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Factors Setting the Tone for Marriott's (MAR) Q2 Earnings
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Marriott International, Inc. (MAR - Free Report) is scheduled to release second-quarter 2024 results on Jul 31, before the opening bell.
In the last quarter, the company’s earnings missed the Zacks Consensus Estimate by 1.8% while the revenues marginally surpassed the same by 0.1%.
Marriott’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 17.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) has decreased to $2.49 from $2.51 in the past 60 days. That said, the expected figure indicates growth of 10.2% from earnings of $2.26 per share reported in the year-ago quarter.
Marriott International, Inc. Price and EPS Surprise
For revenues, the consensus mark is pegged at $6.44 billion, indicating growth of 6% from the prior-year quarter’s reported figure of $6.08 billion.
Key Factors to Consider
Revenues
Marriott’s second-quarter revenues are likely to increase year over year thanks to the solid growth trend in revenue per available room (RevPAR), which was driven by robust global leisure and business travel demand. The demand uptrend was primarily witnessed in its International regions along with the U.S. & Canada, reflecting higher occupancy rates and average daily rate year over year. Furthermore, the company’s unit growth trend, higher co-branded credit card fees, accretive travel and loyalty program, and the launch of MGM Collection with Marriott Bonvoy are likely to have aided the uptick to a great extent.
Owing to the aforementioned tailwinds, Marriott anticipates gross fee revenues to be in the $1.34-$1.355 billion range, up from the year-ago quarter’s reported value of $1.25 billion. Our model predicts gross fee revenues to be $1.35 billion, up 7.7% year over year.
Although demand softness in China is concerning, strong demand and booking trends across other major international markets, including the rest of the Asia Pacific, Middle East & Africa, accompanied by the Caribbean and Mexico, are likely to have favored the company’s performance.
Geographically, the company expects year-over-year worldwide RevPAR to be within 4-5%, with the international RevPAR being comparatively higher than the U.S. & Canada RevPAR.
We expect RevPAR in worldwide, international and U.S. & Canada markets to grow 4.1% to $137.6, 6.2% to $126.6 and 3.4% to $142.7, respectively, year over year. We also expect Asia Pacific RevPAR to grow 5.9% to $117.8 compared with the prior year.
Our model also predicts the total number of rooms to increase 6% to 1,658,742 units on a year-over-year basis.
Margins
Although persisting inflationary pressures and economic uncertainties are primary concerns, Marriott is still likely to witness margin and earnings growth on a year-over-year basis. The improvement in global trends, increase in international travel demand and RevPAR growth, along with its efficient operating model, are likely to have helped the company position itself in the tough economic conditions.
For the second quarter, Marriott expects general, administrative and other expenses in the range of $258-$253 million, up from $240 million reported in the prior-year quarter. Adjusted EBITDA is expected between $1.295 billion and $1.315 billion, up from $1.219 billion in the year-ago quarter. Also, the company expects adjusted EPS to be in range of $2.43-$2.48.
Our model expects the company’s general, administrative and other expenses to increase 5.7% to $253.7 million year over year. Also, adjusted EBITDA is expected to rise 6.9% to $1.303 billion year over year.
Furthermore, we also expect adjusted EBITDA margin and adjusted operating margin to increase 90 basis points (bps) to 21% and 70 bps to 17.9%, respectively, year over year.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for Marriott this time around. The company possesses the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The Earnings ESP for MAR is +6.24%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Here are some other stocks from the Zacks Consumer Discretionary space, which according to our model, have the right combination of elements to deliver an earnings beat this time around.
Hyatt Hotels Corporation (H - Free Report) currently has an Earnings ESP of +48.96% and a Zacks Rank of 3.
H’s earnings topped the Zacks Consensus Estimate in two of the last four quarters and missed on the remaining two occasions, the average surprise being 20.3%. Earnings for the second quarter of 2024 are expected to increase 57.3% year over year.
Hilton Grand Vacations (HGV - Free Report) currently has an Earnings ESP of +16.12% and a Zacks Rank of 1.
HGV’s earnings for the second quarter are expected to increase 4.7%. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 7.2%.
MGM Resorts International (MGM - Free Report) currently has an Earnings ESP of +15.35% and a Zacks Rank of 3.
MGM’s earnings for the second quarter are expected to increase 11.9%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 27.3%.
