Marriott Vacations Worldwide Corporation (VAC Quick QuoteVAC - Free Report) reported dismal second-quarter 2024 results, with earnings and revenues missing their respective Zacks Consensus Estimate. The top and the bottom line declined on a year-over-year basis.

VAC witnessed a mixed performance in the quarter. Rentals exceeded expectations, but lower VPGs negatively impacted contract sales. Travel demand remains strong, with resorts achieving 90% occupancy, a 5% increase in tours and flat owner VPGs compared with last year’s tally.

However, first-time buyer VPGs declined year over year. Recovery in Maui is slower than anticipated. Owing to this, the company lowered its contract sales guidance for 2024.

Earnings & Revenue Discussion

Adjusted earnings per share (EPS) of $1.10 missed the Zacks Consensus Estimate of $1.99 by 44.7%. In the year-ago quarter, it reported an adjusted EPS of $2.19.

Quarterly revenues of $1,140 million missed the consensus mark of $1,217 million by 6.3%. The top line declined 3% on a year-over-year basis.

Segmental Performances

Vacation Ownership: The segment’s revenues totaled $1.08 billion, down 3.1% from $1.1 billion reported in the prior-year quarter.

VAC’s Vacation Ownership contract sales inched down 1% year over year to $449 million. The downside was primarily caused by a 6% decline in VPG and the impact of the Maui wildfires. Excluding Maui, contract sales rose 3% year over year.

Adjusted EBITDA came in at $180 million, down 26% from $245 million reported in the year-ago quarter.

Exchange & Third-Party Management: Segmental revenues of $58 million decreased 10.8% year over year. Revenues, excluding cost reimbursements, declined 9% year over year.

The interval of international active members dropped 2% year over year to 1.5 million. Average revenues per member declined 3% on a year-over-year basis. Adjusted EBITDA was $25 million, down 22% year over year.

Corporate and Other Results

General and administrative costs totaled $54 million, down 15% year over year. Our estimate was $74.5 million.

Expenses & EBITDA

Total expenses increased 3.5% year over year to $1.04 billion from $1 billion reported in the year-ago quarter. We expected the metric to be $1.06 billion.

Adjusted EBITDA amounted to $157 million, down 29% from $222 million reported in the prior-year quarter. Our model predicted the metric to be $204.3 million.

Balance Sheet

As of Jun 30, the company’s cash and cash equivalents were $206 million compared with $248 million as of Dec 31, 2023.

At the end of the second quarter, the company had $3.1 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable.

Updated 2024 Outlook

For 2024, management anticipates contract sales in the range of $1,790-$1,825 million, down from the previous expectation of $1,880-$1,930 million. Adjusted free cash flow is projected in the range of $300-$340 million, down from the prior projection of $400-$450 million. Adjusted EBITDA is estimated to be between $685 million and $715 million, down from the previous anticipation of $760 million and $800 million.

Adjusted EPS are expected to be between $5.90 and $6.45, down from the prior estimate of $7.45 and $8.16.

Zacks Rank

Marriott Vacations currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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Mattel, Inc. (MAT) reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line missed the consensus estimate for the third straight quarter.

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Marriott International, Inc. (MAR Quick QuoteMAR - Free Report) reported mixed second-quarter 2024 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The bottom and top lines increased on a year-over-year basis.

The quarterly results benefited from a solid increase in global travel demand, reflecting worldwide revenue per available room (RevPAR) growth. International RevPAR gained from solid contributions from Asia Pacific, excluding China. At the same time, U.S. & Canada RevPAR benefited from growth across all customer segments, reflecting average daily rate (ADR) and occupancy uptrend.