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Choice Hotels Beats on Q3 Earnings, Raises 2024 Guidance
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Choice Hotels International, Inc. (CHH - Free Report) delivered mixed third-quarter 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, both metrics increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarter’s performance was backed by the effective execution of its growth strategy. The company accelerated unit growth and expanded its global pipeline. CHH also increased its international presence and significantly grew the size of the company’s rewards program.
Owing to this solid performance, Choice Hotels raised its adjusted net income, adjusted earnings per share (EPS) and revenue per available room (RevPAR) guidance for 2024.
Moreover, the company's versatile business model and accretive growth strategies ensure the support required to foster its growth trends.
Going forward, CHH believes that it is well-positioned to deliver bottom-line growth as well as maintain shareholder value on the back of the aforementioned business strategies against the improving demand backdrop.
CHH’s Q3 Earnings and Revenues
Choice Hotels reported adjusted EPS of $2.23, which beat the Zacks Consensus Estimate of $1.91 by 16.8%. It reported adjusted EPS of $1.82 in the prior-year quarter.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $428 million missed the consensus mark of $436.4 million by 1.9%. On the other hand, the metric grew 1% from the year-ago level of $425.6 million.
Franchising & Royalties of CHH
Royalty, licensing and management fees decreased 1% year over year to $147.2 million. During the three months ended Sept. 30, domestic RevPAR declined 250 basis points (bps) year over year.
System-wide effective royalty rate increased 6 bps year over year to 5.05%.
Operating Results of CHH
Total operating expenses declined 5% year over year to $276.2 million. Our estimate for the metric was $290.9 million.
Adjusted EBITDA was $177.6 million, up 14% year over year. We expected the metric to be $174.9 million.
CHH’s Balance Sheet
As of Sept. 30, 2024, Choice Hotels had cash and cash equivalents of $58.6 million compared with $26.8 million as of Dec. 31, 2023.
Long-term debt at the end of the third quarter was $1.81 billion compared with $1.07 billion reported in 2023-end.
CHH’s 2024 Outlook Updated
Choice Hotels now anticipates adjusted net income to be in the range of $323-$331 million, up from the prior estimate of $309.5-$321 million. Adjusted EBITDA is expected to be between $590 million and $600 million compared with the prior estimate of $580-$600 million.
Adjusted EPS is now expected to be in the range of $6.70-$6.87, up from the prior projection of $6.40-$6.65.
Domestic RevPAR year-over-year growth is now estimated to be in the range of -2% to -1% compared with the prior expected range of -3.5% to -1.5%. The domestic effective royalty rate is still predicted to increase in mid-single digits from the year-earlier level.
Royal Caribbean Cruises Ltd. (RCL - Free Report) posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
In the quarter, the company exceeded its guidance, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025.
Mattel, Inc. (MAT - Free Report) reported impressive third-quarter 2024 results, wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. The top line surpassed the consensus estimate after missing for three consecutive quarters. On a year-over-year basis, net sales declined while adjusted earnings grew.
The company’s quarterly results benefited notably from its Optimizing for Profitable Growth program along with the focus on MAT’s multi-year strategy to expand its IP-driven toy business and entertainment offering. Although the top line was adversely impacted by reduced sales from both the reportable segments, the bottom line showed resilience through operational efficiencies.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in RevPAR, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories, including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth to be in the range of 7-7.5%.
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Choice Hotels Beats on Q3 Earnings, Raises 2024 Guidance
Choice Hotels International, Inc. (CHH - Free Report) delivered mixed third-quarter 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, both metrics increased on a year-over-year basis.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The quarter’s performance was backed by the effective execution of its growth strategy. The company accelerated unit growth and expanded its global pipeline. CHH also increased its international presence and significantly grew the size of the company’s rewards program.
Owing to this solid performance, Choice Hotels raised its adjusted net income, adjusted earnings per share (EPS) and revenue per available room (RevPAR) guidance for 2024.
Moreover, the company's versatile business model and accretive growth strategies ensure the support required to foster its growth trends.
Going forward, CHH believes that it is well-positioned to deliver bottom-line growth as well as maintain shareholder value on the back of the aforementioned business strategies against the improving demand backdrop.
CHH’s Q3 Earnings and Revenues
Choice Hotels reported adjusted EPS of $2.23, which beat the Zacks Consensus Estimate of $1.91 by 16.8%. It reported adjusted EPS of $1.82 in the prior-year quarter.
Choice Hotels International, Inc. Price, Consensus and EPS Surprise
Choice Hotels International, Inc. price-consensus-eps-surprise-chart | Choice Hotels International, Inc. Quote
Quarterly revenues of $428 million missed the consensus mark of $436.4 million by 1.9%. On the other hand, the metric grew 1% from the year-ago level of $425.6 million.
Franchising & Royalties of CHH
Royalty, licensing and management fees decreased 1% year over year to $147.2 million. During the three months ended Sept. 30, domestic RevPAR declined 250 basis points (bps) year over year.
System-wide effective royalty rate increased 6 bps year over year to 5.05%.
Operating Results of CHH
Total operating expenses declined 5% year over year to $276.2 million. Our estimate for the metric was $290.9 million.
Adjusted EBITDA was $177.6 million, up 14% year over year. We expected the metric to be $174.9 million.
CHH’s Balance Sheet
As of Sept. 30, 2024, Choice Hotels had cash and cash equivalents of $58.6 million compared with $26.8 million as of Dec. 31, 2023.
Long-term debt at the end of the third quarter was $1.81 billion compared with $1.07 billion reported in 2023-end.
CHH’s 2024 Outlook Updated
Choice Hotels now anticipates adjusted net income to be in the range of $323-$331 million, up from the prior estimate of $309.5-$321 million. Adjusted EBITDA is expected to be between $590 million and $600 million compared with the prior estimate of $580-$600 million.
Adjusted EPS is now expected to be in the range of $6.70-$6.87, up from the prior projection of $6.40-$6.65.
Domestic RevPAR year-over-year growth is now estimated to be in the range of -2% to -1% compared with the prior expected range of -3.5% to -1.5%. The domestic effective royalty rate is still predicted to increase in mid-single digits from the year-earlier level.
CHH’s Zacks Rank
Choice Hotels currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Royal Caribbean Cruises Ltd. (RCL - Free Report) posted impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
In the quarter, the company exceeded its guidance, driven by stronger pricing on close-in demand, continued growth in onboard revenues and reduced costs due to timing factors. The company has raised its outlook for 2024 and reported elevated demand patterns heading into 2025.
Mattel, Inc. (MAT - Free Report) reported impressive third-quarter 2024 results, wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. The top line surpassed the consensus estimate after missing for three consecutive quarters. On a year-over-year basis, net sales declined while adjusted earnings grew.
The company’s quarterly results benefited notably from its Optimizing for Profitable Growth program along with the focus on MAT’s multi-year strategy to expand its IP-driven toy business and entertainment offering. Although the top line was adversely impacted by reduced sales from both the reportable segments, the bottom line showed resilience through operational efficiencies.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in RevPAR, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories, including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth to be in the range of 7-7.5%.