Image: Shutterstock
Factors Setting the Tone for Marriott's (MAR) Q2 Earnings
Marriott International, Inc. (MAR - Free Report) is scheduled to release second-quarter 2024 results on Jul 31, before the opening bell.
In the last quarter, the company’s earnings missed the Zacks Consensus Estimate by 1.8% while the revenues marginally surpassed the same by 0.1%.
Marriott’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 17.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) has decreased to $2.49 from $2.51 in the past 60 days. That said, the expected figure indicates growth of 10.2% from earnings of $2.26 per share reported in the year-ago quarter.
Marriott International, Inc. Price and EPS Surprise
Marriott International, Inc. price-eps-surprise | Marriott International, Inc. Quote
For revenues, the consensus mark is pegged at $6.44 billion, indicating growth of 6% from the prior-year quarter’s reported figure of $6.08 billion.
Key Factors to Consider
Revenues
Marriott’s second-quarter revenues are likely to increase year over year thanks to the solid growth trend in revenue per available room (RevPAR), which was driven by robust global leisure and business travel demand. The demand uptrend was primarily witnessed in its International regions along with the U.S. & Canada, reflecting higher occupancy rates and average daily rate year over year. Furthermore, the company’s unit growth trend, higher co-branded credit card fees, accretive travel and loyalty program, and the launch of MGM Collection with Marriott Bonvoy are likely to have aided the uptick to a great extent.
Owing to the aforementioned tailwinds, Marriott anticipates gross fee revenues to be in the $1.34-$1.355 billion range, up from the year-ago quarter’s reported value of $1.25 billion. Our model predicts gross fee revenues to be $1.35 billion, up 7.7% year over year.
Although demand softness in China is concerning, strong demand and booking trends across other major international markets, including the rest of the Asia Pacific, Middle East & Africa, accompanied by the Caribbean and Mexico, are likely to have favored the company’s performance.
Geographically, the company expects year-over-year worldwide RevPAR to be within 4-5%, with the international RevPAR being comparatively higher than the U.S. & Canada RevPAR.
We expect RevPAR in worldwide, international and U.S. & Canada markets to grow 4.1% to $137.6, 6.2% to $126.6 and 3.4% to $142.7, respectively, year over year. We also expect Asia Pacific RevPAR to grow 5.9% to $117.8 compared with the prior year.
Our model also predicts the total number of rooms to increase 6% to 1,658,742 units on a year-over-year basis.
Margins
Although persisting inflationary pressures and economic uncertainties are primary concerns, Marriott is still likely to witness margin and earnings growth on a year-over-year basis. The improvement in global trends, increase in international travel demand and RevPAR growth, along with its efficient operating model, are likely to have helped the company position itself in the tough economic conditions.
For the second quarter, Marriott expects general, administrative and other expenses in the range of $258-$253 million, up from $240 million reported in the prior-year quarter. Adjusted EBITDA is expected between $1.295 billion and $1.315 billion, up from $1.219 billion in the year-ago quarter. Also, the company expects adjusted EPS to be in range of $2.43-$2.48.
Our model expects the company’s general, administrative and other expenses to increase 5.7% to $253.7 million year over year. Also, adjusted EBITDA is expected to rise 6.9% to $1.303 billion year over year.
Furthermore, we also expect adjusted EBITDA margin and adjusted operating margin to increase 90 basis points (bps) to 21% and 70 bps to 17.9%, respectively, year over year.
What Our Model Indicates
Our proven model conclusively predicts an earnings beat for Marriott this time around. The company possesses the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: The Earnings ESP for MAR is +6.24%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With the Favorable Combination
Here are some other stocks from the Zacks Consumer Discretionary space, which according to our model, have the right combination of elements to deliver an earnings beat this time around.
Hyatt Hotels Corporation (H - Free Report) currently has an Earnings ESP of +48.96% and a Zacks Rank of 3.
H’s earnings topped the Zacks Consensus Estimate in two of the last four quarters and missed on the remaining two occasions, the average surprise being 20.3%. Earnings for the second quarter of 2024 are expected to increase 57.3% year over year.
Hilton Grand Vacations (HGV - Free Report) currently has an Earnings ESP of +16.12% and a Zacks Rank of 1.
HGV’s earnings for the second quarter are expected to increase 4.7%. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 7.2%.
MGM Resorts International (MGM - Free Report) currently has an Earnings ESP of +15.35% and a Zacks Rank of 3.
MGM’s earnings for the second quarter are expected to increase 11.9%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 27.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.