Choice Hotels Reports Mixed Q3 Earnings

Choice Hotels International Inc CHH reported third-quarter FY22 sales growth of 28% year-on-year to $414.27 million, beating the consensus of $367.59 million.
Q3 domestic systemwide revenue per available room (RevPAR) increased 15.2% compared to Q3 FY19.
Revenue from Royalty, licensing and management fees rose 13% Y/Y, procurement services climbed 11%, owned hotels gained 76%, and franchised and managed properties increased 26%.
The total operating expenses rose 72% Y/Y to $282.6 million.
The operating margin was 35%, and operating income for the quarter fell 9% to $145.1 million.
Adjusted EPS of $1.56 missed the analyst consensus of $1.69.
The company held $52.5 million in cash and equivalents as of September 30, 2022.
The company resumed share repurchases in Q3 under its share repurchase program and returned over $230 million in shares, representing nearly 4% of shares outstanding as of September 30.
Outlook: Choice Hotels see FY22 adjusted EBITDA of $465 million - $470 million.
Excluding the impact of Radisson Hotels Americas, domestic RevPAR for FY22 is expected to increase between 13% - 15%, compared to full-year 2019.
Price Action: CHH shares closed higher by 2.20% at $128.37 on Friday.
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