars) year over year. Occupancy increased 8.6% year over year, while ADR rose 19.7% from 2022 levels. Comparable system-wide RevPAR in Greater China grew 47.4% year over year.
On a constant-dollar basis, international comparable system-wide RevPAR increased 21.8% year over year. Occupancy and ADR gained 7.6% and 8.5% year over year, respectively. Comparable system-wide RevPAR in Europe gained 9.8%. RevPAR in the Caribbean & Latin America inched up 2.8% from 2022 levels.
Total expenses during the quarter increased 11% year over year to $4,829 million, primarily owing to a rise in reimbursed expenses. Our estimate was pegged at $4,610 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1,142 million, up 12% from the prior-year quarter. We predicted the metric to be $1,123.6 million.
Balance sheet
At the third-quarter end, Marriott's total debt reached $11.8 billion compared with $11.3 billion in the previous quarter. Cash and cash equivalents, as of Sep 30, 2023, came in at $0.7 billion compared with $0.6 billion in the previous quarter.
Year to date (through Oct 31, 2023), the company repurchased 18.3 million shares of its common stock worth $3.3 billion.
Unit Developments
At the end of third-quarter 2023, Marriott's development pipeline totaled 3,200 hotels, with approximately 557,000 rooms. More than 238,000 rooms were under construction. During the quarter, it added 97 properties (17,192 rooms) to its worldwide lodging portfolio.
Outlook
For fourth-quarter 2023, management anticipates gross fee revenues in the range of $1,185-$1,215 million. Adjusted EBITDA is expected to be between $1,115 million and $1,150 million. MAR estimates fourth-quarter EPS to be between $2.04 and $2.13.
For the fourth quarter, the company projects worldwide system-wide RevPAR to increase 6-7.5% year over year. RevPAR in the United States and Canada is expected to rise 3-4% year over year. International RevPAR is suggested in the range of 14-16% year over year. It anticipates worldwide system-wide RevPAR in 2023 to increase 14-15% year over year compared with the previous expectation of 12-14% year-over-year growth.
For 2023, MAR forecasts gross fee revenues in the range of $4,765-$4,795 million compared with the previous projection of $4,730-$4,820 million. General and administrative expenses are projected to be approximately $935 million.
Adjusted EBITDA is expected to be between $4,574 and $4,609 million compared with the previous expectation of $4,535 million and $4,650 million. It envisions 2023 EPS in the range of $8.50-$8.59, up from the prior estimate of $7.97-$8.42.
Zacks Rank
Marriott currently carries a Zacks Rank #3 (Hold).
Key Picks
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 3.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates 21.6% and 59.4% growth, respectively, from a year ago.
AMC Entertainment Holdings, Inc. (AMC - Free Report) flaunts a Zacks Rank #1. AMC has a trailing four-quarter earnings surprise of 44.2% on average. The stock has fallen 32.9% in the past year.
The Zacks Consensus Estimate for AMC’s 2024 sales and EPS implies improvements of 19.5% and 72.8%, respectively, from the prior-year levels.
OneSpaWorld Holdings Limited (OSW - Free Report) sports a Zacks Rank #1. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 10.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS suggests advancements of 44.5% and 117.9%, respectively, from the year-earlier levels.