Great Wolf Raises Outlook - Analyst Blog

Madison, Wisconsin-based Great Wolf Resorts Inc. ( WOLF ) recently raised its revenue per available room (RevPAR) and adjusted EBITDA outlook for the upcoming fourth quarter of 2011 as it believes that the quarter is progressing impressively and above expectation.

For the upcoming quarter, the company expects adjusted EBITDA to exceed the higher end of its previous guidance range of $10.5-$12.5 million and same-store RevPAR growth to be 8.5%, up from the earlier projection range of 6-8%.

For fiscal 2011, the company anticipates to report adjusted EBITDA in excess of $80 million as compared with its prior forecast of $78 million to $80 million. Great Wolf also raised the mid point of its EBITDA guidance in the third quarter by $1.5 million based on solid operating performance. Great Wolf projects same-store RevPAR growth in 2011 to be 9%, which is the mid point of its previous guidance range of 8-10%.

Great Wolf, the world's largest chain of indoor water parks, has also announced its outlook for 2012. The company is experiencing strong performance and expects to close the current year on a high. For 2012, the company projects adjusted EBITDA in the range of $83 million to $89 million, led by same-store RevPAR growth of 3% to 7%.

This was quite encouraging; and as a result, the company's share price rose 40 cents to close at $2.70 on Friday.

In the recently concluded third quarter 2011, Great Wolf reported earnings of 5 cents per share, which beat the Zacks Consensus earnings of breakeven. Total revenue jumped 7.2% to $83.6 million, benefiting from increased demand. Same-store RevPAR for the quarter rose 9.1% and adjusted EBITDA soared 167 basis points to 34.6%. Operating income spiked 30.3% to $13.2 million, attributable to cost-containment efforts.

The Zacks Consensus Estimates for the fourth quarter of 2011 and fiscal 2011 are pegged at a loss of 49 cents and 86 cents, respectively. We expect estimates to go up in the coming days as the company raised its outlook and booking remains strong.

Great Wolf,which competes with Wyndham Worldwide Corporation ( WYN ) and Choice Hotels International Inc. ( CHH ), expects to report fourth quarter 2011 results on February 20, 2012.

Great Wolf currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.

CHOICE HTL INTL ( CHH ): Free Stock Analysis Report

GREAT WOLF RSRT ( WOLF ): Free Stock Analysis Report

WYNDHAM WORLDWD ( WYN ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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