Marriott Vacations Worldwide Corporation VAC reported excellent third-quarter 2024 results, with both adjusted earnings and revenues beating the Zacks Consensus Estimate and increasing year over year.
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The quarterly performance benefited from solid contributions from the Vacation Ownership segment, driven by increased tours, higher development, resort management and rental profit, partially offset by lower financing profit. Also, continued recovery from last year's Maui wildfires added to growth.
Although total expenses were higher in the quarter than the prior-year level, leverage from the increased top line aided the bottom line to a great extent.
Going forward, the company aims to focus on accelerating growth and strengthening profitability. It targets to achieve annual cost efficiencies between $50 million and $100 million in the next couple of years.
VAC’s Earnings & Revenue Discussion
Adjusted earnings per share (EPS) of $1.80 surpassed the Zacks Consensus Estimate of $1.53 by 17.7%. In the year-ago quarter, it reported an adjusted EPS of $1.20.
Marriott Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriott Vacations Worldwide Corporation price-consensus-eps-surprise-chart | Marriott Vacations Worldwide Corporation Quote
Quarterly revenues of $1.305 billion also surpassed the consensus mark of $1.268 billion by 2.9%. The top line increased 10% on a year-over-year basis.
Segmental Performances of Marriott Vacations
Vacation Ownership: The segment’s revenues totaled $1.25 billion, up from $1.126 billion reported in the prior-year quarter.
VAC’s Vacation Ownership total contract sales rose 5% year over year to $459 million.
The segment’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $231 million, up 33% from $173 million in the year-ago quarter. Adjusted EBITDA margin expanded 430 basis points (bps) year over year to 30.1%.
Exchange & Third-Party Management: Segmental revenues of $56 million declined year over year from $64 million. Revenues, excluding cost reimbursements, declined 10% year over year to $55 million.
Total active interval international members were down 2% year over year to 1.55 million. Average revenue per member declined 1% on a year-over-year basis to $38.93.
Adjusted EBITDA was $23 million, down 22% year over year. The segment’s adjusted EBITDA margin contracted 670 bps year over year to 43.1%.
VAC’s Corporate & Other Results
General and administrative expenses totaled $62 million, up year over year from $57 million. Our estimate was $71.7 million.
Total expenses increased 7% year over year to $1.157 billion from $1.081 billion reported in the year-ago quarter. We expected the metric to be $1.114 billion.
Adjusted EBITDA amounted to $198 million, up 32% year over year from $150 million. Our model predicted the metric to be $170.5 million.
Balance Sheet of VAC
As of Sept. 30, Marriott Vacations’ cash and cash equivalents were $197 million compared with $248 million as of Dec. 31, 2023.
At the end of the third quarter, the company had $3 billion of corporate debt and $2.2 billion of non-recourse debt related to its securitized notes receivable.
Revised 2024 Outlook of Marriott Vacations
Management continues to anticipate contract sales to be in the range of $1.790-$1.825 billion compared with $1.772 billion in 2023.
Adjusted EBITDA is now expected to be between $700 million and $720 million, up from the prior expected range of $685-$715 million. This compares with $761 million reported in 2023.
Adjusted EPS is anticipated to be between $6.05 and $6.40 compared with the prior projection of $5.90-$6.45. This compares with adjusted EPS of $7.83 in 2023.
Adjusted free cash flow is still projected to be in the range of $300-$340 million.
VAC’s Zacks Rank & Recent Consumer Discretionary Releases
Marriott Vacations currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hyatt Hotels Corporation H delivered third-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported a 3% increase in comparable system-wide hotel RevPAR compared with the same period in 2023. However, comparable system-wide all-inclusive resorts’ Net Package RevPAR declined 0.9% year over year. As of Sept. 30, 2024, Hyatt had a pipeline of executed management or franchise contracts for approximately 690 hotels (or about 135,000 rooms).
Norwegian Cruise Line Holdings Ltd. NCLH reported solid third-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
The management attributed the performance to the strength of NCLH's business model, the appeal of its product offerings across brands and the effective execution by both shoreside and shipboard teams. Driven by high demand and a focus on cost control and margin enhancement, the company has raised its full-year guidance for a fourth time, anticipating 2024 to set new records for revenues, Net Yield growth and adjusted EBITDA.
MGM Resorts International MGM reported third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the prior-year's quarter figure.
During the quarter, the company reported sequential improvements in Las Vegas, driven by growth in Average Daily Rate and occupancy levels. It emphasized advancements in digital investments and an impressive pipeline of integrated resort developments in Japan, New York and other markets to drive growth in the upcoming periods.
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